Indian developer rupee bond sales have slumped to the lowest in almost four years as investors become more cautious about default risks after the shock from non-payments by Infrastructure & Leasing Financial Services Ltd. With just two deals in October, issuance dropped to 3.9 billion rupees ($54 million), the least since November 2014. That was down from 18.9 billion rupees the previous month, according to Bloomberg data. No new bonds have priced this month. Dwindling sales may make it harder for developers to repay $4.9 billion of debt that comes due in 2019. It also adds to challenges for the Indian real-estate sector, already struggling to recover following market destabilization after the 2016 demonetization and real-estate act, as well as the roll-out of a national sales tax. The problems have been exacerbated by a recent liquidity squeeze among non-bank financiers, triggered by defaults at shadow bank IL&FS, which was seized by the government last month. \u201cIf realty projects need funding or refinancing, there is no-one to go to,\u201d said Nachiket Naik, managing director of IREP Credit Capital, a non-bank lender. The drop in issuance will mean a hit for wealthy Indians who piled into real-estate bonds seeking higher returns than bank deposits, said Amit Goenka, managing director of Nisus Finance Services. Coupons on real-estate bonds outstanding are 10.4 percent on average, Bloomberg data show. That compares with State Bank of India\u2019s two-year deposit rate of 6.95 percent. The issuance slump is even more pronounced when it takes into account privately placed deals, which make up a sizable amount of sales, Goenka said. Poor Sentiment The property sector needs to make it through to the end of the year without any news such as additional defaults that might prolong poor sentiment, IREP Credit\u2019s Naik said. Then, \u201cyou should see some stability returning,\u201d he said. Indian real estate has been sluggish for two years. Between January and June, even though launches of new units grew 45 percent year-on-year, sales moved up only by 3 percent, according to a Knight Frank report. With IL&FS, among the largest non-bank financiers, out in the cold, and corporates steering clear of mutual funds that have exposure to the non-bank lenders, developers are finding it harder to raise money.