The whiff of default reached the markets around 2.30 pm on Thursday.

Shares of Unitech, India’s second-largest real-estate developer, which opened around Rs 70 and were hovering around Rs 66 at that time, plunged more than 9%.

Late evening came the confirmation: Unitech had defaulted on payment of Rs 150 crore to the Greater Noida Development Authority towards purchase of land, according to sources familiar with the development.

A Unitech spokesperson told DNA Money the possession of the land has not been handed over totally, implying the company was not paying because of that.

“Also, this is the place where construction was stopped due to agitation by farmers. All developers have given letters to the authority demanding rectification as payments are due only on giving peaceful possession and allowing of construction,” the spokesperson said.

Gaurav Pathak and Shaleen Silori, analysts with ICICI Securities, in a report on September 15, said Unitech was among the most leveraged property companies in India. As on March 31, 2008, the company’s debt-equity ratio stood at 2.2x, (debt at 2.2 times equity) with total debt of Rs 8,550 crore, Pathak and Silori said.

The Greater Noida airport plan may well be shelved on Tuesday, when the Group of Ministers led by finance minister P Chidambaram meets to take a final call on the issue.

According to highly placed sources, the ministry of civil aviation is expected to support scrapping any plan to build an airport at Greater Noida and cite the opinion of the Attorney General (AG).

Earlier, the GoM had referred this politically sensitive proposal to the AG to determine whether an airport at Noida violates the concession agreement between the government and GMR Group, the developer of the Delhi International Airport (DIAL). In his report subsequently, the AG clearly stated that till capacity at the existing DIAL is exhausted, no new airport should be allowed to come up.

DIAL is just about 70 km from the proposed airport site at Zevar and as per existing rules, any airport proposal within 150 km of an existing one needs to be examined for implications on existing infrastructure.

Even the current political scenario indicates that the chances of the Greater Noida airport proposal getting a nod are slim. Uttar Pradesh chief minister Mayawati, the main supporter of this project, is at loggerheads with the UPA government at the Centre and it is widely believed that the GoM would agree with civil aviation minister Praful Patel’s plan of scrapping the project all together.