Real estate companies, which are raising money from institutional investors, are being told to use the funds to repay loans first, instead of taking up new projects, people familiar with the development said.

The warning comes, as real estate firms saddled with thousands of crores of rupees in debt struggle to generate cash from the sale of properties, while they raise money from the qualified institutional placement of securities.One of those who got this message last week is a real estate company, which is in talks with a foreign institutional investor for QIP funding.

Times of India