They also have debt. Please take a look at management and balance sheet.

I would personally would not run business or partner with not so honest people(being polite here) as I will always have trust issues.

Few pointers to ponder

1. Please check type of inventory they have
2. Have they encroached the government land(think ansal api)?
3. If you buy house on debt, technically, is it your house till you pay the debt?

All the best.

Otherwise whats the option?

If we invest in actual indices , Nifty 50, Nifty next 50 , Midcap 150, Smallcap 250…Out of these 500 stocks, roughly 90% stocks are not worth investing, either they are loss making, or cyclical businesses, degrowing businesses, High Leverage , debt ridden businesses, Govt owned and PSU businesses, some newly listed , useless crap businesses…And such businesses are around 450 out of 500. Why one should invest their hard earned money into such crappy businesses, just because , index provides them.comfort of not selecting their stocks, and no mental pain of watching their stocks going down daily.

As far as , 40-50 numbers are concerened , once some.basic parameters are in place, you may not have to monitor minutely. Just a cursory glance will be fine.
I have seen portfolio of many active funds and PMS, flexicap, multicap and they have another kind of compulsion, lots of money is entering in market and fund managers are running short of ideas…they have to deploy money in these 450 companies too, knowing fully well that they are entering into shitty companies, but its not their money, they are just thinking of their fees and very short term view.
As for weightages, maybbe those stocks from Nifty 50 and nifty next 50, which qualifies above criteria , can be upto 60% while remaining can be upto 40%.
Only issue is , you need to keep watch, over time many companies from these 40 will slide into 450 and vice versa.

Please research more about omaxe management.
Please check their project completion rates and their issues with local government.
Also check their issues with property holders of omaxe.

Dis: Not invested

Tracking 40 names may not be worth the effort. To some extent, it again feels like an index fund. And should these stocks have equal weightage or weight depends on the index? Should better performing stocks be given more weightage or even if underperforming but undervalued stocks should be added more? And if one stock does not fit the criteria, should it be changed with a better performing stock, and what duration of underperformance should be considered here? And one may feel to allocate more to some stocks and have only small portions in other stocks because he knows more about some sectors etc.

Also if one is investing in direct stocks, I don’t think a comparison with indices is necessary, in the sense that, if I am underperforming w.r.t Nifty 500, should I stop and invest in Nifty 500?

There are many ways to do these things, but if we are going broad with the idea and the work, then we may have to spend considerable time doing it to come to a conclusion of continuing it or stopping it.