In what could come as a huge relief to homebuyers, the government has approved funding of over Rs 8,700 crore for 81 stressed housing projects, with as many as 27 in Mumbai and 26 in Delhi-NCR, under the Rs 25,000 crore stressed-asset fund set up in 2019.
Amongst these projects, investments in 18 projects have been given final clearance and disbursement is at various stages across seven residential projects, the finance ministry said in a statement issued after a review by finance minister Nirmala Sitharaman.
The SWAMIH Fund has approved 81 projects that will enable the completion of almost 60,000 homes across India. These projects are spread across a mix of markets including large cities such as NCR, MMR, Bengaluru, Chennai, Pune and also Tier 2 locations including Karnal, Panipat, Lucknow, Surat, Dehradun, Kota, Nagpur, Jaipur, Nashik, Vizag, Chandigarh, it said.
These include 26 projects in NCR, 27 projects in Mumbai, 10 projects in Bengaluru, seven projects in Pune and three projects in Chennai. The remaining are spread across Tier 2 locations.
Applications from 353 stressed projects are under examination for provision of assistance. It was also highlighted that activation of these construction sites by the Special Window would provide employment opportunities for various skilled and semi-skilled labourers. Additionally, the Fund is actively evaluating options to provide relief to over 15,000 homebuyers in certain long-stalled projects which are pending before the Supreme Court for resolution.
These 18 projects include Mantri Serenity by Mantri Developers in Bengaluru, Rivali Park by CCI Projects Ltd in Borivali, Mumbai, Primera by Ramprastha Group in Gurgaon, Naman Premier by Naman Group in Andheri MMR, Asha Bahadurgarh by Essel located in Bahadurgarh NCR, Lake Grove by TDI located in Kundli Sonipat NCR, Upper Thane by Lodha in MMR, Kimaya Greens by Sikka in Thane MMR, Amangani Peaceful Homes by Urban Land in Rewari NCR, Elite Acres by Plaza in Chennai, Highland Park by Ansal Housing in Gurgaon.
Others include Gem Paradise by Vayuputra in Mumbai, WF8 by Ozone in Bengaluru, Vedantam Minaret by Magnus in Indirapuram NCR, Taruchaya Residency by Vilasa in Jaipur, Windpace Amelio by Moongipa in MMR, Ranjangaon by Playtor in Pune and Leaf by SS Group in Gurgaon.
While reviewing the performance of the Special Window for Affordable and Mid Income Housing (SWAMIH), the minister underlined the need for speedy efforts to complete construction of projects for which last mile funding has been sanctioned, The ministry statement said.
Besides senior officials of the Finance Ministry, the review meeting was attended by the officials of the State Bank of India, SBI Capital Markets Limited and SBICAPS Ventures Limited (SVL).
"This special window was an unprecedented initiative that has provided extraordinary support to the real estate sector and poised it at the cusp of a turnaround despite such turbulent economic times," the minister said.
She suggested that both private and public sector banks, non-banking financial companies (NBFCs) and housing finance companies (HFCs) should see the special window as a stakeholder and increase support for early completion of stressed projects.
Sitharaman also asked the Department of Economic Affairs to closely monitor the performance of SWAMIH to ensure that the capital raised is used for resolving stressed projects on urgent basis.
The alternative investment fund (AIF), was set up in November last year to provide last-mile funding for stalled real estate projects by the government. The fund was to help complete over 1,500 stalled housing projects, including even those that have been declared NPAs (non-performing assets) or admitted for insolvency proceedings. The move is likely to help 4.58 lakh housing units across the country. Only RERA-registered projects with positive net worth will be provided funds. The fund had cleared Rs 540 crore for two housing projects in Mumbai and Bengaluru earlier in 2020.
The recent initiative by the Fund to reduce the cost of capital to 12 percent has resulted in an increase in the number of projects that meet the funding criteria laid out under the Special Window, the statement said.
Both builders and homebuyers welcomed the move
"All tho old projects that were stuck due to the market situation or the NBFC crisis pre-COVID will get a breather. The fund will enable those projects to be completed. Banks will get back their money and flat owners will get their homes. It is a welcome move and it was long awaited," said Satish Magar, national president, Confederation of Real Estate Developers' Associations of India (Credai), told Moneycontrol.
"This is just the cleaning up of the past. We have to see how it succeeds over a period of time. Demand boosters are still the need of the hour to enthuse homebuyers to buy. Post Covid we still need to do a lot more, one-time restructuring is the need of the hour, tax incentives for buyers may be required to ensure that the wheels of the economy start moving," he added.
Homebuyers have welcomed the move. “It’s good that slowly more stalled real estate projects are being identified for being eligible to get funds from special windows,” said Abhay Upadhyay, national president Forum for People's Collective Efforts.
However, concerns remain since funds are being disbursed to original promoters who have lost all credibility, he said.
"It's high time that the government involves homebuyers and forms a monitoring committee to ensure that funds are not misused and are realised back from promoters once inflow of funds from homebuyers begins. This will ensure that the same funds may then be used for other stick projects," he added.
Vedantam Minaret, promoted by Magus Consortium Orchid Avenue Private Limited, is the only project from Uttar Pradesh to get approval from the SWAMIH fund.
Manoj Sharma, director, Magus Consortium Orchid Avenue said, “We are thankful to the honourable Finance Minister Nirmala Sitaraman ji to lend us a helping hand. However, for investment to start, we need to get a layout validity extension from GDA, for which we have applied in February 2020 before the expiry of the existing approval letter. Based on this extension of validity, we shall get an extension from UP RERA as well, after which the investment shall start, and the project shall be completed.
"Once the investment is received, the developer will be able to deliver flats to more than 100 families by March 2021. The construction work is in the finishing stages and currently furnishing work is pending, which shall be completed with assistance from SWAMIH Fund.
"SBI CAP, the fund manager of SWAMIH Fund, has informed us that they shall be clearing all the dues of the GDA on our behalf. The Group Housing land has been allotted to the developer by GDA under auction scheme and the project is registered under UP RERA,” Sharma said.
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