Within about a year and a few months since it was tasked with funding stressed projects across the country, SBICAP Ventures, the manager for the government's Rs 25,000 crore stressed-asset fund, has so far completed 1,100 stuck houses in five projects across the country and is hopeful that if there are no further COVID-related delays, 10,000 homes will be completed by the end of the financial year.
“We have already completed 1100 homes in five projects across the country. We are hopeful that with no COVID-19 related delays we will be able to complete 10,000 homes by the end of this financial year. With the current approvals in place we are in a position to have a run rate of 10,000 homes completed every year for the next three to four years,” Irfan A Kazi, Chief Investment Officer at SBICAP Ventures Ltd, said in a CII-Anarock webinar on September 3.
The session was being moderated by Anarock Chairman Anuj Puri.
The Fund has so far accorded final approval to as many as 87 real estate projects that will see the completion of 53,000 homes.
“We have given clearance to 87 projects which will see the completion of 83,000 homes. We have a prelim clearance for 142 projects which will see the completion of another 78,000 homes. On the basis of final approvals, we are scheduled to complete 53,000 homes,” he said.
Asked if the entire Rs 25,000 crore has been spent, he said that the amount may take another six to seven years to exhaust.
“Our spending rate is linked to the pace of construction. It is not a question of Rs 25,000 crore. The government has made it clear that money is no constraint,” he added.
“We are a social impact fund. We are not looking at 20% returns but 12% returns. The projects that we invest in may not be able to get funding even at double that rate. That is how SWAMIH is different but what is it that we have done differently. This is the first fund that is focused on construction only,” he said.
He said that the Fund has so far given final approval to projects in 36 cities across the country. That includes the eight-tier 1 cities and 28 tier 2 cities.
“We have a two-stage approval process – we first give a prelim approval and we get a prelim approval from our investment committee. We then do an intensive external due diligence for which we appoint four to five external agencies to do due diligence with regard to different aspects of a project – forensic, title, and then we give final approval,” he added.
Finance Minister Nirmala Sitharaman on May 13 handed over possession to 640 homebuyers of the first stalled project completed with funding by SWAMIH Fund managed by SBICap Ventures Ltd and said that the Fund will benefit 1.16 lakh buyers whose projects had been stalled due to last-mile funding issues.
Mumbai-based Rivali Park Wintergreens is the first investment by the Fund and is also the first project to be completed. It is a large project spread over 7 acres consisting of 708 units of various configurations. The project is Rivali Park Wintergreen is developed by CCI Projects Pvt Ltd (CCIPPL), an associate company of Cable Corporation of India Ltd.
In November 2019, the Central government announced a Rs 25,000 crore SWAMIH Investment Fund to help complete over 1,500 stalled housing projects, including those that have been declared non-performing assets (NPAs) or had been admitted for insolvency proceedings. The move was to help 4.58 lakh housing units across the country. Only RERA-registered projects with a positive net worth are to be provided funding.