Exclusive | At least 13 Delhi-NCR projects accorded final approval under SWAMIH Fund

“Many of these projects are from Gurugram, Noida, Bhiwadi and Rewari areas. Also, even though the number of stuck projects from NCR are larger in number, they are typically smaller in value terms because the most of these are in the range of Rs 3,000 per sq ft to Rs 5,000 per sq ft,” Kazi explained.

A large part of these units belongs to the embattled Amrapali group whose projects are spread across Noida and Greater Noida.

The SWAMIH Fund, unlike private equity funding, considers the project at hand and not the promoter. “When it comes to disbursement of funds, unlike how other lenders approach it, our disbursement is linked to the physical progress of the project,” he said.

There are also two levels of clearance for funding for a stuck project. These include preliminary and final approval.

“The former is based on the principal information shared by the developer and our own information based on organized data sources. Basis this, we approach our investment committee and get preliminary approval. This is followed up with external due diligence that includes financial, corporate, legal and forensic valuation,” he told Moneycontrol.

The Fund ensures that there is “tight control on where our money goes,” he said.

The Fund also deputes an external project management company to oversee work at all the sites. “They give us an accurate daily report on material movement, construction activity and basis their reports we disburse funds,” he said.

Several projects had RERA and NCLT cases pending against them

A majority of cases that received funding under the stressed asset fund had RERA and NCLT cases pending against them.

“This is natural as most of these stressed projects are either delayed, or construction has progressed slowly due to lack of funding. In almost all cases there are numerous RERA and consumer court complaints pending,” Kazi said.

It has also been seen that this is not a major issue if the number of homebuyers who have moved RERA is small in number but in case it is a large number, there is always the fear of the project becoming unviable.

“If it is a small number of cases, we can provide for cashflows to take care of those cases but if the number is large, the project may become unviable as the cost to complete the projects and liabilities under RERA may be huge. The project inflows may not be sufficient and it may even turn networth-negative. In such exceptional circumstances, we speak with the homebuyers to delay their actions so that the project can be completed,” he added.

It should be noted that funding from the stressed asset fund can only be used for the construction and completion of a project and not to address issues of interest and other RERA penalties.

Overall, 123 projects have been now sanctioned, including final approval to 33 projects, with an investment of Rs 12,079 crore that aims to provide relief to 81,308 homeowners.

These projects are spread across a mix of markets. This includes 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.

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. SBICAP Ventures Ltd is the fund manager of SWAMIH Fund.

The fund was to help complete over 1,500 stalled housing projects, including 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 a positive net worth will be provided with funds.