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.
"SWAMIH Fund I, under which 640 people are getting homes today, will benefit 1.16 lakh Indian families. All of them will get houses which got stuck because of so many different reasons and hinderances,” she said at the virtual ceremony.
"All this is happening in the pandemic. What more happiness can be given to families which have been waiting for years to get their homes during this time of lockdown," she said.
Rivali Park Wintergreens is the first investment by the Fund and is also the first project to get 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.
Along with Sitharaman, the online event was attended by Anurag Singh Thakur, Minister of State for Finance and Corporate Affairs; Durga Shankar Mishra, Secretary, Ministry of Housing and Urban Affairs; Ajay Seth, Secretary, Department of Economic Affairs, Ministry of Finance; K. Rajaraman, Additional Secretary, Department of Economic Affairs, Ministry of Finance and officials from SBICAP Ventures Limited.
The Finance Minister said that the government had stepped in to provide funding to the stressed affordable and mid-income housing projects providing relief to the homebuyers who had invested their hard earned savings. She said the government believes that once these homes are constructed and completed, a large amount of capital locked up in these projects will be released.
She said it will provide employment to construction workers and will provide impetus to the allied industries such as steel and cement. Further, it will improve portfolios of Banks and NBFCs and significantly improve the economic sentiment in the nation.
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.
Sitharaman recalled that 2019 was a very testing time for the real estate sector as the industry was cash-strapped and banks, because of the very inherent stress, would not lend money to them. Several projects that were near completion or two-thirds completed were stalled because of last mile funding issues, she said.
As many as 72 projects with 44,115 dwelling units have got funding of Rs 6,995 crore under SWAMIH Fund I and 132 preliminary approvals have been given for 132 projects with 72,457 units with an investment of Rs 11,581 crore.
The total cost of these stalled projects stands at Rs 54,520 crore.
Speaking at the virtual event, Ministry of Housing and Urban Affairs Secretary Durga Shankar Mishra said real estate sector plays an important role in the country's economy. The real estate industry is the second-largest employment generation sector in India providing jobs to 5 crore people.
Mumbai-based CCI Projects Pvt Ltd's maiden residential project Rivali Park is among the first projects in the country to have received funding for stuck projects under the government-sponsored Rs 25,000 crore SWAMIH Fund.
The project was sanctioned Rs 180 crores by the fund as the last mile funding for completion of the project that comprises six buildings spread across 7 acres. Two towers in the initial phase have already been handed over to buyers. The total land parcel is spread across 14 acres.
“An amount of Rs 180 crore was a conservative estimate that we arrived at together as we did not want an aggressive business plan on collection and sales. We were not too sure about cash flows and therefore a conservative estimate of Rs 180 crore was drawn up and Rs 117 crore have been sanctioned to us,” Rohan Khatau, director, CCI Projects Pvt Ltd, had told Moneycontrol.
Once the project is delivered, the company is also expecting to recover significant dues from homebuyers and from the sale of the unsold units, he had said.