Covid-19 no bar for govt realty stress fund

The SBICAP Ventures managed last-mile fund for stressed real estate projects has cleared investments of over Rs 1,000 crore for six additional projects during the last two month’s lockdown period taking its total commitment to over Rs 1,500 crore, said two persons with direct knowledge of the development.

The Rs 10,530 crore government-backed fund, Special Window for Completion of Construction of Affordable and Mid-Income Housing Projects (SWAMIH I), has already committed Rs 540 crore for two projects–one each in Mumbai and Bengaluru.

The new set of stuck projects that have been finalised for investment are located in cities and towns such as Bengaluru, Chennai, National Capital Region, Bahadurgarh, Sonipat and Rewari.

“Apart from stalled projects in tier l locations, many applications are flowing in from tier II cities and towns that are being considered for financial support. The investments will be linked to construction progress and that will catch momentum once the lockdown is over,” said one of the persons mentioned above.

The documentation process, including getting a no-objection certificate from existing lenders of these projects, and some additional collaterals for the investment will be completed as the lockdown is lifted.

The total Rs 1,500-crore investment across 8 projects will fund completion of 7,000 stuck houses and unlock nearly Rs 6,000 crore in capital.

ET’s email query to SBICAP Ventures remained unanswered until the time of going to press.

According to government estimates, there are 4.58 lakh stalled housing units in 1,509 residential projects stuck across the country.

It is estimated that Rs 55,000 crore would be required to complete these projects that would then unlock Rs 3.3 lakh crore of inventory.

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The Rs 12,500-crore fund, with green-shoe option of additional Rs 12,500 crore, had already achieved its first closure of Rs 10,530 crore in December within a month of the government approving the scheme in November.

The fund aims to provide financing to enable completion of stalled housing projects and ensure delivery of apartments to troubled homebuyers.

“Funds are not a constraint, as more money will be made available based on applications of projects that can be revived and completed with financial support. However, the project needs to be networth positive and all approvals should be valid,” said another person.

Apart from the government that has already committed Rs 10,000 crore investments in this special window, the fund has so far attracted investments from Life Insurance Corporation of India, State Bank India, HDFC and all major public sector banks.



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