13 Investors Commit To Invest In State-Backed Rescue Fund For Home Projects, Says CEA
India’s Chief Economic Adviser Krishnamurthy Subramanian. (Photographer: T Narayan/Bloomberg)

13 Investors Commit To Invest In State-Backed Rescue Fund For Home Projects, Says CEA

As many as 13 domestic financial institutions have shown interest in a government-backed fund set up to finance stalled housing projects, according Chief Economic Adviser Krishnamurthy Subramanian.

The alternate investment fund, called Special Window for Completion of Construction of Affordable and Mid-Income Housing Projects or SWAMIH, will have a size of Rs 25,000 crore, with the government contributing around Rs 10,000 crore. The fund is fully operational, and the investment committee is completing due diligence on the first set of deals today, Subramanian told reporters in Delhi.

About Rs 10,530 crore worth commitments for investments in the fund have been received from HDFC Ltd., State Bank of India, Life Insurance Corporation of India and 10 other investors, Subramanian said.

SBI has committed about Rs 1,000 crore and LIC will contribute a similar amount, an official managing the fund told BloombergQuint on the condition of anonymity.

The Finance Ministry, in September, had announced the creation of this fund that aims to finance 4.58 lakh stalled housing units.

Housing projects need to be net worth positive and should be at least 30 percent complete, according to the SWAMIH’s guidelines. The projects should be registered with RERA.

Last month, the government had tweaked some guidelines of the schemes to include stressed projects that are classified as a non-performing asset and those admitted to National Company Law Tribunal, which were earlier excluded.

Affordable or mid-income houses under the scheme have been defined as those units that don’t exceed 200 square metre of RERA carpet area, and should be priced less than Rs 2 crore in the Mumbai Metropolitan Region, less than Rs 1.5 crore in National Capital Region, Chennai, Kolkata, Pune, Hyderabad, Bengaluru and Ahmedabad, and below Rs 1 crore in the rest of the country.

The first disbursal from the fund will be done as early as March, the official cited earlier said.

The funding will be on priority basis, which means that at the time of recovery, the AIF will get preference over other lenders, he said. The government had, on Nov. 28, sought Parliament approval to spend Rs 1,000 crore for creating this fund.

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