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India Real Estate Rescue Fund Has Disbursed Money To Two Stressed Projects: SBICAP Ventures

“With the completion of these projects, 1,800 homebuyers are going to benefit,” SBICAP Ventures’ Irfan Kazi says.

Labourers work on an Indiabulls Real Estate  commercial building construction site in the Lower Parel area of Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)
Labourers work on an Indiabulls Real Estate commercial building construction site in the Lower Parel area of Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

The government-led alternative investment fund, with a starting corpus of Rs 10,000 crore, has started disbursing money to two stressed real estate projects, according to the firm managing the corpus.

“These two projects are located in Mumbai and Bengaluru,” said Irfan Kazi, chief investment officer at SBICAP Ventures Ltd., the government-appointed manager for the India AIF. “With the completion of these projects, 1,800 homebuyers are going to benefit,” he said, without revealing names.

“There has been a deluge of deals. Eighteen deals have gone through the investment committee process,” he said at a conference organised by the Confederation of Indian Industry. “We expect to reach a stage sometime soon where we will be funding a deal every other week.”

According to government estimates, projects with about 4.58 lakh housing units and requiring Rs 55,000 crore were stalled. In November, the cabinet decided to set up a ‘special fund’ in the form of an AIF to provide priority debt financing for completing stalled housing projects. Housing Development Finance Corp. Ltd. and State Bank of India have agreed to contribute to the fund.

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SBI Chairman Rajnish Kumar, on the sidelines of World Economic Forum at Davos, had told BloombergQuint that he expects eight to 10 deals in the real estate sector to be done by March by the real estate rescue fund promoted by government.

According to Kazi, the AIF is looking at providing relief to the homebuyers but that should also make investment sense. “It is not a charity; it’s an investment proposition for our investors which by generating an investment return provides a relief to harassed homebuyers.”

The funding is capped at Rs 400 crore for a single project and Rs 800 crore for a developer. “We can do multiple deals with a developer as long as it meets the norms,” Kazi said.

Also Read: Real Estate Financing Pivots Away From NBFCs To Alternative Investment Funds