Finance Minister Nirmala Sitharaman virtually handed over possession to 640 people after their stuck residential project was completed following funding by a government-backed alternate investment fund (AIF).
The project, Rivali Park, located in suburban Mumbai, was the first housing project to have received funding under the Special Window for Affordable and Mid Income Housing (SWAMIH) and the first to have been completed. As many as 708 flats have been built under this project; 640 took possession on Thursday.
The SWAMIH fund, set up in November 2019 to extend last-mile funding to stuck realty projects, has so far sanctioned as much as Rs 18,000 crore to help complete 204 projects.
The government’s move through the SWAMIH fund will provide employment to construction workers and offer fresh impetus to the allied industries such as steel and cement. Further, it will improve the portfolios of banks and shadow lenders and significantly improve the economic sentiment.
What is remarkable is that the first project has been completed in only 18 months of SWAMIH’s existence, despite
the onslaught of the Covid-19 pandemic, Sitharaman stressed.
The fund so far has given its final approval to 72 projects, which will help complete 44,100 houses. Another 132 projects have received preliminary approval, which will pave the way for the completion of an additional 72,500 houses.
Thus, the SWAMIH fund is targeting to complete a total of 1,16,600 homes, according to an official statement.
SBICAP Ventures, an arm of SBI Capital Markets, is entrusted by the government to manage this AIF.
Speaking on the occasion, housing secretary Durga Shanker Mishra said the 204 deals where funds have been sanctioned will ultimately unlock projects of over Rs 54,000 crore.
State Bank of India (SBI) chairman Dinesh Kumar Khara said his bank has encouraged the fund to operate independently by fostering an objective decision-making process. What makes SWAMIH different from other PE funds is its ability to deal with proposals from Rs 10 crore to Rs 400 crore and making investments across all large and small cities. In addition to six metros, the fund has approved proposals from 35 smaller locations which are spread across the country, he added.
The finance ministry had earlier said the projects were spread across a broad mix of markets, including metros and also Tier- 2 locations like Karnal, Panipat, Lucknow, Surat, Dehradun, Kota, Nagpur, Jaipur, Nashik, Vizag and Chandigarh.
The fund was announced on November 6, 2019 and raised Rs 10,530 crore from 14 investors, including LIC, HDFC and SBI, when it declared its first close in December. The plan was to have a Rs 25,000 crore fund, with contribution of both the government and other investors.
The government had pledged a total of Rs 10,000 crore for this purpose, as it wanted to kick-start the investment cycle in residential projects and deliver houses to people who have been humbled by the double whammy of undelivered homes and regular repayment of home loans. It was also supposed to boost private consumption once houses are delivered.
According to an industry estimate in late 2019, as many as 4.58 lakh housing units were facing delayed delivery across 1,509 stalled projects.