Around 10 government and private banks have shown interest in funding the incomplete housing projects of the Amrapali Group in Noida and Greater Noida, bringing relief to thousands of homebuyers, government’s construction arm NBCC said on August 10.
The move comes after the Special Window for Affordable and Mid-Income Housing SWAMIH Investment Fund I (SWAMIH Fund), backed by the government and managed by an arm of SBI Capital Markets said that it will invest Rs 650 crore in six projects of the Amrapali Group.
“After the signing of the Memorandum of Understanding between the Court Receiver and SBICAP Ventures Ltd for funding six Amrapali projects in Noida and Greater Noida on August 4, other reputed banks have shown interest in funding the stalled Amrapali Projects. More than 42,000 homebuyers waiting possession or their dream homes will be benefited by this progressive initiative,”said NBCC CMD PK Gupta.
“As many as 10 private and government banks have shown interest. We are looking at raising another Rs 1500 crore which will be sufficient,” he told Moneycontrol.
Some of these banks include Punjab National Bank, Bank of Baroda, HDFC, Axis, Canara, UCO, Bank of Baroda and Union Bank of India, NBCC sources said.
These banks are expected to put together a proposal and submit it to the court receiver who will put it before the Supreme Court on the next date of hearing, they said.
On August 4, SBICAP Ventures, the manager for the government's Rs 25,000-crore stressed-asset fund, signed a MoU with the court receiver appointed by the Supreme Court to monitor stuck Amrapali projects for funding Rs 650 crore for six projects in Noida and Greater Noida.
According to the MoU, 6,947 homes will be completed with the funding. SBI Cap is funding Rs 650 crore for six projects to bridge the temporary liquidity gap.
The funding is Silicon City-1, Silicon City-2, Crystal Homes, Centurian Park- Low Rise, O2 Valley and Tropical Garden. The execution works on these projects was hampered due to the slow inflow of funds and disruptions caused by the COVID-19 pandemic.
On August 9, the monitoring committee appointed by the Supreme Court accompanied by NBCC executive director convened a meeting pursuant to SC’s orders on August 2 with nationalised and private banks to discuss the financing for Amrapali Projects.
The company is facing execution hurdles due to a slow inflow of cash which is expected to get sorted soon, they said.
The Supreme Court on August 2 asked banks to relax the funding criteria for stalled Amrapali projects that include submission of collateral security and corporate guarantees, saying that lending to the projects be treated as a special case since it was being monitored by the apex court.
Earlier, the Supreme Court-appointed court receiver R Venkataramani, tasked with monitoring the construction of Amrapali projects, told the court that banks and prospective lenders had raised an issue with regard to ASPIRE that was registered but does not have a credit rating as a company or past history of performance.
NBCC had also apprised the court receiver of the constraints faced by it for raising funds. These included issues such as ASPIRE SPV not having any history and credit rating as it is a newly formed entity.
It had also told the court receiver during a meeting held on July 29 that the majority of banks had raised the issue of non-availability of collateral security in the form of mortgage of other assets/ sovereign and corporate guarantee or a letter of comfort.
Banks have been asking NBCC for a letter of comfort for financing the project.
The court had in 2019 asked the government’s construction arm to finish and deliver 38,159 flats by 2023 after several homebuyers sought its intervention, complaining about years of delay in handing over their homes.
The total cost of completing all stuck projects by Amrapali Group is approximately Rs 8,500 crore. NBCC is executing these projects as PMC and would get 8 percent as fees. It is not using its funds, which are being facilitated by a receiver appointed by the Supreme Court.