Around 400 applications have already been filed for funds to be granted under alternative investment fund and the first round of disbursements may take place as early as this month itself. Read on to know more..
Over 400 stalled real estate projects across the country have applied for funds to be granted under the Rs 25,000-crore alternative investment fund (AIF) set up by the central government last month, according to a report.
To recall, finance minister Nirmala Sitharaman on November 6, 2019 had announced that the Cabinet had cleared a proposal to set up an AIF to provide priority debt financing for the completion of stalled housing projects that were in the affordable and middle-income housing sector.
A Moneycontrol report said that around 400 applications have already been filed and the first round of disbursements may take place as early as this month itself.
“In the first round, applications of top realty brand names from across the country, wherein the fund requirement is over Rs 100 crore, are likely to be cleared. The first round of approvals may be granted by December 31 itself,” the report said quoting sources.
SBICAP Ventures Ltd, the investment manager of the AIF, had just recently announced that the fund has raised Rs 10,530 crore in its first round, attracting interest from investors like State Bank of India (SBI), Life Insurance Corporation of India (LIC), Housing Development Finance Corp. Ltd (HDFC) and major public sector banks.
At the end of the first round of fund-raising, SBICAP Ventures chairman Sanjiv Chadha had said, “We have substantially completed the fundraising, have scaled up the team, formed the investment committee and have begun examining potential investment opportunities.”
Projects were required to meet a few parameters to be eligible for funding — their net worth should be positive; they should come under the affordable housing or mid-income housing category; at least 30% of the construction and development should be completed; they should be registered with the Real Estate Regulatory Authority (RERA), or they should require just last-mile funding that was sufficient to complete construction.
Finance ministry had also clarified that the maximum funding for any single project seeking assistance from AIF would be Rs 400 crore.
It added that the AIF can be utilised even by the projects that have been declared non-performing assets (NPAs) or are facing insolvency proceedings.