The fund is now sanctioning funding proposals at 12% internal rate of return (IRR) as against earlier return expectations of 15%.

MUMBAI: The government-sponsored and the SBICAP Ventures managed last-mile fund for stressed real estate projects has cleared investments worth over Rs 10,000 crore for 101 proposals approved that will benefit around 71,000 homebuyers across various cities.

The fund, Special Window for Completion of Construction of Affordable and Mid-Income Housing Projects (SWAMIH I), has cleared these applications from realty developers for their stressed projects in the last 7 months including the lockdown period.

“There is a tremendous flow of deals coming to us and we have managed to achieve this milestone despite the lockdown… We have been significantly constrained or handicapped, the due diligence for real estate cannot be done just online or digitally, we have to visit the site in person,” said Irfan A. Kazi, Chief Investment Officer, SWAMIH Investment Fund I.

The fund is now sanctioning funding proposals at 12% internal rate of return (IRR) as against earlier return expectations of 15%. A total of 22 projects with over 20,000 affected homebuyers have already started receiving funds, he said at an online conference.

Last month, Finance Minister Nirmala Sitharamaan had announced the SWAMIH Investment Fund I has so far approved Rs 8,767 crore for 81 stressed residential projects.

These projects are spread across a mix of markets including National Capital Region (NCR), Mumbai Metropolitan Region (MMR), Bengaluru, Chennai, Pune and also tier-II locations including Nagpur, Jaipur, Nashik, Vizag, Chandigarh, Karnal, Panipat, Lucknow, Surat, Dehradun, and Kota among others.

The ongoing Covid19 crisis may result in more projects getting stalled due to liquidity crunch. However, clarity on this will emerge only after November as the Reserve Bank of India has announced a 6-month moratorium on all term and working capital loans. Apart from this, Real Estate Regulatory Authorities (RERA) across several states have extended the deadlines for project completions.

According to government estimates, there are 4.58 lakh stalled housing units in 1,509 residential projects stuck across the country. The Rs 12,500-crore fund, with green-shoe option of additional Rs 12,500 crore, aims to provide financing to enable completion of stalled housing projects and ensure delivery of apartments to troubled homebuyers.

deployed completely, SWAMIH will exercise the green-shoe option for additional funds and that call is likely to be taken soon.

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