The announcement of Alternative Investment Fund (AIF) for Indian real estate sector by Finance Minister Nirmala Sitharaman on Nov. 6, Wednesday, is being welcomed by the leaders of the realty segment. The bail out fund of Rs. 25, 000 crore will provide last-mile funding to some 4.6 lakh stalled housing units across the country.
Dr. Niranjan Hiranandani, MD, Hiranandani Group and National President – NAREDCO, said, “This will be a win-win for home buyers and real estate developers, as it will help alleviate financial stress faced by homebuyers who have invested their hard-earned money, while also releasing funds stuck in such delayed/ stalled projects for productive purposes.
The fund will help nearly 1,600 stalled housing projects in the country, and it is positive that the aspect of NCLT/ NPA will not be a stumbling block to prevent stalled and delayed projects from approaching the fund.”
He also added that that the announcement will prove to be a win-win for both, home buyers as also real estate developers “but the devil in the detail in this case will be quick implementation.”
Jaxay Shah, CREDAI-National Chairman, said, “It is a very welcome change from the initial announcement. Now the only criteria for eligibility is net worth positive projects. This will ensure that the fund is actually deployed to complete incomplete projects which are even NPA or also in NCLT. We are certain that a majority of stuck homebuyers will benefit from the announcement of a Rs 25,000 crore stress fund which is going to be increased in value if needed. Quick deployment of money and efficient decision making for qualification of projects will solve the long pending problems of home buyers. The establishment of an alternative investment fund is also welcoming,”
Deven Choksey, Group Managing Director at KR Choksey Investment Managers, told Economic Times, “It is a fantastic move and is positive for the sector. We should see realty sector coming out of stress eventually. It will solve problem of NPAs in finance companies on one end, and act as a catalyst for de-inventorisation on the other.”
Abhay Upadhyay, President, Forum for Peoples’ Collective Efforts (FPCE), said “names of the 1,600 projects identified should be disclosed so that buyers can heave a sigh of relief. It should be ensured that the money in the escrow account is not directly disbursed to the builders and a committee of homebuyers of these projects be formed to closely monitor the pace of progress.”
Anuj Puri, Chairman- ANAROCK Property Consultants, said, “This is a critically important move which eliminates the ambiguity which surrounded the timelines for setting up the fund, and its actual implementation.”