Last week the Supreme Court provided much needed relief through its judgment for all home buyers who have booked apartments in Amrapali projects. After prolonged delay and non-completion of the apartments by the developers due to lack of finance home buyers welcomed the court judgment with open hands. The Supreme Court directed SBICap Venture to issue Rs.625 crore from the SWAMIH Investment Fund for six stalled Amrapali developer projects.
A bench of the Supreme Court appointed a receiver to finalize the legal framework to regulate the funding of Rs.625 crore and submit the report within four weeks. This order will accelerate the securing of funds required for completion of stalled projects.
The SWAMIH Investment Fund is a last-mile fund or special window for providing funds for completion of stalled residential projects. This last-mile fund is only available for completion of construction of affordable and mid-segment residential projects. As of now, SBICap Venture has approved about Rs.10,000 crore funds for the 101 housing projects out of Rs.25,000 crore SWAMIH Fund.
The bench asked the receiver to leave the issue of IRR (internal rate of return) 12 percent to the court and directed NBCC to regulate and supervise the projects and handover to home buyers post-completion. SBICap Venture will issue Rs.625 crore from the SWAMIH Investment Fund at IRR 12 per cent for six Amrapali projects are Silicon City 1&2, Crystal Homes, Centurion Park Low Rise, O2 Valley, and Tropical Garden. No other charges are levied on these six Amrapali projects from home buyers such as professional expertise and monitoring of the project. All these activities are done by NBCC and receiver’s committee.
The apex court order brought sighs of relief to suppress home buyers and within these six housing projects, it will cover 6,973 units in total. This order will set a precedent for other financial institutions and banks to fund stalled housing projects. It will infuse goodwill among other financial institutions to consider financing stalled residential projects.