An alternative investment fund the central government launched last month to revive stalled housing projects has hit its first close at Rs 10,530 crore ($1.5 billion), the company that manages the vehicle said.
SBICAP Ventures Ltd, a wholly owned subsidiary of SBI Capital Markets Ltd, said in a statement that the Special Window for Affordable and Mid-Income Housing (SWAMIH) Investment Fund I has attracted interest from State Bank of India, Life Insurance Corp, HDFC Ltd and major state-run banks.
The fund is sponsored by the Indian government, which has committed Rs 10,000 crore. It was announced by finance minister Nirmala Sitharaman to extend last-mile funding to finish affordable and mid-income housing projects. The projects must meet a few other parameters to be eligible for funding, including that their net worth should be positive and they should be registered with the Real Estate Regulatory Authority.
While the fund is widely expected to improve sentiment, many industry executives and analysts say it will be unable to pull out of the slump a sector that is struggling with an estimated 4.58 lakh stalled housing units.
Still, the SBICAP statement said that the capital provided by the fund will help struggling homebuyers get home, free locked up capital in these projects, provide employment and increase demand for construction sector commodities, thus providing a boost to economic growth.
Sanjiv Chadha, managing director and chief executive officer at SBI Capital Markets, said the fund has made “remarkable progress” since its announcement on November 6.
“We have substantially completed the fundraising, have scaled up the team, formed the investment committee and have begun examining potential investment opportunities,” said Chadha, who is also chairman at SBICAP Ventures.
