SBICAP Ventures vetting 18 realty projects for Rs 3,000-crore funding

SBICAP Ventures is vetting last-mile funding to 18 stuck residential projects with a potential disbursal of Rs 3,000 crore. The total value of these projects is Rs 22,000 crore. Irfan Kazi, chief investment officer of SBICAP Ventures, said investment panel of fund had met four times.

The disbursement in two projects — one in Mumbai and other in Bengaluru — having 640 housing units has been done. The fund had looked at 300 projects across the country, Kazi told media on the sidelines of a real estate summit organised by the Confederation of Indian Industry (CII). It is a category II alternate investment fund formed under the special window announced by the Centre to provide last-mile funding for stalled affordable and middle-income housing projects. SBICAP Ventures, a subsidiary of SBI Capital Markets, and the Union government are investment fund managers.

The fund achieved its first closure in December 2019 with commitments for Rs 10,530 crore. The government, SBI, LIC, HDFC, and other leading public sector institutions are among those that have put money into the fund. Further investments will be brought in through institutional and private investors to generate a corpus of Rs 25,000 crore. 

The company is in talks with some global investors, including sovereign funds, for investment. 

Being a provider of last-mile financing, the fund will get priority over existing lenders to projects for repayments. It may share the cash flows with existing lenders out of money coming from receivables and sale of inventory, Kazi said. The funding is being provided at lending rate of 15 per cent per annum. 

Some of the projects being considered for financial support may already be in the National Company Law Tribunal (NCLT). Some projects may go through NCLT process after completion. 

The fund can finance up to Rs 400 crore per project, depending on the requirements. The maximum exposure per developer that fund could take is capped at Rs 800 crore.