SC approves SBI CAP funding for six Amrapali projects
Several housing projects started by the Amrapali group in Noida and Greater Noida were stuck due to financial mismanagement by the private firm.Updated: Aug 26, 2020 07:21 IST
The Supreme Court on Tuesday directed SBI Capital Markets (SBI CAP) to start the funding of six Amrapali projects in Noida and Greater Noida.
SBI CAP, as per its offer document submitted to the Court on an earlier occasion, agreed to infuse a sum of ₹995 crore in six commercially viable projects. On the aspect of interest chargeable on this loan and other related aspects, the Court posted the matter for hearing on Monday.
SBI CAP, represented by senior advocate Harish Salve, informed the apex court that as regards six projects, there was no dispute. These were Noida-based Silicon City—1&2, Crystal Homes, Heart Beat City—I, Heart Beat City - II and Greater Noida-based Centurion Park projects (Low Rise, O2 Valley, Tropical Garden).
There are 8,929 dwelling units in these six projects of which 7,658 are sold units. The combined project cost is over ₹1,600 crore of which SBI CAP proposes to invest ₹995 crore out of its stress funds.
The proposal for funding entails an interest component of 12% which was not agreeable to the Court.
Court-appointed Receiver and senior advocate R Venkatramani said, “If stress funds are meant to reduce stress on flatbuyers, can it be at 12% interest?” His view was supported by advocate ML Lahoty appearing for homebuyers who said, “Home loans are available at rates less than 8% per annum. The proposed internal rate of return on investment at 12% is harsh on homebuyers. If the Court accepts this rate, the burden should not be passed on to the homebuyers.”
Salve said, “We are taking 100% risk by funding in these projects. Flat-buyers are not paying anything more. The National Building Construction Corporation (NBCC) is not willing to take the risk. At the end of the day, we want to make profit out of this investment.”
The apex court asked Salve if something could be done at his end so that pressure could be eased off homebuyers.