A multibillion-dollar fund created by the Indian government to finish stalled housing developments in the country is on track to deliver 4,000 units in the upcoming fiscal year.
The fund’s government-appointed manager, SBICAP Ventures, plans to hand over 16 projects left unfinished amid an economic slowdown and a credit crisis in the development sector, according to Bloomberg.
The government created the fund in November 2019, when roughly $63 billion worth of projects across the nation sat unfinished. Projects stalled as developers failed to pay their mortgages and the unfinished units became known as zombie homes.
The Indian government has a 50 percent stake in the fund. Life Insurance Corp. and the State Bank of India each have 10 percent stakes. There are another 11 public and private investors.
The fund has a 12 percent internal rate of return, according to SBICAP’s chief investment officer, Irfan A. Kazi.
Kazi said that the fund has raised around $1.4 billion of its targeted $3.5 billion and that the Indian government has promised “more will be made available when required.”
SBICAP has approved funding for 159 projects with 100,000 units among them. About a quarter have received all the approvals needed to move forward.
Developers large and small in India have found themselves in financial straits. Last spring, the country’s largest developer raised enough money in a bond sale to narrowly avoid defaulting on hundreds of millions of dollars in debt.
[Bloomberg] — Dennis Lynch
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