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Govt booster for stalled housing projects puts realty stocks in focus; Indiabull Real gains 5%

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Finance Minister Nirmala Sitharaman on November 6 announced another set of measures to boost the beleaguered real estate sector and infuse confidence among hassled homebuyers.

The real estate stocks ended with a gains of 1-5 percent on November 7, a day after Finance Minister Nirmala Sitharaman announced measures to boost the stressed real estate sector.

Finance Minister Nirmala Sitharaman on November 6 announced another set of measures to boost the beleaguered real estate sector and infuse confidence among hassled homebuyers.

Providing relief to millions of homebuyers, the Cabinet approved the creation of a “professionally managed” Rs 25,000 crore fund for boosting stalled middle and low-income RERA registered housing projects that are networth positive, Finance Minister Nirmala Sitharaman said.

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“The move will help relieve financial stress faced by a large number of homebuyers. This will also release a large number of funds stuck in these projects for productive use in the economy,” Sitharaman said at a press meet.

Mitesh Thakkar of Miteshthakkar.com is of the view that one may buy Ajmera Realty with stop loss at Rs 125 and target of Rs 142.

“It’s a positive move for the liquidity starved real estate sector. Rs 25,000 crore will be a good amount to address chronic situations. Though one need to see the modalities on implementation, time is of essence in delayed projects,” Sharad Mittal, CEO & Head, Motilal Oswal Real Estate Funds.

Here are the key points from the press meet:
– SBI Cap will prioritise projects as per viability
– Net worth key factor for disbursement
– SBI Cap will manage real estate AIF through an escrow account
– Projects can be NPAs/incomplete to be eligible, but not marked for liquidation by NCLT
– Projects must be net worth positive to avail funds, percentage of completion not a criteria
– RBI to soon issue clarificatory note on realty fund

Source: Money Control

ALSO READ: Government approves Rs 25,000 crore alternate fund for stalled housing projects

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