Torbit Spotlight 12 May 2023

Rs 500 Crore Realty-Focused AIF

Nisus Finance and Investment Managers , the alternative investment arm of Nisus Finance Group has come up with a Rs 500 crore Sebi Category II AIF- Real Estate Special Opportunities Fund -1. It follows Nisus’ Category-II AIF called RECOF-! with a corpus of Rs 500 crore which marked its first closure at Rs 250 crore in July 2020.

To be managed by Nisus BCD Advisors, a joint venture between NiFCO and BCD India, RESO-1 objective is to generate attractive and risk-adjusted returns through medium-term debt , equity or mezzanine investments in special situation residential and commercial projects.  Its hurdle rate of return is fixed at 12% which is the minimum rate of return required by investors or companies before undertaking any investment or project.

This realty-focused Alternate Investment Fund – RESO-1 is targeting an internal rate of return (IRR) of 20-21%. This is quite an attractive IRR as Investments in real estate with an IRR of 18% or more are considered handsome returns.

RESO-1 is looking at first close within 12 months  from the date of registration with Securities and Exchange Board of India (SEBI). It seeks to make the final close within two and a half years from the first close.

Krisumi Corporation Eyes Rs 1200 crore Revenue

NCR-based leading real estate developer – a joint venture company formed by  Sumitomo Corporation  of Japan and Indian corporate, Krishna Group is targeting a revenue of Rs 1200 crore in the financial year 2023-24.

The company, according to its managing director, Mohit Jain , has already developed the first phase  of its integrated township project in Sector 36A Gurgaon, spanning 5.6 acres and featuring over 430 apartments. The company is now preparing to launch phase 2 and phase 3 of the project. While phase 2 is expected to be launched in June, the launch of phase 3 may happen only towards the end of the year.

Meanwhile, Krisumi Corporation is looking for expansion with a focus on high potential Dwarka Expressway which has boosted the housing demand in the area.

YEIDA Launches Group Housing Plots

Yamuna Expressway Industrial Development Authority (YEIDA) has come up with a group housing plot scheme involving a total of 1.5 lakh sq nts . The plot area in Sector GH-01A 22D  is 60000 sq mts . In sectors GH-01B 22D and GH-01C 22D , plot sizes are 45000 sq mts each.

The processing fee for all plots is Rs 5 lakh. The payment plan involves 10% as earnest money, 40% as allotment money after adjusting earnest money deposited earlier within 60 days. The remaining 60% is to be deposited in 3 years in 6 half yearly instalments.

The rate of allotment of plots is Rs 30750 per sq mtrs. Total amount is Rs 184.50 crore, Rs 138.75 crore and Rs 138.375 crore respectively. The sectors where plots have been launched have great locational advantage. They are close to the Yamuna Expressway and the upcoming  Noida International Airport at Jewar with proposed metro connectivity. They enjoy proximity to Noida International Film City, Personal Rapid Transit System , Medical Devices and Toy parks, besides Electronic Manufacturing Cluster.The sectors housing the plots are close to the upcoming Metro connectivity to Jewar Airport .

Supertech’s  Rs 1600 crore Fund Push For Completing Stalled Projects

NCR-based real estate developer, Supertech is working on a plan to raise Rs 1200-1600 crore to finish its stalled projects. This move follows National Company Law Appelate Tribunal’s (NCLAT) June 2022 order allowing Supertech promoters to raise funds on a priority funding  basis to complete its projects and Supreme Court deciding against intervening in NCLAT order. NCLT in its order had also said not to form a committee of creditors and not to proceed with the IBC bidding process. The NCLAT ruling had declared that the Eco-Village-Ii project  of Supertech along with the construction of other projects will proceed without any hiccup.Prior to this NCLT had issued an order for the Committee of Creditors (CoC0 to take control of Supertech. This decision of the NCLT was challenged by the homebuyers before NCLAT. NCLAT had given directions, limiting CoC0 to just oversee only one project , allowing remaining projects to be constructed by  the Insolvency Resolutional Professional.

According to Supertech’s Managing Director, Mohit Arora , Supertech has arranged priority funding from Oaktree Financial global fund to complete all its pending projects over the next two years, fulfilling its commitments to various stakeholders including homebuyers, bankers, lending institutions and land authorities.  This is set to bring relief to about 7000 home owners.

Government Plans Model Realty Contract

The Union government is planning to develop  a model contract for real estate transactions for the purpose of standardising sale agreements, narrow expectation gaps and boost transparency , thereby empowering consumers to make informed decisions.  According to Union consumer affairs secretary Rohit Kumar Singh, a model framework of engagement between the seller and buyer is being framed as  the agreement between the seller and the buyer is not standardised. The move aims to protect consumers  who are investing their life’s savings in homes particularly under-construction homes.

The proposed template will include consumer checklists to compare against developer contracts, ensuring transparency. Through this preventive measure, consumers will be saved from getting duped.  in addition to streamlining real estate transactions, the proposed model contract is expected to reduce the burden on consumer courts where nearly 5.5 lakh cases are pending, many of them belonging to real estate sector.