The Supreme Court directed state-run NBCC (India) Ltd. to complete the construction of apartment projects of Amrapali Group, providing relief to 42,000 homebuyers.
Do you think these project are financially viable?
The project is completely financially viable. All this while NBCC was shying away from taking the responsibility of taking over the 16 projects of Amrapali in Noida and Greater Noida.
How will NBCC get money to complete the project?
The court has directed NBCC to complete the pending projects. How do they do it is up to them. But, according to our research, the economics of financing could be following:
1. 10 percent amount given by the builder to the authorities has been ceased by the court and it can be used as seed capital in the construction which amounts to approximately Rs 512 crore.
2. Rs 3,500 crore will be collected from the sale of unsold inventory, homebuyers’ pending receivables, default payments of homebuyers and recovery from key management persons holding homebuyers’ money. This was also highlighted by the forensic auditors in their report submitted in the court.
3. Another chunk of Rs 3,000 crore may come up by sale of additional floor area ratio/floor space index and unused chunk of land in a development-based model.
4. Additionally, Amrapali Group’s properties worth Rs 700-800 crore are already under auction in Delhi and the personal properties of directors and promoters have been attached which may also go to sale sooner or later and may fetch around Rs 1,000- 1,200 crore in total.
What does revocation of RERA registration mean?
This means the projects’ RERA registration has been denotified and the project will now not come under RERA. After NBCC completes the project, a tripartite agreement will be signed between homebuyers, NBCC and Noida/Greater Noida Authority. Within 30 days of signing this agreement, homebuyers will get the registration of their homes and then they can pay the stamp duty.
What is the next course of action that you plan to take?
We will scrutinise and then focus on the execution of the order. Now these projects will be delivered between 1-3.5 years. We need to go through all the modalities of the order. We will check whether there will be a buyers’ committee to oversee the execution of project completion. Our next target is to see that the order gets executed properly.
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