The fund has attracted interest from investors such as government of India, State Bank of India, LIC, HDFC and all major public sector banks. The Government of India has committed a fund infusion of up to Rs 10,000 crores in the Special Window and further investments will be brought in through institutional and private investors to generate a total corpus of Rs 25,000 crore, SBICAP said in a statement.
This category II Alternate Investment Fund (AIF) has been formed under the Special Window for Affordable and Mid-Income Housing as announced by the Finance Minister Nirmala Sitharaman on September 14. The fund aims to last-mile financing to enable completion of construction of stalled housing projects. This scheme was approved by the cabinet on November 2.
According to government’s estimated around 4.58 lakh stalled housing units in India. The fund aims to provide senior capital for last mile funding to complete construction of housing projects. The government of India is the Sponsor while SBICAP Ventures is the investment manager to this fund.
SBICAP Ventures estimates that this capital should be broadly sufficient to complete almost 1 lakh stalled units and release locked up capital of Rs 65,000 crore invested in these projects.
“The Fund has made remarkable progress since its announcement on November 6. We have substantially completed the fund raising, have scaled up the team, formed the investment committee and have begun examining potential investment opportunities,” said Sanjiv Chadha, MD & CEO, SBI Capital Markets and Chairman, SBICAP Ventures.
For SBICAP Ventures, a wholly-owned subsidiary of SBI Capital Markets, this fund is a major step in its track record of investments that seek to invest for improving the quality of life, effectively addressing stress in the housing sector, while still generating commercial return for its investors.
It is expected that capital provided by the fund will help struggling home buyers get a home, free locked up capital in these projects, provide employment and increase the demand for construction sector commodities, thus providing a boost to economic growth.
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