LIC housing finance referred 14 projects that are stuck for last mile funding

LIC Housing Finance Ltd. has recently mentioned 14 real estate projects for last-mile funding through the alternative investment fund (AIF) which is to revive the stalled housing projects, said chief executive Siddhartha Mohanty.

Mohanty told reporters that LIC Housing Finance’s exposure to these projects is about ₹1,100 crore and it is the poly financier for all these real estate projects.

“We are very much in control (of our builder portfolio). We do not have any joint lending or any consortium lending,” he said, adding that LIC HFL has advised those developers to be in touch with SBICAP Ventures, the investment manager.

On Jan 31, Mohantay had told analysts that in total there are 260 accounts in the developer loan portfolio and LIC has identified non-performing assets (NPAs). five such cases are also referred by LIC to National Company Law Tribunal (NCLT). For the December quarter FY 20, the top 10 developer loans account for roughly 15% of the developer loan book. Moreover, of the total bad loans of ₹5,686 crore, are more than ₹2,000 crore is from project loans and the rest is from the retail segment.

Last year in the month of November, the Cabinet had given approval for the creation of a ‘special window’ fund for providing priority debt financing for the completion of stalled housing projects that are in the affordable and mid-income housing sector.

As the study by SBICAP Ventures, Around 4.58 lakh stalled housing units are there and they need an aggregate  of ₹55,000 crore to complete stalled projects.

Last week, RBI allowed banks to extend the date of commencement of commercial operations (DCCO) of project loans for commercial real estate, delayed for reasons beyond promoters’ control, by another year. RBI said that this extension will not let the asset classification get downgraded. Through this, the RBI has allowed banks the leeway to not classify such loans as non-performing and save on provisions.