Yesterday the government gave a green flag to a relief fund wherein Rs. 25,000 crore will be invested to complete the housing projects aiming to help over 4.5 lakh buyers. Today, as the news surfaced, Realty companies, Housing Financing companies, and banks who help people buy homes saw surge in their share prices.
The government said that it will put Rs. 10,000 crores in an investment fund to revive the housing projects and SBI (State Bank of India) and LIC (Life Insurance Corporation) will put in another Rs. 15,000 to the fund.
Both Indiabulls Housing Finance Ltd., and National Buildings Construction Corporation (NBCC) Ltd saw a surge of 15% and 11% in share price respectively earlier today.
As of the developers themselves, Sobha Ltd., Oberoi Realty Ltd., Godrej Properties Ltd., Indiabulls Real Estate Ltd., and The Phoenix Mills Ltd., saw a rise of 3%, 2%, 0.5%, 5%, and 2% respectively.
Amongst the 50 companies listed in NIFTY, IndusInd Bank Ltd. saw the most benefit with share price rising 3%, HDFC Bank Ltd. too was among the top 5 gainers with share price increasing by almost 2%.
According to the statement made by the Finance Minister Nirmala Sitharaman, the housing projects wherein a unit is worth Rs. 2 crore or less in Mumbai, Rs. 1.5 crore of less in Delhi NCR and other metro cities, and Rs. 1 crore or less in other cities of India will get the benefit from this relief fund, on Wednesday.
Sitharaman said ‘The projects need to be registered in RERA (Real Estate Regulation and Development Act) and their net worth should be positive. Even if the project has been declared an NPA or dragged to NCLT but not asked for liquidation will also benefit’.
In this economic slowdown, Realty sector has been hit the hardest as the developers have been facing major drop in Sales, drop in prices, doubtful and timid investors, and banks who are not willing to give these developers loans fearing defaults.