Amrapali asset auction brings hope
Buyers say sale may help pave the way for construction; developers call it a morale booster for Delhi-NCR market
Avilla in Goa, 15 luxury cars, including a few high-end Mercedes Benz and Audis, malls in Bareilly, Muzaffarpur, Gaya, and a hotel in Greater Noida worth more than ~15 billion are all properties owned by the Amrapali Group that are up for sale.
Homebuyers who have been waiting to get the keys to their flats for almost a decade now hope that a planned and timely sale would help in restarting the stalled construction process.
Calling the embattled Amrapali Group the biggest liar, the Supreme Court had ordered attachment and auction of the realty firm's properties. The top court also ordered the attachment of the group's four swanky corporate offices in Noida and Greater Noida, and asked the Delhi-based Debt Recovery Tribunal (DRT) to auction them.
According to industry insiders, the steps taken by Supreme Court would help in ensuring that some of the lost confidence returns in Delhi-NCR market. “Amrapali Group tainted the whole market for all developers. It has affected most of us so badly that we found projects in other regions just to make up for losses on home ground. This move was much needed," said a senior member of National Real Estate Development Council (NAREDCO).
Homebuyers hope that the money would be used by the National Buildings Construction Corporation (NBCC) to start the stalled construction process. According to sources, NBCC in its report said roughly ~85 billion would be required to complete the 15 projects of Amrapali Group constituting of around 46,575 units.
To cover part of the costs, the construction public sector unit plans to sell 4,885 unsold inventory for around ~26 billion. It also plans to ask the homebuyers to pay the balance remaining for the units they had bought, collective value of which is around ~38.5 billion.
However, homebuyers and industry experts fear that the plan has a lot of moving parts to be successfully initiated. Also, NBCC has not yet clearly said if it would provide ~10 billion required to start the completion and refurbishing process.
"This money would be enough to start construction. Once that happens then NBCC can then go ahead smoothly with its other plans around the projects. But all this needs to be done in a timely manner and at an optimal valuation so that maximum money for construction is generated," said Dipankar Kumar, vice-president Noida Extension Flat Owners Welfare Association (NEFOWA).
According to sources, NBCC is relying on getting a chunk of the capital from selling the unsold inventory, which in the present real estate scenario in Delhi-NCR seems extremely difficult.
Also, even if the homeowners are ready to pay the remainder sum, their banks are not agreeing to disburse it. Banks had stopped disbursing the money to the project soon after the controversy around Amrapali Group started. Experts believe it would require NBCC having discussions with all the banking stakeholders and ensuring that things are back on track. No one from NBCC was available for comments.
The Supreme Court has directed DRT to auction all the attached properties, including the hotel, malls, corporate offices, movie hall, factories and lands across India.
The properties the court directed to be attached forth with and auctioned by DRT include a five-star hotel Amrapali Holiday Inn Tech Park at Greater Noida in Uttar Pradesh; a FMCG company called Amrapali Biotech and Mums situated in Rajgir and Buxar districts of Bihar, among others.