AFTER DAIICHI PLEA, SC STAYS RELIGARE FINVEST-INITIATED
INSOLVENCY AT 23 COMPANIES
The Supreme Court has
ordered a stay in response to a plea by Daiichi Sankyo on the insolvency
proceedings against 23 companies allegedly linked to the Singh brothers,
Malvinder and Shivinder, on petitions filed by Religare Finvest (RFL). Daiichi
had approached the apex court saying a March 14 order by Securities and
Exchange Board of India (Sebi) had found many of these companies to have
ultimately routed money borrowed from Religare Finvest to the Singhs. Religare
Finvest filed insolvency petitions in July last year on grounds that these
companies had defaulted on loans of Rs 1,900 crore taken from the NBFC. It was
observed that funds amounting to Rs 2,315.09 crore had been diverted from the
books of RFL for the utilisation of promoters and promoter group entities of
Religare Enterprises, the order quoting an independent forensic audit stated.
The ultimate beneficiaries of such fund diversion, prima facie, are Shivinder
Mohan Singh and Malvinder Mohan Singh as the entities were jointly being
controlled by (them) through Shivi Holdings Pvt Ltd and Malav Holdings Pvt Ltd,
respectively, the order stated. The stay has been granted in response to
Daiichi plea that NCLT proceedings initiated by Religare Finvest against some
of judgement debtors and garnishee companies would impede recovery of Daiichi’s
dues and impose moratorium on execution proceeding, said Amit Mishra. The
companies were granted loans on the basis that they were parties ‘known to the
promoters,’ according to internal company correspondence and an audit conducted
by external auditor TR Chadha on behalf of private equity investor Siguler
Guff. Daiichi has also independently filed an application at the NCLT to be
party to the insolvency proceedings against these companies, though sources
close to Religare argued that none of the companies were party to transactions
involving the sale of Ranbaxy to Daiichi Sankyo and were not recipients of
proceeds received by the Singh brothers from that sale. Daiichi’s has won an
arbitration award in Singapore after it sought compensation from the Singhs on
grounds that they concealed information from the drug maker at the time of
Ranbaxy’s sale to the Japanese company about a decade ago.
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PREPARE PLAN TO PAY DAIICHI SANKYO OR GO TO JAIL FOR CONTEMPT,
SUPREME COURT TELLS SINGH BROTHERS
The Supreme Court warned
brothers Malvinder and Shivinder Singh that they may be sent to jail for
contempt of court if they fail to come up with a plan to pay Daiichi Sankyo Rs
3,500 crore as part of an arbitration award. The brothers, also apparently
feuding with each other, said their money was irretrievable. We will send you
to jail if we find you guilty of contempt, said the bench led by Chief Justice
of India Ranjan Gogoi to the brothers, who appeared in person. The contempt
pleas have been listed for hearing on April 11, which means they have until
then to devise a plan to pay the amount. The total amount to be paid to Daiichi
may be higher on account of interest, experts said. The brothers had sold
Ranbaxy Laboratories to Japan’s Daiichi Sankyo in 2008 for $4.6 billion months
before the US FDA banned imports from two of the generic drugmaker’s Indian
plants. The US Department of Justice launched a probe that year, leading to a
guilty plea by Ranbaxy and a $500 million settlement for selling adulterated
drugs.
YOU MADE AN ATTEMPT AT VALUATION?’
A Singapore tribunal
ordered the brothers to pay Daiichi Rs 3,500 crore for withholding information
at the time of the acquisition. The Delhi High Court upheld the arbitration
award in February 2018. Gogoi told the Singh brothers it was embarrassing for
persons of their stature to renege on payments He had asked them for a concrete
proposal to secure the money at the last hearing. The other judges on the bench
were Deepak Gupta and Sanjiv Khanna. Older sibling Malvinder Singh, represented
by senior advocate Kapil Sibal, said about Rs 6,300 crore in assets couldn’t be
recovered. This included the Religare and Fortis brands which though encumbered
could generate value, according to him. He said other unencumbered assets and
businesses could be sold to recover some money but was unable to give the court
an exact valuation of these.
How can you not know? It
doesn’t have to be true to a penny but you must have a fair, approximate idea,
Gogoi said. You can’t say that you own half the world and x, y, and z owe me
this much to creditors. That is neither here nor there. Have you made an
attempt at valuation? Senior advocate Fali Nariman, on behalf of Daiichi,
accused the Singh brothers of attempting to delay the hearing. He also sought a
stay on insolvency proceedings, but senior advocate Parag Tripathi resisted
this on behalf of Religare. The bench stayed that matter.
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DEADLINE PAST, NCLT DRAGS FEET ON BHUSHAN POWER AND STEEL BID
DECISION
As the old saying goes,
justice delayed is justice denied. A resolution plan for insolvent firms is
generally to be found with 270 days in line with the requirements of Insolvency
and Bankruptcy Code. However, now more than 600 days on, there seems to be no
end in sight for the debt-laden Bhushan Power and Steel (BPSL) even as the
National Company Law Appellate Tribunal had directed the Delhi bench of
National Company Law Tribunal to decide on JSW Steel’s bid by March 31. JSW
Steel came from behind and bettered its initial bid to trump Tata Steel’s Rs
17,000 crore offer. The Sajjan Jindal-led company offered to pay Rs 19,650
crore, which included upfront payment of Rs 19,300 crore and an equity infusion
of Rs 350 crore for operational creditors.
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RATAN TATA REJECTS CYRUS MISTRY’S CHARGES OF INTERFERENCE AT
TATA SONS
Rejecting Cyrus Mistry’s
allegation of inappropriate interference during his term as chairman of Tata
Sons, Ratan Tata’s counsel on Friday submitted to the National Company Law
Appellate Tribunal (NCLAT) around 20 e-mails exchanged between the two between
July 2013 and June 2016 to show that Mistry indeed used to seek his guidance on
important business decisions. Abhishek Manu Singhvi, appearing on behalf of
Ratan Tata, informed the tribunal that 18 of the 20 e-mails exchanged between
the two were actually from Mistry’s end and in matters where Tata did not have
enough domain knowledge, he would just let Mistry take a call on them. Singhvi
said Tata wrote a hand-written letter to Mistry on the day he saw a newspaper
advertisement regarding Tata Motors’ Rs 7,500 crore rights issue, stating that
he was more shocked than surprised with the fact that such a huge decision had
been taken without his knowledge. Even as the Mistry group is now terming that
incident as a glaring instance of interference, Mistry on February 4, 2015 –
four days after Tata’s letter – wrote him back, saying: I wrongly assumed that
you were informed. Singhvi said Mistry group had not raised the oppression
issue even then, but started flagging it only after he was removed from the
chairman’s post in October 2016. Mistry took over at the helm of Tata Sons in
2012.
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RBI MAY NEED TO RETHINK AGE LIMIT FOR BANK CEOS
The Reserve Bank of India
may face legal challenges to its rule on the age limit for bank CEOs, unless it
is changed. The RBI caps the age limit for banks at 70. But under the Companies
Act, banks that are also registered companies can have chief executives who are
over 70 years of age by passing a special resolution. IndusInd Bank and HDFC
Bank have their current chiefs reaching the RBI age cap over the next year and
half, said analysts. We believe that an extension in age limit, if it happens,
will only plug the regulatory gap between the corporate sector and banks, said
Motilal Oswal analyst Nitin Agarwal. Recent management changes in Yes Bank,
ICICI Bank and Axis Bank show that the RBI exercises stricter vigilance on
banks as compared to the corporate sector (regulator), Agarwal said. The
central bank will continue to retain its control over bank managements
irrespective of its decision on the age limit, he added. In 2014, RBI raised
the upper age limit for bank managing directors and CEOs to 70 years from 65,
in line with the Companies Act, 2013. Under the Act, a company can also
appoint, or retain, people aged 70 years or older as director if shareholders
approve it by passing a special resolution. As per RBI rules, the current
managing directors at IndusInd Bank and HDFC Bank are set to retire in March
and October 2020, when they would attain the age of 70. There have been changes
at Axis Bank, ICICI Bank and Yes Bank, but those were not driven by the RBI’s
age criteria, but due to performance and disclosure reasons. Yes Bank and Axis
Bank appointed external candidates to lead the bank, while ICICI Bank is headed
by an internal candidate. In the interest of stakeholders, the RBI may take a
dynamic approach and ask the current CEO to continue in an advisory role which
can be constituted after the tenor ends (he can) step down once the new CEO
settles down in a few months, said Rajesh Gupta. In the US, the maximum
retirement age for a CEO is 72 years, with companies having the right to
prescribe a lower limit. In the US banking sector, JP Morgan and Morgan
Stanley, the retirement age for CEO is 72. Nearly 75% of S&P 500 firms have
by-laws that require CEOs to retire at or before 65 years of age. In March
2017, HDFC Bank elevated Paresh Sukthankar to the post of deputy MD but he
resigned in August 2018, increasing the probability of an external candidate
being appointed to lead the bank. Over the past 25 years, HDFC Bank, under
managing director Aditya Puri, has grown to become the largest private bank
with a market share of 8.4% and market capitalisation of 6.3 lakh crore. Its
market cap is more than the next two private sectors banks combined as well as
all PSU banks put together. This has been enabled by a steady 32% compounded
annual growth rate in earnings over the past two decades.
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MOTHER DAIRY SOUGHT PM'S INTERVENTION TO RECOVER RS 190 CRORE
INVESTED IN IL&FS
Mother Dairy Fruit and
Vegetable Private Ltd (MDFVL), the wholly owned subsidiary of National Dairy
Development Board, is one of the investors left in the lurch over the mess at
the beleaguered Infrastructure Leasing and Financial Services Ltd (IL&FS).
In fact, the company had invested Rs 190.84 crore in inter-corporate deposits
of IL&FS in a series of six transactions over August 20-28 last year. The
time of this investment overlaps with the time the infrastructure lending
company started defaulting on its commercial papers and loan repayments and the
soon-to-snowball crisis came to light. According to reports, by mid-September
it had failed to repay about Rs 350 crore worth of unsecured loans to SIDBI in
a series of defaults starting on August 27, while the next day IL&FS'
financial arm defaulted on repaying to its commercial-paper investors. Now
MDFVL is hoping for government intervention to recover its investment of over
Rs 190 crore. Sanjeev Khanna reportedly wrote to Prime Minister Narendra Modi
in February to apprise him of the situation, adding that the IL&FS default
has weakened MDFVL's ability to pay farmers dependent on it. Farmers are
dependent upon MDFVL for their livelihood as the amount invested in IL&FS
was payable to farmers as the initial investment was made for a short duration
(8-16 days maturity period). The failure on part of IL&FS to pay the amount
has resulted in severe cash crunch for MDFVL and it is struggling to pay the
farmers and keep the supply chain of agricultural products running, read the
letter requesting the PM to kindly intervene in this matter.
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RBI’S STILL THE HEADMASTER OF THE CLASS OF DEFAULTERS
After fighting the
regulator for a year, some defaulters celebrated victory this week. But it
looks like finance minister Arun Jaitley and the central bank have something
else in mind. Reserve Bank of India (RBI) Governor Shaktikanta Das was quite
clear on where he stands on the banking clean-up – or the defaulters. Could RBI
come up with an order under Section 35AA of the Banking Regulation Act
unilaterally? The SC order says, no. The central government may, by order,
authorise the Reserve Bank to issue directions to any banking company reads the
Act. That’s what seems to be happening with the Finance Minister saying that
the ruling was more procedural. Das had this to say: The RBI stands committed
to maintain and enhance the momentum of resolution of stressed assets and
adherence to credit discipline. RBI will take necessary steps, including
issuance of a revised circular, for expeditious and effective resolution of
stressed assets. If the new circular has to have any semblance to the one that
went behind, it has to retain the one-day default rule. This would prevent the
companies with cash flow gaming the system by not paying banks on time even
though they have the ability. The plethora of restructuring schemes – such as
CDR, S4A and SDR — should remain buried forever, with bankruptcy courts the
only option to resolve defaults. If any of these come back, the IBC Act will be
worth the paper it is written on. The onus of identifying ‘incipient stress’
should be on the banks, and they must work out resolution plans.
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NO INCREASE IN IRDAI MEMBERS' RETIREMENT AGE FOR NOW
The age of retirement of
whole-time members of the Insurance Regulatory and Development Authority of
India (IRDAI) is unlikely to be increased from 62 years to 65 years. Sources
told that while the regulator had sent a proposal to the government on this
matter, the age has been retained at 62 years. What IRDAI had sought was that
the whole-time members should be treated on a par with the practices prevalent
for those in other regulatory bodies, said a senior official. Other bodies like
Reserve Bank of India (RBI) and Securities and Exchange Board of India (Sebi)
have a retirement age of 65 years. For any new appointment at IRDAI, the
applicants need to have a minimum of two years of residual service. The
candidate's age should not exceed 60 years at the time of application. All
appointments at IRDAI are approved by the appointments committee of the cabinet
that is headed by Prime Minister Narendra Modi. When two candidates have
similar qualifications, age is a criterion that is used for the selection of
candidates in the system. Having 65 years as the retirement age could make the
waiting time shorter as existing members could continue for three more years.
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CERTAIN NBFCS TO GET LICENCE FOR FOREX DEALERSHIP
In a move that will make
it easy to purchase foreign exchange for overseas travel, the Reserve Bank of
India, on Thursday, announced that certain non-banking financial companies will
be able to get a licence as authorised foreign exchange dealer. With a view to
improve the ease of undertaking forex transactions by increasing the last-mile
touch-points of regulated entities to sell foreign exchange for non-trade
current account transactions, it has been decided that non-deposit taking
systemically important NBFCs (NBFCs-NDSI) in the category of Investment and
Credit Companies (ICCs) will be made eligible to apply for grant of Authorised
Dealer Category II licence, said the statement on Developmental and Regulatory
Policies, which was released along with the first bi-monthly Monetary Policy
Statement of 2019-20. The RBI will issue detailed guidelines on this proposal
by the end of the month. At present, under the Foreign Exchange Management Act,
1999, foreign exchange transactions are only handled by authorised bodies such
as banks.
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NEW CUSTOMER-PROTECTION MEASURES ON CARDS FOR ELECTRONIC
PAYMENTS
The central bank would
soon come up with a new set of customer-protection measures aimed at improving
user confidence in electronic payment channels, helping achieve the federal
objective of reducing the use of cash in business transactions. The proposed Reserve
Bank of India (RBI) regulations include having a common timeframe for all
authorised electronic payment systems to respond to customer complaints and
setting up a compensation framework for failed transactions. To have prompt and
efficient customer service in all the electronic payment systems, it is
necessary to harmonise the turn around time (TAT) on the resolution of customer
complaints and chargebacks, and to have a compensation framework in place for
the benefit of customers, RBI governor Shaktikanta Das said. The Reserve Bank
proposes to put in place a framework on TAT for resolution of customer
complaints and compensation framework across all authorised payment systems by
the end of June 2019. The governor said that despite the central bank prescribing
appropriate redressal mechanisms for customer grievances and issuing guidelines
to various payments system operators on paying users in case of failed
transactions, the lack of a common industry-wide mandate is resulting in
non-uniformity in complaint resolution. Currently various payment systems have
various redressal mechanisms. We have found them to be not uniform across the
industry, Das said.
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CCI APPROVES L&T'S BID TO ACQUIRE STAKE IN MINDTREE
The Competition Commission of India (CCI) in a tweet said that
India’s engineering and infrastructure major Larsen & Toubro's deal to
acquire 66.15% of the total equity shareholding of Mindtree Limited has been
approved Founders of Mindtree have publicly attacked L&T’s acquisition
proposal despite the latter claiming that it would let the Bengaluru-based firm
run independently. L&T made an open offer after it signed a deal on March
19 with Mindtree’s long-term investor and Cafe Coffee Day promoter VG
Siddhartha to buy his 20.32% stake in the company for Rs 3,269 crore. It has
tasked Axis Capital to buy an additional 15% shares from the open market.
Mindtree board had last month appointed the panel of independent directors to
review L&T’s open offer and recommend by May 10 whether its shareholders
would benefit by selling their shares or not. The open offer begins on May 14.
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LAKSHMI VILAS BANK BOARD
APPROVES MERGER WITH INDIABULLS HOUSING FINANCE
The board of private sector lender Lakshmi Vilas Bank approved
a share-swap acquisition by housing finance firm Indiabulls Housing Finance.
Lakshmi Vilas Bank shareholders will get 0.14 share of Indiabulls Housing
Finance for every 1 equity share held or in other words 100 shares of Lakshmi
Vilas Bank will fetch 14 shares of Indiabulls Housing Finance. The merger is
subject to the receipt of approval from the Reserve Bank of India and all other
compliances under the Banking Regulation Act, the bank said. Lakshmi Vilas Bank
Limited had total assets of ₹40,429 crore and capital and reserves of ₹2,328
crore as on March 31, 2018. On the other hand, Indiabulls Housing Finance had
total assets of ₹1,31,903 crore and consolidated net worth of ₹17,792
crore as on 31 December, 2018. For Indiabulls Housing Finance, the merger will
help it get access to stable low-cost funding in the form of public deposits
and expanded distribution franchise. Lakshmi Vilas Bank said that it believes
that the merger of such two organisations will create a large and healthy
diverse retail asset book, high capital base for strong growth, huge
opportunity to foray into newer businesses that may increase the risk fee
income base of amalgamated entity such as wealth management, asset management
and securities, tap into varied but experienced management and skilled
personnel to develop a successful capital accretive model.
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FOREX RESERVES SWELL TO $411.9 BILLION
India's foreign exchange reserves
rose to $411.91 billion as of March 29, compared with $406.67 billion a week
earlier, the Reserve Bank of India said on Friday. The maiden dollar-rupee swap
conducted by the central bank last week helped the country's foreign exchange
reserves swell by a healthy USD 5.237 billion to USD 411.905 billion in the
week to March 29, RBI data showed Friday. Foreign currency assets, a major
component of the overall reserves, swelled by USD 5.248 billion to USD 384.053
billion in the reporting week. In a bid to infuse liquidity into the system,
the Reserve Bank had on March 26 conducted a USD 5 billion dollar-rupee swap
auction, which received bids for over USD 16 billion. Gold reserves remained
unchanged at USD 23.408 billion in the reporting week, according to data from
the central bank. The special drawing rights with the International Monetary
Fund (IMF) dipped by USD 3.6 million to USD 1.456 billion. The country's
reserve position with the fund too decreased by USD 7.4 million to USD 2.986
billion, the apex bank said.
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RUPEE EXTENDS SLIDE, DROPS 6 PAISE TO 69.23 VS USD
The rupee skidded 6 paise
to finish at 69.23 per US dollar Friday, largely owing to increasing demand for
the greenback from importers. Forex traders said strengthening of the dollar
against key currencies overseas also kept the rupee under pressure, though
persistent foreign fund inflows restricted the fall. At the Interbank Foreign
Exchange (forex) market, the domestic unit opened at 69.11. It moved in a range
of 69.33 to 69.05 before finally ending at 69.23, down 6 paise over its
previous close. The dollar index, which gauges the greenback's strength against
a basket of six currencies, inched up 0.01 per cent to 97.31. Brent crude
futures, the global oil benchmark, was trading 0.37 per cent lower at USD 69.14
per barrel. Foreign institutional investors (FIIs) remained net buyers in the
capital markets, putting in Rs 797.90 crore Friday, as per provisional data.
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IN A FIRST, SEBI GIVES NOD TO RS 10,000 CRORE ‘AIRPORT FUND’
In perhaps a first for the
country, markets regulator SEBI (Securities and Exchange Board of India) has
approved an ‘Airport’ specific fund. ‘Taking Off To The Future Airport Fund’
which can raise a capital of up to Rs 10,000 crore ($1.5 billion), has been
approved by SEBI as a ‘Category II Alternative Investment Fund’ (AIF).
Chennai-based ‘Taking Off To The Future Investment Management LLP’ is the
sponsor and the investment manager of the fund. The management and operation of
‘Sponsor/Investment Manager’ is led by its designated partner Gigi George.
Investors would start getting returns from the fund from the third year, George
said. The potential is huge. But the issue in India is that it is not easy to
get capital for large projects with long tenure, he said. The fund would receive contributions from banks,
corporates, institutional investors, insurance companies, pension funds, high
net worth individuals and other investors in India and abroad as permitted
under the AIF Regulations.
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300 DEVELOPERS FINED UNDER RERA
Promoters and developers
of more than 300 real estate projects across Gujarat have been penalized by the
Gujarat Real Estate Regulatory Authority (GujRERA) for failing to file the
mandatory quarterly progress reports over the last nine months. The regulatory
authority has, in most cases, fined each errant developer Rs 50,000. Under the
new realty law, all real estate developers must inform the authority every quarter
about construction and financial progress of their projects. The process for
submission of quarterly reports began in June 2018. Since then, several
developers have penalized for non-compliance, under Sections 11 and 63 of RERA,
said senior officials in the regulatory body. Although the penalty for
violation of Section 63 of the Act can go up to 5% of the project cost, in most
cases the penalty was fixed at Rs 50,000, to ensure compliance. The level of
compliance in the state is quite high, given that there are 5,219 real estate
projects registered with the authority and only 300 or so have been found to be
non-compliant. From the number of projects registered, more than 20,000
quarterly returns need to be filed, but just 300-odd developers have failed to comply.
This means compliance is robust in Gujarat, the officials added.Most promoters
who did not comply with the quarterly filing norm submitted to the authority
that their violation was unintentional as the law is new and they were not
fully aware of various provisions.
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BE MORE VIGILANT OF DEVELOPERS' ESCROW ACCOUNTS: UP RERA ASKS
BANKS
The Uttar Pradesh Real
Estate Regulatory Authority (UP RERA) Thursday said it has sent letters to the
zonal heads of all 42 banks to be more vigilant of the escrow accounts of the
promoters and developers. A copy of the letter has also been sent to the
director general of the Directorate of Institutional Finance, Government of
Uttar Pradesh, UP RERA said in a statement. The authority has asked banks for
strict compliance of the provisions of Section-4 (2) (I) (D) of RERA Act, 2016,
which warrants 70 per cent of amounts realised for real estate projects to be
deposited in a separate account and to be maintained in a scheduled bank to
cover the cost of construction and the land cost and shall be used only for
limited purposes. UP RERA Chairman Rajive Kumar said, It has come to the notice
of the Authority that some of the promoters are not complying with the
statutory provisions of the law and withdrawing the amount from the designated
account without submitting the requisite certificate. This is grave violation
of the mandatory provisions of the Act. Abrar Ahmed said the separate accounts
related to 2,651 projects registered in RERA are being maintained in 962
branches, some of them are based out of Uttar Pradesh. We have sent separate
individual letters to all the 962 branches by speed post. It has also come to the
notice of the Authority that some of the banks, especially the ones that have
sanctioned loan to the promoter, arbitrarily adjust the entire amount deposited
in the account against the outstanding loan of the promoter instead of
transferring 70 per cent of the money collected to the escrow account for the
purposes of construction and payment of the cost of land of the project, the
statement said. It is further clarified
that if the banks do not adhere to the provisions of the Act, the matter will
be brought to the notice of the chairman of the respective banks and the
secretary of the banking department of the Government of India for appropriate
action in the matter. In total, there are 42 scheduled commercial banks -- 21
each public sector and private sector lenders.
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DATA HINTS AT REVIVAL OF HOME SALES AFTER 3 YEARS OF SLOWDOWN
Early trends show that
home sales in the city, which remained muted for the past three years, are set
for a revival this year. As per property consultant Anarock, as many as 12,340
houses were sold in the city between January and March this year as compared to
6,850 in the same quarter of the previous year. The data also revealed that the
first quarter sales figures of 2019 were way higher than that of the same
period of the past three years — 2016, 2017 and 2018 (see box). However, the
data showed that the home sales in the first quarter of 2019 were at least
10-25% lesser than the peak achieved in 2012-2015. The rise in home sales this
year so far could be attributed to the slew of steps taken by the government in
the interim budget, Anarock, whose sales figures are based on developer
information and not on actual property registrations, stated. Having said that,
long-term data from three different property consultants showed that the
slowdown in home sales began even before demonetisation was announced in
November 2016. And it continued well into the years after. It has been the
residential real estate sector’s unfortunate fate to have been held hostage by
a variety of negative impulses over the past 2-3 years. Overpricing and lack of
confidence in developers due to heavy project delays were two of the initial causes.
When RERA was announced, potential buyers decided to wait until it was
implemented. Later, demonestisation and GST took further wind out of the
sector’s sails and just when the effects of these two policy changes started to
be digested, the NBFC crisis and all its accompanying negative sentiment hit.
Now, buyers are waiting for the outcome of the forthcoming elections, Anuj
Puri, said. On one-hand there is a slowdown in sales and on the other, there is
a slowdown in new launches as well. Developers look to keep the prices up by
adjusting the supply sharply downwards, realty experts said. So much is the
impact of low sales that the Maharashtra government did not increase the ready
reckoner rates (the floor price below which developers cannot sell) this year. According
to a property broker, the slowdown is suggestive of lack of consumer confidence
in the market and also in the law-mechanisms to take wrong-doers to task. The
data further showed that out of the unsold inventory of four quarters of sale
in Pune, only 11% of houses vacant are ready-to-occupy. This means that people
are making purchase decisions only when a house is ready. While developers have
cut prices, buyers are still finding the existing rates to be high. Pune market
has a significant proportion of buyers employed in the information
technology/information technology enabled services (IT/ITeS) industry and the
wage growth in the sector over the past few years has been low to moderate.
Hence, despite the reduction in apartment prices by developers, affordability
is still an issue, Paramvir Singh Paul, branch director – Pune, Knight Frank
India, said. He said investors were also staying away from investing in
residential properties as they were not expecting any price appreciation in the
coming years.
#For Source of Information copy and paste the heading in google.
Thanks & Regards,
CS Meetesh Shiroya
Thanks & Regards,
CS Meetesh Shiroya
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