Nirmala Sitharaman: Not Rs 25,000-cr, FM actually gave us a Rs 1,25,000-cr boost: Vishal Kampani

Normally, construction costs are 20% of sales. So if Rs 25,000 crore is the number which is going to complete these projects, you are going to release almost Rs 80,000-100,000 crore of cash flow in the system, says Vishal Kampani, Group MD, JM FinancialNSE 9.27 %. Excerpts from an interview with ETNOW.

The Finance Minister has announced the Rs 25,000-crore alternate investment fund for the real estate sector. Is this enough? Does it solve the liquidity problems of the sector?
The issue started off with being an issue focussed on liquidity. But now the issue has moved to asset quality as extended period of not having liquidity can result in asset quality issues. The good part is that the government has realised this. Many of the large banks have realised this and there is a lot of support coming in for NBFCs and we are seeing that on the ground. This last scheme which has been announced last night by the finance minister is a fantastic scheme giving Rs 25,000 crore of priority finance for completion of real estate projects to me and will release Rs 1 lakh crores of liquidity in the sector.

When you look at the Rs 25,000 crore of projects, these are already under construction. Normally, construction costs are 20% of sales. So if Rs 25,000 crore is the number which is going to complete these projects, you are going to release almost Rs 80,000-100,000 crore of cash flow in the system via sales and this is a big number.

via Nirmala Sitharaman: Not Rs 25,000-cr, FM actually gave us a Rs 1,25,000-cr boost: Vishal Kampani

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