Maha Govt files ‘cheating’ case against Maple Group

A complaint was filed at the Shivaji Nagar police station in Pune by the State Government against The Maple Group which had recently published advertisements to promote its housing scheme that offered a one-bedroom-hall kitchen flat for just Rs 5, 00,000 on the outskirts of Pune.

The government had earlier issued a notice to the Maple Group seeking clarity on the misleading advertisements carrying images of PM Narendra Modi, CM Devendra Fadnavis and Pune Guardian Minister Girish Bapat. “We had also shot off a letter to the developer to inquire about the credentials of the project. However, since this did not elicit any response, it prompted us to lodge a complaint against the group suo-moto,” said Tushar Doshi, Deputy Commissioner of police.

The case has been registered under 420 (cheating and dishonestly inducing delivery of property), 417 (cheating), 120 (B) (criminal conspiracy) and 34 (common intention) of IPC against Maple’s CMD Sachin Agarwal, MD Navin Agarwal, Sales Manager Priyanka Agarwal and other officials.

The alleged misleading advertisements gave an impression that the ‘Maharashtra Housing Scheme’ project was a part of Pradhan Mantri Aawas Yojana. However, the state government has clarified that Maple Group’s project was in any way linked with the Central or state government housing schemes.

The Group, through the adverts, tried to cheat people into buying apartments at Rs 5 lakh and collected non refundable amount. Maharashtra Housing and Area Development Authority (MHADA) and Mission Director of Pradhan Mantri Awas Yojana (PMAY) have slapped a notice to the group asking them to withdraw the controversial advertisements, stop collection of money and refund the amounts collected immediately.

Indian property market

In 2015, festive season or special Diwali celebration session in Mumbai comes with many surprise gifts from PM Narendra Modi as he relaxed the norms and regulations for foreign investment in Indian real estate sector. This year home buyers are discouraged by the rumors that real estate builders are unlikely to run out of money.

Since the opening of the market, government restrictions was preventing the global investors from putting their money in small and mid size construction projects, whereas; for global investors it was also tuff to make the exits of their money, but this festive season Indian government settles all restrictions with a stroke of a pen. Now global investors can invest their money even in completed commercial property projects as earlier they were not allowed to do that. After new rules some imported brands will be able to set up their own stores and in that Indian shopping malls will be proved as more valuable assets in near future. If like this PM Modi is going to respond every time after losing elections, so investors will gladly wish him more defeats.

Cash strapping Indian real estate developers aren’t complaining about the investment policies and foreign investment regulation, which announced at the evening of Tuesday. Now Indian real estate developers can redevelop small projects with more luxury and facilities at the centre of the city with foreign equity. In past due to rumors that Indian real estate builders are unlikely to run out of money, many home buyers get discouraged from investing in the market. In present, purchasers have no idea that when they will get the possession, however in top six cities there are more than 70% of unsold homes which are getting delayed by east 18 to 24 months for completion due to lack of funds, as per the reports of Rising Straits Capital Management, a private equity firm located at Singapore and has invested $1 billion in focused Indian real estate and infrastructure sector.

However; it’s clear that access to foreign money will not repair the financial foundations of builders because intolerably high cost of capital is meaningless until the domestic banking system becomes more confident about lending money to Indian builders. But it is expected that this new investment policy will at least stem further rot. Liquid, income generating real estate sector is ready to attract new foreign investment because of family offices of wealthy NRIs. However; in India US and Australian property projects are offering return of 14 to 15 per cent, but still its hard to get real estate funds in less develop Indian market at least then when annual depreciation in of rupee is about 5 to 6 per cent. It is expected that in coming year’s Indian property market will emerge as a viable asset class for global investors. Whereas; real estate investment trusts can speed up the process of construction in India.

Indiabulls Housing Finance

OakNorth, which is a London lender now aims to challenge the dominance of other large global finance companies such as; HSBC, Barclays, Lloyds and Royal Bank of Scotland in India.  Now India is prime destination for investors and it is emerging in as the world’s largest financial centre. Indiabulls Housing Finance, one of the Indian corporate houses is ready to acquire a large stake in a London based foreign bank, OakNorth. According to sources, Indiabulls Housing Finance is buying 39.8 per cent stake in UK’s OakNorth Bank for $ 100 million.

Sameer Ghelot, Chairman of Indianbulls group is also planning to acquire 10 per cent stake in the same bank through his personal capital with same valuation. This deal is one of the largest deal among several other Indo-British deals and it is expected that deal will be signed on Thursday when PM Narendra Modi will meet the British PM David Cameron in London. The National Housing Bank (of India), the Reserve Bank of India and Prudential Regulation Authority of the Bank of England have approved this investment. First time in history these regulatory approval authorities are ready to approve such a big stake to any Indian corporate into a foreign bank, as per company statement. After this deal Indiabulls group will be the largest shareholder in the OakNorth Bank. However; still company has an option to increase its stake in the bank in near future, as per company sources.

About OakNorth Bank:

OakNorth Bank is London based largest non-bank lender active in SME segment with outstanding SME loan assets of over $2.3 billion and loan disbursals to these companies at over $5 billion, as per company sources. In UK, OakNorth Bank is focusing on the structurally under-served SME sector and now at this point of time Indiabulls with a decade-plus experience in lending at same sector in India is ready to take benefit from resources and market skills of OakNorth Bank as Indiabulls has an extensive credit processes based on cash flows. However; on the same time OakNorth Bank will also take benefit from Indiabulls’ experience as it is one of the largest lender in small business, especially with its LAP (Loan Against Property) products.

In 2013, Rishi Khosla a former adviser of India-born steel magnet Lakshmi Mittal was put the foundation of OakNorth Bank. During the phase of set up, OakNorth Bank had secured an investment and funding from a former member of Bank of England’s monetary policy committee. However; in present a former chairman of Financial Services Authority of the UK is on its board of directors. On the deal, Gehlot stated that with this investment, Indiabulls group total exposure in London will become shinier with excess of Rs 4,200 crores. Apart from this deal group’s real estate arm is engage in redeveloping the four projects in London, which is worth of total Rs 3,500 crore.

From the side of Indiabulls, this investment decision was led by a former deputy governor of RBI, MR. K C Chakrabarty as currently he is acting as an independent director on the Indiabulls board now.

Lucrative offers- Combo of residential apartment

If you think that it’s impossible to own apartment in low cost or get job in the city like Mumbai, so this time you are wrong because now real estate builders are making an unusual promises as recently one of the Mumbai based real estate announced that his company is offering residential apartment in just 6.25 lakhs in Mumbai’s far outskirts with a helicopter joy ride and a job for one of the female member (from buyer’s family).

Karrm Infrastructure, which is famous for providing budget home in Mumbai, has promoting their latest project with lucrative offers on newspapers and on local radio. Their latest project is coming up at Shahapur, which is about 56 miles away in northwest of Mumbai. Karrm Infrastructure is offering residential units at seek 90 monthly payments of Rs. 7,000 rupees each and they are claiming that there are no hidden cost as well as project is as per the standard of “Vastu,” a local version of Chinese feng shui. It seems that company is seeking to tap the affordable market in Mumbai and that Cushman & Wakefield Inc. estimates has estimated the worth of company about $11.8 billion. According to Karrm, the low budget projects provides swimming pool, a hospital, school and a super market and apart from that the largest unit offered is about 202 square feet – all of one room, toilet and kitchenette.

In the metro cities like Mumbai, the demand for low-cost units is rising as PM Narendra Modi announced his “Housing for All by 2022″ scheme, however; builders prefer to construct high-end apartments in the cities like; Hyderabad, Mumbai, Delhi, but now they are struggling to clear the inventory pile-up of high-end apartments. According to Sanjay Dutt, Executive Managing Director of South Asia at Cushman & Wakefield, “Urban residential units has long been neglected in India because of certain reasons such as; high land prices, low margins in the segment and delays in getting approvals, but now with renewed focus from the state and central government, we are expecting that this segment will get proper momentum in near future”.

20 percent discount on full payment:

According to the statement of sales representative at Karrm Infrastructure’s office site, “All units will be ready in next two to three years and job offer for female member of the buyer’s family will be at food processing factory which is coming up at same region”. As per the statement of Shyamsundar Kamat, a Chauffeur in Central Mumbai, “This offer is not good enough because it’s too far from work location, and if he will buy Karrm’s units, so it could shave his five to six hours in day. The more he added that it doesn’t make sense for me because I can use my traveling time to do extra productive or non-productive work. Shahapur region is too far for those who are working in Mumbai. This is the true reality of land starved Mumbai, where the premium paid for a home near the work place is too high. But Ketan Patel, project Head at Karrm Infrastructure was not available in his Thane office and didn’t respond to requests seeking comments.

Building residential units for those who are from lower or middle class can make sense as it can help to boost the volumes in a real estate market as Indian real estate companies are struggling with the sales of residential units. In last quarter, the sales of residential units in India’s top eight property markets has fell by 4 per cent, however; the percentage of unsold inventory rose by 18 per cent, as per the research and data of Liases Foras, which estimates that it will take at least 45 to 50 months time to find potential buyers for unsold homes in Mumbai alone. It is expected that by the end of 2031, urban population in India will reach 600 million from 377 million in 2011 as per the estimation of central government, and there will be the shortage of 18.78 million residential units in urban housing segment. Now Central government is focusing on reducing squalor in modern cities and towns and due to that central government have shortlisted 305 cities and towns in nine major states of country to start building houses for affordable segment.

Smart Cities Mission

Last week, PM Narendra Modi, has unveiled the top three mega flagship urban schemes under smart cities mission with a aim to develop these cities with much higher growth rate than ever. While launching AMRUT (Atal Mission for Rejuvenation and Urban Transformation) and Smart Cities Mission, and Housing for All, he state that Urbanization should be viewed as the opportunity and urban centers should be viewed as growth engines.

However; experts from industry also welcome the decision and appreciate the PM in positive way. Ratan, a Leader from Government and Public Sector, PW India stated that Launch of Smart City Mission comes with a time where government, private and public sector is looking for the balanced growth with the combination of higher standards of living and creating the multiple resources in much efficient way. These ambitious projects need adequate capacity as well as innovative implementation solution in all over the cities at administration level. It could be the more positive step towards the construction of inclusive and sustainable inclusive urbanization story for India.

Details about Smart Cities Mission and AMRUT:

The AMRUT and Smart Cities Mission will draw Rs 50,000 crores and Rs 48,000 crores respectively as central grants for next three to five years. However; “Housing for all by 2022” mission will need the government expenditure of about Rs 3 lakh crores for the period of 5 to 7 years and it aimed to construct more than 2 crore affordable houses in urban region only for slum dwellers and these people who are falling under EWS (Economically Weaker Sections) and LIG (Lower income Groups). Under these housing schemes the interest subsidy will be 6.5 percent on the housing loan for the period of 15 years and it will be available for EWS and LIGs (it will provide them benefit of 2.3 lakhs). For AMRUT, more than 500 cities which have a population of 1 lakh or more will come under the project. However; on the major effect of these plans, Praveen Tyagi, CMD of VVIP states stated that the AMRUT plan will help in the urbanization of 500 cities whereas; the Smart Cities Mission will enhance the quality of life in particular cities and towns by developing the superior infrastructure for smart living through different features such as; green and much sustainable environment, less populated areas, better services at disposal and a clean and more. And Housing for all by 2022 scheme will act as the perfect catalyst as it is able to enhance the purchasing power of LIG and EWS by reducing the burden of loan interest rates.

Recently, PM emphasized on the new towns and cities which needs to witness the integrated infrastructural development. However; Anil Chaudhry, who is Country president & MD of Schneider Electric India stated that to support the growing population of our country and provide housing for all in different cities and town we need to have sustainable projects. In this aspect we need to have water management, transport facility, building management and energy efficiency for smart living and these factors will play an important role in the Government’s vision. Under  AMRUT scheme, 500 cities will get development and under Smart Cities Mission 100 cities will get development in next five years, however;  under the Housing for All scheme there will be construction of more than 2 crore houses in urban region in next seven years.

For infrastructure development, smart cities will get selected through competitions while 500 cities will be identified under AMRUT scheme.