Finance Minister Nirmala Sitharaman last week announced that stressed companies could avail additional credit of 20 percent of their dues under the Emergency Credit Line Guarantee Scheme 2.0 (ECLGS 2.0).

Indiabulls Housing Finance believes 5-6 percent of its portfolio would benefit from this announcement.

“Overall it is a very positive scheme. It will certainly benefit at least 5-6 percent of the overall portfolio and it will also make sure that a lot of projects which would otherwise be going slow, waiting for collections to happen via customers, they will get an additional line of funding and get completed quickly and thereby be able to sell the houses fast,” said Gagan Banga, VC & MD of Indiabulls Housing Finance in an interview to CNBC-TV18.

Banga further added that projects which were normal pre-COVID were eligible for extended credit line. “Companies which had loans regular prior to the lockdown and COVID pressure coming in, are the projects which are eligible. So it is not as if projects which were already under stress are going to get eligible. These projects have suffered in the initial phase of lockdown when there was no construction, there were no sale, and therefore the working capital got extended and this in that sense is coming as bridge towards meeting that working capital gap which got created for 4-5 months,” he said.

Banga also said that 99 percent of the builder loans are given by Indiabulls alone and almost all project loans are given SPV-wise.

(Edited by : Santosh Nair)