Mahindra Lifespaces Developers, a leading realty firm, has finally got the consent of SEBI (Securities and Exchange Board Of India) for raising upto 300 crores rights issue. What is right issue working on is the principal of issuing shares to the existing shareholders at pre-decided price and ratio, as per their holding.

It was made mandatory for every firm to file draft papers with the capital markets regulator, SEBI, to launch any public offer. Hence, Mahindra Lifespaces Developers did the same to be able to raise funds through a rights issue for which SEBI has issued its observation now.
The revenue from the rights issue will be mainly used for the redemption of non-convertible debentures.

Apart from Mahindra Lifespaces Developers, three other firms – Intellect Design Arena, Vardhaman Special Steels, Zenotech Laboratories – have also filed the draft papers with SEBI for the approval to raise funds through the rights issue.

Market stability is assumed to be the reason for companies choosing for equity issuance to existing shareholders.

About Rights Issue?
For those who are not aware of what is rights issue – it is an issue of rights given to the existing shareholders of a company to buy additional shares from the company in proportion to their holding within a subscription period. This issue of rights is distributed by the company as a normal tax free dividend to all the shareholders in their formal records. They can be transferable also, allowing the shareholder of rights issue to sell them in the open market.

The central government has come out with a rental housing welfare scheme where Rs. 2,700 crores worth rent vouchers are to be given to the the urban poor in 100 smart cities.The urban people can have a sigh of relief as Narendra Modi’s government is all set to pay your rent.

The government is launching the new rental housing policy in which rent vouchers would be given to families that are below poverty line. This policy has been in the process for execution for past three years, but its first glimpse will be seen in the financial year 2017-18 in the smart cities.

The scheme is expected to cost around Rs. 2,713 crores per year. The main motive of the scheme is to provide support to the urban poor and the migrants.

The rent vouchers will be given to the local urban bodies to be distributed among the urban poor. The tenants have to give these vouchers to the landowners who will be able to redeem them at any citizen service bureau. And if the rent is more than the value of the voucher, the tenant will have to pay the difference in cash.

The value of the rent vouchers for urban poor may depend on the size of the domicile units and the current rates of rent. The government also has in mind, the concept of direct benefit transfer to be included in this scheme.

The rental housing welfare scheme voucher is likely to complement and support the “Housing for All” scheme by the prime minister. A recent provision in the Benami Properties Act states that the confiscated Benami properties will be monetized by the government, so that they can be let out as rental housing for LIG, MIG and Economically Weaker Sections (EWS).

A Cabinet would be prepared for the implementation of the rental voucher scheme.

According to India Ratings and Research, real estate sector will have to go for a structural change in the way it operates for its business. This has to be done to make it flourish again and reanimate itself in the market, and move towards a model which focuses on unit sales after the completion of the projects.

For 2017-18, the Ratings Agency has given a negative perspective on the real estate sector given the continuous downfall in the sales of residential properties. This will lead to negative cash-flows and will ultimately increase the debts making the credit profile of the real estate sector very unimpressive.

For these structural changes in real estate to be successful, adoption of single-window system is mandatory. This will also ensure survival and growth in the long term.

The sales of residential units have been witnessing a downfall since 2013-14 because of the shooting prices making it unaffordable for end consumers. Another reason is the continuous delays in the completion of projects, on the developers’ end. Both these reasons have made consumers lose their trust and confidence in the realty sector. The number of people buying residential units for investment purposes will also get severely affected because of demonetization, activeness of Benami Transactions Act and the restriction on the setting off the loss of rented units under other income heads.

This continuous fall in the sales of residential properties is expected to limit the liquidity which will also complemented with the real estate act becoming effective on 1st may, 2017. The sector depended highly on refinancing for the returning of debts, but the ratings agency suspects that refinancing will become tough if the sector also wants to revive itself.

As many companies become the victim of high currency note ban and are into process of selling their stakes, PNB too is heard to sell off its 7% stake in PNB Housing Finance. The state-run bank is not in a hurry to take its decision and the sale of the stake may take place in next fiscal year, i.e. starting from April 2017.

At present, the bank holds 39% of the total share with the Housing Finance while other firms including General Atlantic Singapore Fund Fii Pte, a private equity firm, and Government of Singapore holds 6.9% and 1.07% shares, respectively, with the mortgage lender.

Although, the bank has decided to sell off its stake to the firms, the amount or time has not been decided as yet. Moreover, PNB managing director Usha Ananthasubramanian also confirmed that the bank is looking towards the share in insurance joint venture with Metlife.

PNB Housing Finance was listed on exchange in November. It had delivered a net profit of Rs. 137.8 crore for the quarter through December which came out to be 53% more than the year before. By the end of the quarter, its gross NPA was calculated to be 0.37% of loan assets, as compared to 0.35%, a year earlier. The firm made it to the rise in total income to 41%, i.e. Rs. 998.7 Crore.

In addition to the selling of its stake, the Punjab National Bank is also looking forward to monetise its real estate assets.

Meanwhile, government has asked the bank to sell off their non-core assets in order to raise the capital regardless of their status caused due to bad loans.

Developers are now looking forward to launch mixed-used projects in order to buck up themselves in the current real estate situation.

As it is clear by the name, mixed-use development projects are a club of two or more classes of assets developed in a building. These different kinds of asset classes should be physically united, functionally complementary and mutually supportive of each other.
The motive and idea behind this lies in the fact of the interdependence and complementary nature of these asset classes, for instance, people going to office would prefer to stay close to their homes. Similarly, retailers would like to be in the vicinity of residential areas as it guarantees them more customers.

Various mixed-use development projects have already come up across different regions of the country whereas several others are under the planning-process by reputed developers.
Some of these prominent developers include Uppal Group which is planning mixed-use township on Dwarka expressway in name of Gurgaon 99, to be located in sector 99 of Gurgaon. While other developers such as DLF, M3M Group ad TDI Developers are also looking forward to come up with projects with same concept.

This concept will prove out to be efficacious if the layout is designed in such a way that there is an easy flow of various activities between asset classes at every point of time. For instance, there should be smooth movement of traffic, sufficient parking space and control over the noise issues.

Both the developers and buyers are will get benefitted immensely from these kinds of projects. Buyers will be benefitted as everything important to their day-to-day life will be within their proximity. They can travel down to office, their children can go to schools and play in parks, all this within the same township!

Similarly, developers will be at benefit as it’s a concept with very high returns and constant cash flow. Through this concept, the land is put to a flexible use. And most importantly, residential and commercial projects go hand-in-hand as they greatly benefit from each other.
These dynamic projects have become extremely popular across the globe as they look after all the needs and wants of the consumers. This has increased their demand and value, both socially and economically. With the growing trend of fast lifestyles that people are leading, this concept is sure to become the leader of real estate in the future.

This is because everybody would want all the necessities within their shortest reach possible!

Affordable houses in the National Capital Region are expected to witness an escalation in the near future because of the development of road infrastructure. The plan may include widening of NH-24 and completing the construction of eastern and western peripheral expressways.

Development in the roads connecting to cities like Rohtak, Meerut and other small neighbouring cities of NCR combined with the construction of various flyovers on NH-2 and NH-8 would further ignite the supply of affordable homes.

Primary impact of this move would be that a large amount of unused land will be within a reachable distance from the important parts of cities. The cost of land acquisition, thus, is expected to come down, which is considered as one of the biggest obstacles in construction of budget homes. Therefore, bringing these areas within easy reach of cities will ultimately lead to building of budget and affordable homes on a huge scale.

The NDA government had laid down certain policies in an organized manner in the last few years to give a spike to the affordable housing scheme. Budget 2017-18 has been one of the biggest support and push to the concept of affordable housing through tax incentives. The budget even supports the developers to look into and work on the projects of affordable housing.

For the success of affordable housing, central housing has taken certain steps –
It has placed policy measures like providing status of “infrastructure” to the segment of affordable housing.

The criteria for eligibility of tax benefits have been relaxed under section 80IBA.
Pradhan Mantri Awas Yojana (PMAY) will see an increased number of allocations.
If these undeveloped lands in the isolated areas, where the cost is comparatively very less, are brought to use for developing budget homes through infrastructure, the budget home segment can obtain a boost. Once the area starts developing slowly, the big and prominent developers are expected to enter the segment as the demand might increase and they might see an immense scope of growth.

The new policies and measures are expected to divert many reputed developers in the direction of budget and affordable homes.

A group of homebuyers, formed by the name “Fight for RERA” (Real Estate Regulatory Act), has demanded the government to declare 10th March as the Homebuyers’ Day. This is considered as a vital step in order to accentuate the powers and empowerment given to the homebuyers who have been suffering lately because of the developers.

A letter was written to the Union Minister for housing, M Venkaiah Naidu, asking him to fix this date to present certain awards to homebuyers or groups of homebuyers who have taken the initiative to look into the homebuyers’ troubles and fulfill their aspirations.

After a long time of 8 years, the much-awaited real estate (Regulation and Development) bill was passed on 10th March 2016. The bill went through various trials and miseries before it was finally approved by both the Houses of Parliament.

Initially this bill was introduced on August 14th, 2013 in Rajya Sabha by the UPA government. Later it was sent to the selected committee of Rajya Sabha, when BJP government came to power, on May 6th 2015.

In Rajya Sabha, the report by the committee was table on 30th July 2015 while receiving the Cabinet approval on December 9th, 2015. Finally, Real Estate (Regulation and Development) Act came into notification on 1st May, 2016.

Fight for RERA played a major in making way for the Real Estate Regulatory Act to become active.

Since the Real Estate Regulatory Act will completely come into power on 1st May 2017, therefore all the states need to notify general rules, agreement for sales rules and have to build the Real Estate Regulatory Authority by April 30th 2017.
Till now, only four states –Uttar Pradesh, Gujarat, Madhya Pradesh, Maharashtra and six union territories have been able to notify the rules.

This group for fight for RERA has also requested Prime Minister Narendra Modi, and Union Minister M Venkaiah Naidu to separate the Parliamentary Committee of the two houses on subordinate legislation. This should be done so that the states internally do not debilitate RERA and to let them know that the final rules, executions and decisions will always be within the reach of RERA.