Realty stocks closed the session with strong gains on Thursday with the Nifty Realty index hitting its highest level in the last one year, after the country’s largest lender State Bank of India (SBI) launched the Residential Builder Finance with Buyer Guarantee (RBBG) scheme to boost sales in the housing segment.
The Nifty Realty Index closed the day higher by 2.7% after climbing as much as 2.9% at the highest point of the day. All the constituents of the index closed in the green. The index has jumped over 21% in the last three months compared with a 7.5% rise in the Nifty 50 index during the same period.
The biggest gainer on Thursday was Sunteck Realty Ltd, which surged 6.5% after it announced that it was the first one to enter into an agreement with SBI for the RBBG scheme for three projects to be constructed in the Mumbai Metropolitan Region.
Other gainers included DLF Ltd (up 4.5%), Indiabulls Real Estate Ltd (4.7%), Phoenix Ltd (up 2.1%), Oberoi Realty Ltd (up 1.5%) and Sobha Ltd (up 1.4%).
The RBBG scheme aims to safeguard the interest of homebuyers by financially protecting them from a situation where their money gets stuck in unfinished stalled projects. This has been a common issue crippling the real estate sector of late due to the liquidity crunch faced by developers. “This product has huge implication on real estate industry and homebuyers. It will improve the velocity of sales,” said Rajnish Kumar, chairman at SBI, during the launch of the scheme.
RBBG will focus on affordable housing segment with home price of up to Rs 2.5 crore in seven Indian geographies initially. Under the scheme, all reputed builders fulfilling the prescribed criteria by the bank, including Star rating and Cibil score, can also avail loan between Rs 50 crore and Rs 400 crore, SBI said in a statement.