Unitech, a real estate developer in India, has seen prolonged periods of project stagnation with no progress on its 74 residential and twelve commercial projects, leaving 15,000 homebuyers waiting for over a decade. The company's troubles began when its promoters, the Chandras, became embroiled in the 2G scam in 2011. In 2020, a new board was appointed, but progress remains elusive. Unitech's financials have also suffered, with significant losses and almost no revenues. While the management is working to complete projects and raise funds, buyers continue to face uncertainty, delays, and financial stress. The situation remains complex and challenging.
For nearly four years, Unitech, a prominent property developer, has struggled to move ahead with its stalled projects, leaving homebuyers in a limbo. The company's problems stem from its involvement in the 2G scam in 2011, which led to a series of legal and financial challenges.
As of today, not a single Unitech project has resumed construction even after the appointment of new directors in 2020. These directors were approved by the Supreme Court in an effort to revitalize the company. However, the progress remains elusive, with approximately 74 residential and twelve commercial projects stuck, leaving 15,000 homebuyers anxiously awaiting possession of their properties.
In 2020, the board submitted a roadmap for project completion, proposing to finish construction within four years, necessitating an investment of 5,000 crore. Unitech's chairman and managing director, YS Malik, explained that significant delays were caused by various hurdles such as obtaining project management consultants' approval and renewing expired licenses.
The company's financial situation is dire, with losses increasing in Q4 FY 2023 and revenues declining significantly. Furthermore, Unitech's unsold inventory and land assets have proven challenging to sell, and the new board is exploring various avenues, including the SWAMIH Fund and financial institutions, to raise funds for project completion.
Unhappy tenants in some Unitech premises have complained about the lack of water supply and inadequate infrastructure. Some buyers have even resorted to distress sales i.e. selling significantly below the market prices.
Homebuyers have expressed their frustration with Unitech's unfulfilled promises and the expenditure on salaries for board members, without any progress on construction. Four board members resigned in the face of these challenges.
The current management's insistence on following legal procedures and financial transparency has not resolved the company's issues. YS Malik, Unitech's chairman, emphasized the complexity of the situation and the Supreme Court's critical role in guiding the company.
Despite the management's efforts to float tenders and secure contracts, the wait for buyers remains endless. Unitech's management aims to finalize tenders by March 2024, but until then, the fate of the company and its projects hangs in the balance.
The Unitech saga serves as a stark reminder of the challenges in India's real estate sector, where legal issues, financial difficulties, and complex projects can lead to prolonged delays and uncertainty for homebuyers.
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