State-owned banks that lend to Jaypee Infratech will be able to recoup the funds next month. However, the Economic Times reported that 24,000 homeowners, term deposit owners and private lenders would have to wait until the bankruptcy court approves the settlement for the winning bidder, Suraksha Group.

This is due to the government-funded National Asset Reconstruction Corporation (NARCL) committing to acquire only Jaypee Infratech loans currently held by Public Sector Banks (PSBs).

Homebuyers, term deposit owners and private banks accounted for 62% of confirmed claims against struggling property developers.

Switzerland has launched a challenge auction in response to NARCL’s Rs 3,570 crore bid for Rs 9,234 crore of debt held by nine public sector lenders. Lenders led by IDBI Bank invited expressions of interest on October 10, and the auction is scheduled for October 27, according to tender documents sent to Asset Restructuring Corporation (ARC). NARCL will have the right to match winning bids and take over the debt.

In July 2021, Suraksha Group’s Resolution Plan was submitted to the Arbitral Tribunal for approval by Jaypee Infratech’s Interim Resolution Professional (IRP), Anuj Jain. Since then, the tribunal has postponed hearings in the case nearly 80 times, according to stock exchange filings. “The more than year-long judicial delay in getting the scheme approved shows the plight of home buyers who have waited more than ten years to own a home,” a real estate consultant told ET.

Under NARCL’s proposal, lenders would receive a 39% recovery rate. If all claimants were offered the same 39% recovery offer, NARCL’s offer would amount to Rs 9,345 crore. The IRP admitted the total claim amount of Rs 24,211 crore.

Lenders told ET that NARCL’s offer was attractive compared to the winning bidder. “We will receive 15% of the consideration amount up front, and we won’t have to wait for the court to approve the plan,” one lender said.