LIC Housing Finance Labels Agora City Centre as a Stressed Asset

VADODARA: LIC Housing Finance Ltd (LICHFL) has officially declared the Agora City Centre, situated on Mangal Pandey Road near VUDA Circle, as a stressed asset.

The housing finance giant has subsequently sold the project to an asset reconstruction company (ARC). Despite being envisioned as one of the most luxurious real estate projects in Vadodara, Agora City Centre has been plagued by controversies and challenges since its inception.

The project, developed by Manav Infrastructure under the Pradhan Mantri Awas Yojana (PMAY), was built on land that formerly housed the Sanjaynagar slums.

As part of the redevelopment, high-rise residential buildings were constructed on a portion of the land and allocated to the slum’s former residents. These homes were completed and handed over to the beneficiaries as planned.

The remaining land was set aside for Balaji City Centre, a grand mixed-use development comprising retail, commercial, and residential spaces.

It was also designed to include a high-end clubhouse and other luxurious facilities. Promoted as a unique project and the first of its kind in Vadodara, Balaji City Centre faced significant challenges and controversies from the very beginning.

One of the first allegations against the project was that it had been launched without the necessary permissions. Additionally, constructing a retaining wall within the Vishwamitri River’s boundary raised environmental concerns. Further complications arose over the project’s height, which led to the removal of certain floors.

The project came under scrutiny again after Vadodara Municipal Corporation (VMC) conducted investigations during floods and identified encroachments that were reportedly obstructing the river’s natural flow. This resulted in VMC demolishing the project’s clubhouse, further tarnishing its reputation.

The challenges deepened for Manav Infrastructure following the untimely death of its chairman, Ashish Shah, in 2022. Shah, who passed away due to dengue in Ahmedabad, was the driving force behind the company and the Agora City Centre project. His demise marked a significant setback for the project and its developers.

Amid these ongoing difficulties, LICHFL issued a notice last month, inviting agencies to take over the project’s stressed loan. According to the notice, the developers owed a total of ₹711.2 crore, prompting LICHFL to initiate the process of identifying an ARC to handle the loan.

In accordance with the Securities and Exchange Board of India (SEBI) guidelines, LICHFL disclosed the transaction in a recent statutory filing to stock exchanges.

The bidding process resulted in the identification of CFM Asset Reconstruction Private Ltd as the ARC to manage the stressed loan. CFM Asset Reconstruction paid ₹250 crore to LICHFL for the acquisition of the loan.

This development highlights the financial challenges surrounding the Agora City Centre project. With LICHFL officially transferring the loan, CFM Asset Reconstruction will now take charge of recovering the outstanding debt.

The declaration underscores the significant hurdles faced by this ambitious project and marks a critical step in addressing its financial woes.