Merrill Lynch Capital Markets Espana SA SV has acquired as much as 11.63 lakh equity shares representing 1.03% stake in Ansal Properties through secondary market purchase route. Prior to this transaction the foreign fund house had 4.94% stake, which got increased to 5.96% after the acquisition of the 1.03% stake in the company.

Calculated on the basis on the closing share price of Ansal Properties, the deal value amounts to about twelve crore rupees. The company had said that it would invest thirty-six hundred crore rupees for developing two hundred seventy acres IT SEZ and parks in the country. The proposed SEZ would consist of an IT zone, commercial zone, residential zone and a recreational area. Shares of the company closed at Rs 101.60, down 4.38% on the BSE.

Prices have come down by up to 25% in Mumbai’s distant suburbs, including Thane and Belapur, and pockets of Hyderabad and Bangalore, according to property consultancy firm Knight Frank India. Prices in the NCR, with an exception of Faridabad and Delhi, too have witnessed a correction of up to 25%. Land prices in Faridabad have risen 10-30% in the past 3-4 months.

However, Faridabad is just catching up with its neighbouring locations. The prices in Faridabad are still lower than in Gurgaon or Noida and the current price rise is more towards building a parity with them. Land prices in Delhi are said to be stable.

But a recent land deal struck in Delhi’s prime commercial centre Connaught Place indicates that prices in the capital too are cooling off. Parsvnath Developers bought 1.18 acre, jointly owned by Mahajan Industries and Videocon Industries, for Rs 200 crore. The deal came at a discount of almost 17% at Rs 169 crore per acre, compared to what hotel major Leela Group paid for acquiring 3 acres in Chanakyapuri last year for Rs 611 crore.

Mr.Vipin Aggarwal, Executive director, Omaxe, says “Real estate sector is facing a major cash crunch. That’s why the companies are focusing on completing the project at hand, instead of adding to their landbanks”.

Till recently, real estate players were in land acquisition frenzy, with some players even pledging their equity shares to acquire land. A large landbank was showcased as the biggest asset for a company tapping the capital market

The purchase consideration for residential immovable property should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE or FCNR accounts maintained with banks in India.

Foreign citizens of Indian origin needed to file a declaration in Form IPI 7 with the Central Office of Reserve Bank, Mumbai within 90 days from the date of purchase of immovable property, or final payment of purchase consideration. They will also need a certified copy of the document for the proof of transaction and a bank certificate regarding the consideration paid. Such property can be sold without the permission of Reserve Bank. If foreign citizen of Indian origin purchases the property, funds towards the purchase consideration should either be remitted to India or paid out of balances in NRE or FCNR accounts. Reserve Bank considers applications for repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for the acquisition of the property for two such properties, purchased on or after 26^th May 1993. The balance amount of sale proceeds or sale proceeds in respect of properties purchased prior to 26th May 1993 will have to be credited to the ordinary non-resident rupee account of the owner of the property.

As far as the matter of repatriation is concerned, applications for repatriation of sale proceeds are considered provided the sale takes place after three years from the date of final purchase deed or from the date of payment of final installment of consideration amount, whichever is later. Applications for necessary permission for remittance of sale proceeds should be made in Form IPI 8 to the Central Office of Reserve Bank at Mumbai within 90 days of the sale of the property.

Reserve Bank has granted general permission to foreign citizens of Indian origin to attain or dispose of properties up to two houses by way of gift from a relative or to a relative, who may be an Indian citizen or a person of Indian origin whether resident in India or not, subject to compliance with applicable tax laws. Immovable property held in India can also be transferred by way of gift to registered charitable trusts or organizations in India. General permission has been granted by Reserve Bank to non-resident persons of Indian origin regarding this. Foreign citizens of Indian origin can acquire commercial properties in India. Under the general permission granted by the Reserve Bank, properties other than agricultural land, farm house, plantation property can be acquired by foreign citizens of Indian origin provided the purchase consideration is met either out of inward transfer of funds in foreign exchange through normal banking channels or out of funds from the purchasers’ NRE or FCNR accounts maintained with banks in India. A declaration is submitted to the Central Office of Reserve Bank in Form IPI 7 within a period of 90 days from the date of purchase of the property or final payment of purchase consideration.