Realty firm Nirmal Lifestyle enters bankruptcy for default on Altico Capital\'s loans
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Mumbai-based real estate development firm Nirmal Lifestyle Ltd has been admitted for bankruptcy on a plea filed by IDBI Trusteeship Services, on behalf of Altico Capital, for a default of Rs 286 crore.  

A Mumbai bench of the National Company Law Tribunal (NCLT) has also appointed Ajit Gyanchand Jain as its interim resolution professional (IRP) to run the company’s day-to-day affairs, according to an order released by the tribunal. 

The IRP will now call out all creditors to list their total claims due from the realtor. 

The dedicated bankruptcy tribunal, in the order dated August 5, said that Nirmal Lifestyle had approached Altico Capital to get refinancing facilities of about Rs 300 crore through Non-Convertible Debentures (NCDs).  

In September 2016, Nirmal Group had raised Rs 500 crore ($75 million) from non-banking financial company (NBFC) Altico Capital India Pvt. Ltd, in what was one of the largest financing transactions in the residential real estate segment in that period.  

The funding was taken to pare debt and finish construction of three residential projects in Mumbai.  

The real estate builder had also availed a term loan of Rs 1,120 crore from Altico and had issued a guarantee in relation to the term loan of Rs 1,280 crore by another affiliate firm Nirmal Lifestyle Holdings on March 27, 2019. The company defaulted on this guarantee around September 2019. 

In the order, Nirmal Lifestyle’s counsel also mentioned that the company is in the process of settling the claims of all creditors and some time may be granted.   

With the admission, the order further said, “This bench hereby prohibits...transferring, encumbering, alienating or disposing of by the corporate debtor (Nirmal Lifestyle) any of its assets or any legal right or beneficial interest therein; any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property.”  

Nirmal Lifestyle Ltd. is a real estate development company founded in 1975 and deals in residential and commercial spaces in the suburban areas of Mulund and Thane in Mumbai. It operates as a subsidiary of Nirmal Lifestyle Holding Pvt. Ltd.  

In December 2016, VCCircle had reported that a Debt Recovery Tribunal (DRT) had directed Dharmesh Jain, managing director at Nirmal Group, not to sell his properties as his firm owed dues to subscribers of NCDs. IDBI Trusteeship, on behalf of its clients, had filed a case to recover around Rs 377 crore. 

The clients were Kotak Investments, INQ Holding and Equity Trust (Jersey) Ltd, which subscribed to the NCD issue in 2014. Jain was a guarantor to his realty company Nirmal Lifestyle Developers for the NCDs.  

In 2017, the privately-held developer had also secured debt funding of Rs 570 crore ($89 million) from L&T Finance Ltd, the non-banking finance arm of engineering giant Larsen & Toubro Ltd, for a residential project.

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