The Lenders to the Jaypee group infratech are angry because they believe that IDBI bank mishandled or ignored ways through which the situations could be solved and now the cash crunch holds up to 32,000 houses for completion which has been creating inconvenience for a lot of people.
Along with the accusation that the bank blocked a lot of investors that could’ve helped improve the situation. Jaypee’s financial situation has been dire since 2016, when it got into an immense debt of 841 crore while it had a revenue of 966 crore. Jaypee has other lenders, including ICICI Bank, SBI and IIFCL. There were a number of proposals from investors that were turned down by IDBI, the first coming from, World Bank that was proposing a loan of 2000 crore but expected a 16% in returns, which was refused because IDBI calculated that the returns should be 20%.
IDBI also botched another investment from Yes bank, who were willing to donate 1000 crore, but they were also affiliated with Jaypee hospitals and a portion of the money would be going to them, and IDBI couldn’t agree to this donation.
Bankers have said that they weren’t able to follow through with any deals because none of them fit with their agreements and that it was difficult to agree some of them because the amount was very low and couldn’t cover the costs.