Shri. Jaiprakash Gaur, the founder of Jaypee Group, had a single-minded focus after graduating from IIT Roorkee with a diploma in civil engineering. He decided to contribute to nation-building by branching off as a civil contractor in 1958 and founded Jaypee Group. The Group’s business interests include engineering and construction, cement, power, real estate, expressways, fertilizer, hospitality, healthcare, sports, and information technology. This article covers the story behind Jaypee’s failure. How did Jaypee start, what all the good things it did, what exactly went wrong, and what is the future now? One thing is for sure, if everything would have gone well, Jaypee would have completely changed the situation in Noida. It could have become the DLF of Noida. But could not. More than 20000 buyers are still struggling to get the homes of their dreams. Let us look at the story behind the making of Jaypee.
Work done by Jaypee:
Jaypee Infratech was founded in 2007 and it is the part of the Jaypee Group. So, let’s look at some of the successful works done by Jaypee Infratech.
1. Yamuna Expressway project:
The Group entered into the construction of expressways with a 165 km access controlled 6 lane super expressway along the Yamuna River connecting Greater Noida and Agra. You would know how well-developed the Yamuna expressway is if you have been to it. It has become a big boon for Noida. Jaypee has also built the Zirakpur-Parwanoo Himalayan Expressway.
2. Jaypee’s Hotels and Resorts:
In New Delhi, Uttar Pradesh, and Uttarakhand, the hospitality division of the Group owns and manages five hotels.
3. Jaypee’s Hospital:
The Jaypee Hospital is well-developed and offers excellent health facilities. The hospital is now commissioning 525 beds in the first phase of its intended 1200-bedded tertiary care multi-specialty complex.
4. Jaypee’s F1 Sports:
The Group hosted the inaugural Formula One Grand Prix of India on October 30, 2011. The track is anticipated to hold more top-tier international racing competitions in addition to F1. Though this was unsuccessful as F1 races did not succeed in India.
5. Jaypee’s Real Estate:
The first real estate project of the group, Jaypee Greens Greater Noida, covers 452 acres. This distinguished municipality includes an 18-hole Greg Norman golf course, upscale homes, shopping centers, etc.
India’s First Wish Town, a premier township featuring an 18 + 9 Hole golf course, world-class residences, commercial developments, numerous entertainment amenities, and acres of greenery, was Jaypee Greens’ second project when it was unveiled in Noida in November 2007. The group then started construction on Jaypee Greens Sports City and Jaypee Greens Wish Town Agra, two townships along the Yamuna Expressway and Jewar International Airport, which is scheduled to open soon, and is a 20-minute drive from the city center.
But destiny was against Jaypee’s prosperity, and Jaypee’s fantasy township became a failure. So let’s talk about this township’s swindling and how many house buyers lost their dream homes.
Jaypee’s Failure in Real Estate:
Who doesn’t want to be the owner of their own home? All of us do. Not just any house, either. A perfect home must be spacious, well-connected to the rest of the city, have a room with a view, and have the best amenities. However, it has been more than 12 years since thousands of Jaypee Infratech Limited (JIL) home buyers in Noida were victims of the mother of all real estate failures in India. The long-drawn legal battles are ongoing, leaving more than 20,000 Jaypee home seekers running from pillar to post and many giving up.
Jaypee got the land of the wish town in return for building the Noida expressway for Rs 400 crores. The company launched 32000 flats, still, 70% of apartments are in the under-construction stage. This project did not show any signs of readiness for the completion date. Around 90% of buyers made their payment, but it was still claimed that progress has been made on this project, although there was nothing to show for it.
A total of 18,767 people paid a total of Rs.8,676 crores to the company. 1410 people received possession worth 528 crores with no registrations. 413 people canceled their booking and their refund of Rs 64 crores is still pending.
Reasons for the failure:
The reason behind the Real estate failure of Jaypee are:
- Jaypee group took the money that buyers had paid for homes and invested it in other projects.
- The company invested the money in other businesses.
- The government changed at that time.
Future of Jaypee’s Failure:
After a super-lengthy resolution process, Mumbai-based Suraksha realty group got the approval of financial creditors and home buyers to take over the company in June 2021. Furthermore, in its offer, Suraksha promised to deliver all Jaiprakash Associates’ pending housing units within 42 months. It has offered to pay Rs 125 crore upfront and infuse Rs 3,000 crore within 90 days for completing the stalled projects. It will also put Rs 300 crore receivable from Jaiprakash Associates for completing the pending housing unit. Since Jaypee was an extraordinary case, the finalization of the bids is pending before NCLT for more than 17 months for approval. After the approval, the 20,000 home buyers who have been waiting for their units in various housing projects of Jaypee can finally breathe a sigh of relief.