Shares of real estate developers, housing finance companies and even banks with an exposure to the realty sector surged on Thursday after the government approved a relief fund amounting to 25,000 to complete held-up housing projects that could benefit 4.58 lakh homebuyers.

The government on Wednesday cleared a plan to infuse 10,000 crore in an alternative investment fund to revive stalled housing projects. The government will also rope in State Bank of India and Life Insurance Corporation to put another 15,000 crore into the fund.

Indiabulls Housing Finance Ltd rose as much as 15% in early deals today following the news, while state-owned construction company NBCC (India) Ltd gained more than 11%.

Among real estate developers, Indiabulls Real Estate Ltd climbed up nearly 5%, Sobha Ltd about 3%, Oberoi Realty Ltd 2%, The Phoenix Mills Ltd more than 2% and Godrej Properties Lt 0.5%.

IndusInd Bank Ltd, which has a significant exposure to the sector, was the top gainer among Nifty 50 companies, with shares rising more than 3% today. HDFC Ltd was also among the top five gainers and traded nearly 2% higher on the news.

Incomplete housing projects worth less than 2 crore per unit in Mumbai, 1.5 crore in other metros, including the national capital region (NCR), and 1 crore in other parts of the country will benefit from the decision, Finance Minister Nirmala Sitharaman said on Wednesday.

“The projects need to be registered in RERA (Real Estate Regulation and Development Act) and their net worth should be positive. Even if the project has been declared an NPA or dragged to NCLT but not asked for liquidation will also benefit," Sitharaman said.

The real estate sector is one of the worst hit due to the economic slowdown as property developers have been grappling with falling sales, piling inventory and lower prices amid shaky investor confidence and banks not willing to lend to the sector to complete unfinished projects fearing defaults.