Emerges as the highest bidder, beats Lodhas by Rs 2 crore
Indiabulls Infratech today won the bid for the 8.37-acre National Textile Corporation (NTC) Bharat Mill land in central Mumbai for a whopping Rs 1,505 crore. It emerged as the highest bidder beating its nearest rival — the Lodhas — by Rs 2 crore. The bid amount was almost double of the Rs 750 crore reserve price.
This is Indiabulls’ second winning bid in less than a week. On Saturday, Indiabulls Infraestate had bagged NTC’s 2.3 acre Poddar Mill land in Mumbai for Rs 474 crore. The reserve price was Rs 250 crore. This signals a strong revival of the real estate market in this region.
The public sector company is selling land of defunct textile units to raise resources for the revival of 21 mills that are potentially viable. It has already started modernisation in 18 of its mills, while the remaining three will foray into unexplored sectors like technical textiles.
“The deal is exorbitant if the developer gets only permissible 1.33 FSI (floor space index), but if they get parking or hotel FSI (4 or 5) it is not that expensive. It all depends on what they want to do there,” said Akshaya Kumar, chief executive of Park Lane Advisors, a property consultant.
At the normal FSI of 1.33, the deal works out be Rs 31,298 per sq ft. (43,560 sq ft x 8.3x1.33), while at 5 it works out to be Rs 8,325 a sq ft. Home prices in Worli area command Rs 20,000 to Rs 30,000 a sq ft.
“Only with the hopes of getting a higher FSI, developers are quoting higher prices,” Kumar said.
More From This Section
Mumbai has seen a flurry of land deals in the last couple of months. Recently, property developer Sheth Developers bought an 18-acre plot of Borosil Glass Works in Marol area of Mumbai for Rs 875 crore. Early this year, the Lodha group won MMRDA’s 6 acre land for Rs 4,050 crore.
NTC is looking at raising resources of around Rs 8,000 crore through the sale of around 55 acres of surplus land primarily in upmarket locations in Mumbai this financial year. Given the success of the first two auctions, the projection is likely to be a conservative estimate.
The next plot in Mumbai is expected to be auctioned in September, while in the next 10 days two plots of 1.73 acre and 16 acres in Bangalore and Indore, respectively, will be auctioned.
| BIG-TICKET LAND DEALS | ||
| Buyer | Seller | In Rs cr |
| Lodha | MMRDA | 4,050 |
| Indiabulls | NTC | 1,505 |
| Wadhwa | RIL | 1,000 |
| Sheth | Borosil | 875 |
| Wadhwa | Hindustan Composite | 571 |
“The auction has been hugely successful and the bids have doubled than what we had expected,” said NTC Chairman K Ramachandran Pillai.
Last week, Union Minister for Textiles Dayanidhi Maran had inaugurated the e-auction of the NTC land — the first ever in the real estate sector. Maran had, in 2009, stopped the auction of plots by NTC citing that the market prices have dampened due to the global downturn.
NTC, which has been selling lands of defunct mills to turn profitable since March 2005, has fetched around Rs 4,000 crore till date by selling 26 properties in Mumbai and other cities. The money is being used for modernisation and capacity building of sick mills. It is also diversifying into new products and strengthening its retail plans.