Stock prices of companies owning textile mill land in Mumbai have shot up as much as 58 per cent since the beginning of this month, following the recent land auction by National Textile Corporation (NTC) here.
NTC sold two plots in central Mumbai — of Podar Mills and Bharat Mills — for nearly Rs 2,000 crore in the past fortnight to Mumbai-based Indiabulls group and this has improved the prospectus of mill companies with surplus land in Mumbai.
“Valuations of these lands have gone up after NTC auctioned its mill lands,” said D D Sharma, head of research at Anand Rathi Securities. “The textile companies were holding land at historical valuations and the latest valuations are high. The market is perceiving that when they develop lands, they can make good profits.”
NTC is planning to raise as much as Rs 8,000 crore by selling its mill lands in Mumbai for the modernisation of its 21 mills in the country. It has around 90 acres of land here.
| ‘YARN’STICK | |
| Company | Growth in stock price (%)* |
| Victoria Mills | 58.18 |
| Phoenix Mills | 10.97 |
| Bombay Dyeing | 8.53 |
| Century Textiles | 5.51 |
| Stanrose Mafatlal | 3.91 |
| *since August 2, 2010 | |
Companies such as Bombay Dyeing and Century Textiles are developing their properties in the Worli area of Mumbai. Phoenix Mills, which operates an upmarket shopping destination, High Street Phoenix, is developing a five-star hotel in the Lower Parel area.
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However, some analysts are expecting oversupply in the area where these companies have land. According to a recent report by Religare Capital Markets, the Lower Parel–Mahalaxmi–Jacob Circle belt is likely to see over 10 million sq ft of real estate launches in the next three-four years, making it an oversupply zone (not considering NTC mill land).
The brokerage said prices of new projects in this zone are likely to correct due to the excess availability, barring Worli, which in its view is better situated and has limited residential supply.