New Delhi: Mill owner National Textile Corp. Ltd (NTC) plans to auction prime property spread over 150 acres of land in Mumbai, Kanpur and Indore, with the exercise kicking off next month.
“As the Indian realty market is reviving from the slump, there is need for more land to create housing,” state-run NTC’s chairman and managing director K. Ramachandran Pillai said at a seminar in the Capital on Wednesday.
“We plan to begin the process in April by placing notices in major national dailies,” Pillai said.
NTC, which has 25 mills in Mumbai alone, has raised Rs4,034.6 crore from the sale of mill assets, according to the latest report by the committee on public undertakings (Copu), a parliamentary panel. It sold five plots for Rs2,200 crore at the height of the property boom in 2005-06.
No minimum price has been set for the land that it plans to auction, Pillai said. “This depends on location and the market demand. But we would soon take a decision on this.”
Pillai hadn’t responded to queries for further details sent by email till the time of going to presss.
The committee’s report also said NTC got 180-350% higher than the base price from the sale of the five properties in Mumbai, primarily because of location and demand.
The next round of auctions in Mumbai may not provide as high a return, said Ashutosh Limaye, associate director, strategic consulting, Jones Lang LaSalle Meghraj, a property consultant.
“The developers are in no hurry to enter the Mumbai market this time, as it was seen in the previous auction,” he said. “Moreover, NTC mills are not the only ones available in the market for auction. There are other property owners who are willing to offload. Third, cash-starved developers will not be able to pay a higher price for the land.”
The land in the smaller towns may generate more demand.
“If the land in Kanpur and Indore are located in prime areas, developers will readily give better price,” he said. “Smaller cities are the next destination in terms of housing.”
NTC was incorporated in April 1968 with the main objective of managing the affairs of sick textile undertakings, eventually coming to control 119 mills through nine subsidiaries.
All the subsidiaries were declared sick by the end of year 2005 under the Sick Industrial Companies Act, 1985. The NTC board subsequently approved industrial and financial reconstruction programmes that included the closure of unviable mills.
According to these schemes, 77 mills were to be closed, 40 to be revived and two to be transferred to the Tamil Nadu government.
An assets sale committee was constituted for each subsidiary to take decisions regarding the sale of surplus assets. All the nine subsidiaries were merged with the holding company, thus making NTC a single company.