Bangalore: Making an exception to auction norms, the National Textile Corp. Ltd (NTC) may sell its 10.5-acre Finlay Mill in central Mumbai at less than the reserve price of Rs710 crore.
Only two bidders participated in the third attempt to sell the defunct textile mill on Thursday. The highest bid by Padmavati Buildtech and Farms Pvt. Ltd, a 100% special purpose vehicle floated by Mumbai developer Lodha Group, was at Rs657 crore. The other bidder, Angina Properties Ltd, a part of Indiabulls Real Estate Ltd, bid Rs520 crore.
“The bid amount is decent considering the market conditions. Though usually we don’t sell at lower than the base price, in this case the asset sale committee will take a final decision on 22 July,” said K. Ramachandran Pillai, chairman and managing director of NTC. In case the committee decides not to hand over the mill to the highest bidder, another auction will be conducted.
Few takers: National Textile Corp.’s Finlay Mill in Mumbai. The 10.5-acre mill might be sold at less than Rs710 crore. Kunal Patil / Hindustan Times
Banking on the gradual revival of the real estate market, NTC, soon after Finlay’s fate is decided next week, wants to kick off the sale of Kohinoor 1 and 2, two mills in Dadar, central Mumbai, spread across 16.8 acres.
Considering that property prices have dropped nearly 25-35% in most markets, the bid for the Finlay plot at Rs14,521 per sq. ft is only a bit less than the sale price of Kohinoor Mill No. 3 at Rs19,694 per sq. ft in 2005 during the property boom.
NTC first tried to sell Finlay last December at a minimum Rs1,066 crore. Nine Paradise Hotels Pvt. Ltd, part of realty firm Dynamix Balwas Group, bid at Rs450 crore, and the auction was called off. In March, NTC put a price of Rs708 crore and tried to sell it. Tamil Nadu’s Christy Textile Products Pvt. Ltd was the sole bidder, but was disqualified because it failed to put up the Rs100 crore mandatory earnest money deposit.
In 2005, NTC started selling its mills, mostly spread across central Mumbai. The auctions not only saw the country’s largest developers such as DLF Ltd and Indiabulls lapping up prime pieces of land in Mumbai, but also triggered a price boom across the country. In one mill sale, DLF bought the 17-acre Mumbai Textile Mill for Rs702 crore.
“NTC should just grab the opportunity and hand it over to the highest bidder. It’s a very good price and another auction means waiting for at least three-five months,” said Akshaya Kumar, chief executive officer of Park Lane Property Advisors, a property consultancy.
Abhisheck Lodha, director of Lodha Group, said he is hopeful that the property will be handed over to his firm. “Our sales have done reasonably well in the past few months, particularly in our high-end properties in central Mumbai such as Lodha Grande and have little supply left. That’s why we decided to bid.” The developer plans to build luxury apartments in one part of the mill and is exploring development options in the rest of it.