Bangalore: In a bid to become more transparent, National Textile Corp. Ltd (NTC) will sell its 2.5-acre Poddar Processors textile mill in Mumbai’s Worli area through an e-auction in June. NTC’s first attempt at selling a property online follows allegations that it has not been entirely transparent in its previous auctions. The firm expects to raise a minimum Rs250 crore from the e-auction.
In June, NTC will also sell its 8-acre Bharat Textile Mill in central Mumbai, but through a regular auction at a base or reserve price of Rs750 crore. The average sale price for just the land in the two properties is Rs21,000 per sq. ft. NTC’s previous attempts at a regular auction—for its Finlay Mill in central Mumbai—fell through twice over controversies about the reserve price. The matter is now in court.
With the e-auction, NTC wants to test a system that will allow all qualified bidders to track the process in real time. “We have decided to sell the smaller mill online first to see how it works,” said K. Ramachandran Pillai, chairman, NTC, adding that he isn’t sure if developers will like the idea. “I wouldn’t want to lose out on bidders because of this.”
The tender document for the e-auction will be issued early next week and bidders will be given a date and time for the bidding. Once the bidding is completed, the winner will be declared almost immediately. The auction will be conducted here.
“If NTC does a thorough pre-qualification of bidders to ensure only the serious ones are allowed, I think it’s a great way to conduct an auction when the market is on a rise,” said Akshaya Kumar, chief executive, Parklane Property Advisors Ltd.
Shahid Balwa, managing director of DB Realty Ltd, said he would be interested in buying a mill online. But another Mumbai-based developer, who had earlier bid for an NTC mill but didn’t win, isn’t sure if an e-auction can address all the problems that come up in large auctions. “These are large-ticket transactions and there are several issues that emerge during such auctions. We are not sure how NTC would resolve those online.”