Rs 1,065 cr expected, Rs 405 cr bid

As bids for the 10.5 acre land were opened on Friday, NTC officials were in for disappointment, as all four bidders quoted rates far below expectations. “We were expecting Rs 1,065 crore for the land,” said Ramachandran Pillai, chairman and managing director of NTC Ltd.

The highest bid of Rs 405 crore was made by Nine Paradise Hotels Private Limited (an associate of DB Realty). The other bidders included Parnee Developers (Satellite Group), RM Bhatter and Tata Realty and Infrastructure. The NTC will now invite tenders again a month later.

Since the first of NTC mill lands — the scarce parcels of large plots in prime areas of Mumbai — was put on the block four years ago, the plots had been drawing jaw-dropping bids. In fact, the mill land sales were cited as the prime reason for the price rise in Mumbai.

“Kohinoor Mills no 3 was sold in 2005 at Rs 15,000 a sq ft. In the last three years, there has been a significant change in rates. Still, the highest offer we got this time is not more than Rs 10,000 per sq ft,” said Pillai.

He said unlike the other NTC plots, in case of Finlay Mills, the developer could commercially exploit the entire plot without handing over two-thirds of the open space to BMC or MHADA. “In this plot, built up area is more, with very little open space available,” he explained.

Pillai added that the NTC will now review whether there is a need to restructure their reserve price, keeping in mind the 30% decrease in the real estate market rates.

Bidders, on the other hand, said the NTC never mentioned its reserve price in the tender document. A representative of Tata Realty said, “About Rs 150 crore that we have given as the Earnest Money Deposit (EMD) was not the reason (for the low bids). Had we known the reserve price, we would either have not bid at all or bid slightly higher. In today’s market, how can they expect this amount?” .

Ramesh Chandra, the officer-in-charge of NTC in Mumbai said, “As a policy, we never disclose our reserve price. As for the earnest money, we have already offered to return it immediately if the parties wanted it back.”

The NTC was planning to use the money from the sale of the land for revival of its sick units in Mumbai. NTC officials, however, ruled out any distress sale, saying NTC had enough reserve funds. Officials added that once Finlay Mill land is sold, they would invite tenders for selling the 13 acre Kohinoor Mills 1 & 2 at Dadar.