Only two companies have bid for the Finlay Mills plot in Parel,Central Mumbai,both quoting less than the reserve price set by the National Textile Corporation (NTC). It marks the third time that the NTCs efforts at an auction have drawn a tepid response. The only bids for the 10.5-acre plot,opened on Thursday,were the Lodha Groups Rs 657.90 crore and Indiabulls Real Estates Rs 520 crore. The reserve price was Rs 701 crore and the NTCs assets sale committee will meet on July 22 to decide whether to go ahead with the transaction with the higher bidder. NTC chairman K Ramachandran Pillai,who heads the committee,admitted that the prices quoted were once again below expectations. We do not mention our reserve price as we want competitive market forces to bid. The bids are below our reserve price but not very low either, said Pillai. The committee would take all factors into account and take a decision,he said. The committee was formed in June 2002 to generate revenue for NTCs revival through the sale of surplus assets. If the committee decides to go ahead with the deal,the sale of an NTC plot in Mumbai at a price below the reserve will be a precedent of sorts. During the real-estate boom of 2005,NTC auctions had attracted staggering bids which,in turn,had led to the escalation of realty rates across Mumbai. Back then,both Indiabulls and Lodha Group had made aggressive bids,respectively,for Jupiter and Elphinstone Mill in Lower Parel and Apollo Mills in Chinchpokli. Abhishek Lodha,director of the Lodha Group,said that if the transaction goes ahead,his company plans to put the residential complex on the Finlay Mills plot to a mixed use. The economic slowdown had told on the NTCs earlier efforts to auction the plot. In December last year,with the reserve price set at Rs 1,050 crore,the highest bid was Rs 405 crore by Nine Paradise Hotels Private Limited (an associate of DB Realty). In February,with the reserve price down by 30 per cent,the NTC got only a feeble bid from the Tamil Nadu-based Christy Textile Product Pvt Ltd which failed to fork out the mandatory earnest money deposit of Rs 100 crore. Pillai said that irrespective of the market conditions,the NTC cannot put plot sales on hold for long. It is an ongoing process and we have to continue our efforts. Over the next couple of weeks,we will call tenders for yet another of our plots,Kohinoor Mills 1 at Dadar, he said. The NTC will go ahead with the second phase of mill land auctions,he said. Nine mills totalling nearly 100 hectares will be put on the block.
