The state-owned National Textile Corporation (NTC) is in the process of undertaking the largest ever e-auction of land in the country, when its 8-acre plot in Mumbai’s prime Worli area goes under the hammer in the last week of July.
The PSU will also sell 2.5 acres in an adjacent plot at the same time. The reserve price for the plots has been fixed at Rs 750 crore and Rs 250 crore respectively, but if recent deals in the metropolis are anything to go by, the acution is likely to fetch far more.
“The credit for the idea to e-auction the land goes to Dayanidhi Maran (textiles minister), who wanted a process similar to the one followed during the telecom 3G auction,” said K. Ramachandran Pillai, chairman and managing director, NTC. “The auction will take place on the last three days of this month between 10 AM and 5 PM and an independent Ahmedabad-based service provider has been roped in to maintain transparency.”
The loss-making PSU, which is under the Board for Industrial and Financial Restructuring (BIFR), has been on a revival mode largely on the back of the capital it has raised since 2002 via sale of land and assets (see table). The company is looking to sell other mills in Mumbai and other parts of the country this year with an overall target of Rs 5,000 crore for 2010-11.
“We have plans to sell our defunct mills in Mumbai as also in Kanpur, Indore, Bangalore and Coimbatore this year,” Pillai said. “Put together, 40-45 acres of land will be sold and we are eyeing an average of around Rs 100 crore per acre.”
In June, the Maharashtra government had written to the textiles ministry offering Rs 750 crore for the Worli plot. It said Maharashtra Housing and Area Development Authority would build 5,000 affordable houses on the plot.
The PSU however rejected offer, saying it expected to raise much more than the reserve price, and inviting MHADA to participate in the auction.