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National Textiles Raises Estimate From Mumbai Land Sales to $1.9 Billion
India’s state-owned National Textiles Corp. raised its estimates for proceeds from land sales after it sold property last month for double the reserve price.
The unprofitable textile company expects to raise at least 90 billion rupees ($1.9 billion) from land sales in Mumbai, NTC Chairman K. Ramachandran Pillai said in an interview in Mumbai Sept. 3. Sales across India could be double an earlier estimate of 50 billion rupees in the year to March 31, he said.
“I think there is appetite,” Pillai said. “The fact that there were seven bidders for our sale last month shows the demand. Even if we get 1.8 billion rupees per acre and multiply it by 50 acres, that should be achievable.”
NTC sold 10.77 acres in the central Mumbai area of Worli in two auctions, raising 19.8 billion rupees. A unit of Indiabulls Real Estate Ltd. bought both plots of land paying about double the reserve price set by the textile maker.
The textile maker may auction more plots in central Mumbai next month after securing approval from the state government to parcel together land with defunct mills under the so-called Integrated Development Scheme, Pillai said.
According to the development control regulations of the Mumbai region, owners of defunct mills wanting to sell their properties must give one-third of the open space to house mill workers and another one-third to the local municipal authority to develop gardens and green zones.
Sales Recover
Land sales in Mumbai, Asia’s third-most expensive office market, have risen this year after a lull over the past couple of years. The Mumbai Metropolitan Region Development Authority sold land in the central Wadala neighborhood for $849 million in May, its first successful auction in almost two years.
Mumbai, a city of about 18 million people, ranks behind Hong Kong and Tokyo as the third-most expensive office location in Asia, according to a survey by Los Angeles-based CB Richard Ellis Group Inc.
NTC, which received 60 billion rupees from selling land in the country in the past five years, raised 2 billion rupees in the year ended March 31, and 19.79 billion rupees so far this year, Pillai said. The company is currently in the process of selling mills in Indore and Bangalore, Pillai said.
The textile maker with 1,200 acres of land across India for sale expects to fetch about 600 million rupees from the auction of a 16-acre plot in the central Indian city of Indore and a similar amount from a 1.73 acre plot in Bangalore, Pillai said. The auctions for both plots should commence in the third week of October, he said.
NTC is exploring the option of jointly developing its largest mill, the 12-acre India United Mills No. 6, and may build an iconic construction on this plot, Pillai said.
“The government wants four acres of the mill land to build a university,” Pillai said. “We should reach a final settlement with the government of Maharashtra this fiscal year.”
To contact the reporter on this story: Pooja Thakur in Mumbai at pthakur@bloomberg.net
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