MUMBAI: Real estate developer Hiranandani Group has emerged as the highest bidder for Hirco Plc's township in Chennai which was auctioned by the lender Housing Development Finance CorporationBSE -1.85 % earlier this month to recover its dues, said three persons familiar with the development.
The Mumbai-based developer has bid about Rs 600 crore for the Chennai property spread over nearly 158 acre in Kancheepuram on the outskirts of the city. The reserve price for the township was set at Rs 551 crore while its dues to HDFCBSE -1.85 % stood at Rs 539.86 crore.
"Although the deal is yet to be concluded, it is clear that Hiranandani will be taking over this property. Hiranandani is also expected to acquire Hirco's Panvel township being auctioned by respective lenders to recover their dues," said one of the persons, who did not wish to be identified. "Both properties are expected to go back to Hiranandani."
In response to an email query, an HDFC spokesman said, "The matter is sub judice. We will inform you at an appropriate time."
An email query to Hiranandani Group remained unanswered.
HDFC had initiated the auction of the properties of Hirco-owned Hiranandani Palace Gardens in Chennai and Panvel under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
Hiranandani Palace Gardens, which is developing two mega townships in Chennai and Panvel near Mumbai, had defaulted on its loan payments and the Panvel property is also being auctioned by the lenders.
Hirco's Panvel township spread over 588 acres is estimated to fetch about Rs 900 crore through the auction by its four lenders - LIC Housing FinanceBSE 1.98 %, Punjab National BankBSE 3.61 %, Andhra BankBSE 2.49 % and UCO BankBSE 3.41 %. The lenders, in a public notice, had set January 16 as the auction date and Rs 805 crore as a reserve price. However, the auction is yet to take place due to weak response, a bank official said.
According to a Hirco Plc's filing in March last year, progress on Chennai and Panvel projects continues to be modest and remains at least a decade away from completion. By December 2012, 1,689 of Chennai's 2,665 available residential units and 2,556 of Panvel's 2,968 available residential units had been sold, the report said.
Hiranandani, the erstwhile promoter of both townships, and Hirco Plc, which represents investors of these projects, have locked horns over these properties. Hirco had recently sought an explanation from Hiranandanis on distribution of revenue received through sales and missing funds.