MUMBAI: Steel major Tata Steel's 25-acre land parcel in Borivali suburb of Mumbai has fetched the highest bid of Rs1,155 crore in an e-auction concluded late Monday, said three persons familiar with the development. Realty majors Lodha Group, Oberoi RealtyBSE -2.96 %, Kalpataru Properties and Tata Group company Tata Housing Development Co were in the race to acquire the property. It is believed that Tata Housing has offered the highest bid. However, this could not be confirmed independently.
In an e-auction concluded on late Monday, the bids had started at Rs750 crore for the prime land parcel. The plot located near the western express highway and around 1 km from Borivali railway station earlier housed Tata SSL's steel wires manufacturing facility. The manufacturing unit was shut down in 2009 after the operations were shifted to Tarapur in 2008.
In terms of value, the Tata SteelBSE 1.39 % land transaction is among the largest one in recent years. In 2012, realty major Lodha Group had acquired a 17.5-acre land parcel at Lower Parel from DLF for Rs2,725 crore.
The buyer is estimated to get a total development potential of 2.5 million sq ft out of this prime land parcel and 4 million sq ft after obtaining permission for public car parking. Current residential property rates in Borivali are around Rs12,000 per sq ft. Tata Steel and transaction advisor property consultant Knight Frank India declined to comment for the story. Text messages and calls to Tata Housing Development Co's senior officials did not elicit any response until the time of going to the press.
Tata Housing is now expected to pay 10per centof the bid value as earnest money deposit within two days at the time of signing the Letter of Intent (LoI). The highest bidder is expected to pay the balance amount by April 28, following which two separate MoUs will be entered between Tata Steel and the developer.
As per the transaction terms, the developer is expected to obtain collector's permission for the sale of Sanad land forming part of the total property and a no-objection certificate from the labour authority. According to the bid documents, if the bidder is not able to obtain these approvals within three months, the MoUs will automatically stand cancelled and Tata Steel will forfeit the participation deposit and earnest money deposit.