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Tata Steel sells 26 acres to Oberoi Realty for Rs 1,155 cr

Business Standard:  March, 2014

Mumbai: Oberoi Realty has emerged the highest bidder for the 25 acres of Tata Steel in Mumbai at Rs 1,155 crore, defeating the second highest bidder by Rs 5 crore.

While sources said the second-highest bidder could be Kalpataru or Lodha Group, this could not be confirmed.

Among others in the race were Tata Housing and Peninsula Land.

"The committee of independent directors appointed for the oversight and governance of the sale process by the Tata Steel board today (on Tuesday) declared Oberoi Realty as the highest bidder of the auction on the basis of their final bid of Rs 1,155 crore, after several rounds of bidding," Tata Steel told the stock exchanges.

Vikas Oberoi, chairman and managing director of Oberoi Realty, could not be reached for comments.

The reserve price was fixed at Rs 750 crore for the e-auction, which began at 11 am and went on till 7 pm, sources said. The auction was managed by global property consultant Knight Frank.

At a floor space index (FSI) of 4.7 million sq ft, it works out to Rs 2,455 a sq ft. However, including the payouts to government, the deal will be Rs 4,000 a sq ft, said a realty consultant.

FSI refers to permissible construction on a given plot.

Tata Steel had said the buyer should have started at least two million sq ft of construction in three years or completed more than two million sq ft in five years; and must have a net worth of more than Rs 100 crore.

The qualified bidder would need to make the initial offer by February 10, with a participation deposit of Rs 20 crore, it said.