MUMBAI: ICICI Bank is auctioning a prime property of tyre manufacturer Dunlop India spread over an acre on the upscale Annie Besant Road in Mumbai to recover loans to Ruia Group companies, two people with knowledge of the development said.
The bank took over the property‘s possession after Bhartiya Hotels, Shalini Properties & Developers and SPR Resorts defaulted on a Rs 575-crore loan given in 2008. The loan was taken by mortgaging the property owned by Dunlop India, another company of the Kolkata-based Ruia Group.
It initiated the auction process in the first week of April and the reserve price is Rs 240 crore, the people said. The landmark property is set to go under the hammer this month as the lender has set May 16 as the deadline for receiving bids.
ICICI Bank and Dunlop didn’t respond to emails seeking comment until press time on Monday. Transaction adviser JLL India declined to comment.
The Ruia Group, led by Pawan Kumar Ruia, took control of this property that comprises a four storey building in 2005 after it acquired Dunlop India from the Chhabria family. The property, with a built-up area of 41,000 sq ft, currently has no tenants. According to property consultants, the land in the Worli area holds good development potential.
However, the response to the auction will depend largely on the current property market scenario and policy-related factors. Given the current development plan for the area, the land has a total development potential of more than 1 lakh sq ft. With the new impending development plan for Mumbai city, the potential can increase by around 30% or more, experts said.
Current residential property rates in the locality are in the range of Rs 80,000-85,000 per sq ft on a built-up basis. The four-storey building, located near Podar Hospital and opposite the Worli police station, had hit the market on several occasions.
However, lukewarm response due to the bank loan came in the way of a final transaction. About four years ago, when Dunlop India tried to sell the property, it was looking for a price of Rs 400 crore.
Credits ET Realty