Sahara group sells Rs 1,211 cr worth Gurgaon land to M3M

As it tries to raise funds for securing release of chief Subrata Roy from Tihar jail, Sahara group today sold a big land parcel in Gurgaon near here for Rs 1,211 crore to realty firm M3M India Ltd.

The group is also believed to have clinched deals for sale of two more land parcels (one in Vasai, Mumbai and another in Jodhpur, Rajasthan) for over Rs 1,250 crore, while talks are in the final stages for sale of a Pune land tract.

An official announcement is yet to be made for these two deals. Announcing the Gurgaon deal, probably the biggest land transaction so far in 2014, M3M India said the 185 acres of land it bought would be used for 'mixed-use development' and has sales revenue potential of Rs 12,000 crore over the next 6-8 years. M3M India Director Pankaj Bansal said it is not a "distress sale" by Sahara.

He further said that the deal, subject to the Supreme Court's approval, was clinched two months ago as per the prevailing market price after M3M India was approached by Sahara group.

The entire amount of Rs 1,211 crore will be paid in installments over a period of six months, while post-dated cheques have been given to Sahara group for purchase of this land, situated at Chauma village in Gurgaon.

The deal announcement comes within days of Supreme Court permitting the Sahara Group to proceed with the sale of four domestic properties, which is likely to fetch Rs 2,710 crore, in its bid to raise Rs 10,000 crore for Roy's release.
Besides this Chauma land, the court has allowed Sahara to sell properties in Jodhpur, Pune and Vasai.

Sources said that the Vasai land is being sold for Rs 1,111 crore, while that in Jodhpur for another Rs 140 crore.

Out of the list of nine domestic properties submitted earlier to the court, Sahara has already sold its Ahmedabad property for Rs 411.8 crore, which has gone into Sebi account.

Roy, who was sent to jail on March 4 this year in a case involving alleged non-refund of over Rs 20,000 crore with interest to depositors, was asked by the court to pay Rs 10,000 crore to get bail, of which Rs 5,000 crore should be paid in cash and rest of the amount in bank guarantee.

While Sahara group claims to have directly refunded more than 93 per cent of the total amount to investors, it earlier raised Rs 3,117 crore and deposited the same with Sebi, followed by another amount of Rs 411.82 crore raised through sale of an Ahmedabad property.

Talking about the Gurgaon land deal, property consultant CBRE's South Asia CMD Anshuman Magazine said: "The value is fair because location is good."
Elaborating on the development plan, M3M India's Bansal said: "We will come up with a high-end mixed-use development project on this land comprising branded homes, service apartments, offices, retail, hotels and entertainment centres. We are expecting a sales revenue of Rs 12,000 crore from this project".

The company would be shortly applying for approvals to develop this project which is to be launched in the last quarter of 2015 and get completed in the next 6-8 years.
Asked about total investment on construction, Bansal said: "It is too premature to estimate but it will be about one-third of the estimated sales revenue."

On funding of this project, he said the company would fund the project cost largely from internal accruals, but said it is also exploring the possibility of partnering with international developers, financial institutions and private equity firms.

M3M India has 2,000 acres of land in and around Gurgaon. It is currently developing 14 projects in the city, including its flagship 75-acre project 'M3M Golf Estate'.
Delhi-NCR has witnessed many big-ticket land deals during the last eight years. Last year, Gaursons had bought 300 acres on Yamuna Expressway in Greater Noida from Jaypee Group for more than Rs 1,500 crore.

Wave Group's 151 acres deal in Noida for about Rs 6,500 crore in 2011 is the biggest land deal in the region.

India's largest realty firm DLF was also involved in two high-value land transactions. It had bagged a 350-acre plot for Rs 1,750 crore in Gurgaon in 2009 and another 38 acres in the heart of Delhi for Rs 1,675 crore in 2007.

Unitech had won 340 acres in Noida through auction for Rs 1,582 crore in 2006.
BPTP had bagged 95 acres of land in Noida for Rs 5,006 crore through an auction in 2008, but the deal fell through as the company was unable to make full payment.