The e-auction comes as a precursor to the government’s proposed disinvestment of India's national air carrier expected to be completed this year.
Air India’s auction of properties, including apartments and commercial space across major cities, starts on Thursday, with the debt-laden national carrier seeking to raise Rs 270 crore.
At least 28 properties of the airline will go under the hammer at 2 pm on July 8 and the e-bidding will close at 2:30 pm on July 9, according to details posted on the MSTC e-commerce website.
State-owned MSTC, which specialises in conducting e-auctions, is handling the online sale for Air India. Inspection of the properties was opened to the public on June 20 and will close today (July 7).
With COVID-19 restrictions being lifted gradually, the response has been good and several people have visited the sites and made phone enquiries, people aware of the matter told Moneycontrol.
“People are physically inspecting the property. They are confident that they would be getting a clear title and transparent pricing since they are buying from a government entity,” they said. “Only those who have registered on the website can participate in the e-auction for the particular property. That’s the process. It may take about 60 days for the process to be completed.”
Air India had, through an advertisement in national dailies on June 18, announced the e-auction of the properties – residential, commercial and plots – located across major cities as part of its asset monetisation plan amid the disinvestment process of the flag carrier.
The starting bid price of these units ranges from Rs 13.3 lakh to about Rs 150 crore and the airline is looking to raise a minimum of Rs 270 crore from the sale of all the properties, according to a tender document issued by the airline and reviewed by Moneycontrol.
The auction includes properties that were put on sale multiple times previously but failed to attract bidders. Air India has now lowered the reserve price of some of these properties, especially those in tier 1 cities, by about 10 percent from the previous auction to attract buyers, a senior airline official had told Moneycontrol, requesting anonymity.
The properties on offer include five flats at the Asian Games Village Complex in south Delhi and a 2,006 square metre residential plot in Pali Hill, Bandra, with a building that has 14 flats and a total built-up area of 2,030 sq. m.
The starting price for the duplex units in the Asian Games Village ranges from about Rs 4 crore to about Rs 9 crore, while for the plot in Bandra, it is Rs 150 crore. Also on the block are one three-bedroom unit and two two-bedroom units in Sachin da Strains, Gasdar Scheme in Santacruz, Mumbai, priced at between Rs 2 crore and Rs 4 crore.
Sources told Moneycontrol that over 50 people visited the Asian Games Village site and there were over 500 phone enquiries.
As many as 15 people inspected the Pali Hill, Bandra, property and 10 people visited the units located in Santacruz. “At least 50 people made phone enquiries,” sources said.
In rural Bengaluru, Air India is offering a 5,934 sq. m plot in Gangamuthanhalli Village of Devanahalli district priced at about Rs 4 crore. In Kolkata, four two-bedroom units in Sohini Apartments, Uday Shankar Sarani, Golf Greens, are on the block, each priced at about Rs 50 lakh.
In Maharashtra, Air India has listed a booking office and staff quarters in Town Centre in Bajipura, Aurangabad; six two-bedroom CIDCO flats in Swami Vivekanand Nagar, Nashik, and the booking office in Civil Lines, Nagpur.
The staff quarters in Aurangabad are priced between Rs 4 crore and Rs 5 crore, while the booking office is between Rs 20 crore and Rs 22 crore.
On offer in Gujarat are a 231 sq. m residential plot in Ghanshyam Nagar and Airlines House on Station Road in Bhuj.
A flat in Hoisala Diana Complex at Kadri in Mangalore and a residential plot at NCC Nagar, Peroorkkada, in Thiruvananthapuram are also part of the list. The plot in Thiruvananthapuram is priced at Rs 4 to Rs 5 crore.
The e-auction is a precursor to the government’s planned disinvestment of the national carrier expected to be completed this year.
A Mumbai-based real estate consultant said it may be a good idea to buy these properties because both their values and mortgage rates are reasonable. An e-auction such as this is a win-win for the seller and for the buyers, who would get a titled and ready property at a fair market value.
Prospective buyers should note that these are older properties and their valuation is reasonable compared with new developments in the neighbourhood, the consultant said. Also, there are no brokers and it is a direct transaction.
“While there may not be any fancy amenities, you will be getting what you are paying for. In short, prices are realistic compared to new properties in the same location,” the consultant said, adding that besides the price of the property, the buyer would have to pay stamp duty and registration charges and may also get a loan for residential properties.
On August 16, 2019, Air India had announced the auction of more than 60 real estate assets, including those it could not sell in April that year, when the carrier had put up 56 properties for sale.
The properties included 14 apartments at Mumbai’s Pali Hill, apartments at Mahim, Colaba and Bandra, apart from houses and flats in Kolkata, Nashik, Bengaluru, Lonavala, Hyderabad, Gwalior, Delhi, Amritsar and Bhuj. The reserve price of the units in 2019 ranged from Rs 15 lakh to about Rs 8 crore.