Setback for Oberoi Realty as SC stays Sahara's Versova land development over environmental, valuation concerns

The Supreme Court has also asked stakeholders to seek guidance from real estate experts to extract maximum value of the land parcel in question

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26 Aug, 2025 12:21

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In a negative development for luxury real estate firm Oberoi Realty Ltd, the Supreme Court on Wednesday stayed the development of a key part of its business development plan, a 106-acre plot in Versova owned by the stressed conglomerate Sahara, owing to potential environmental concerns.

The court also ordered that the Rs 1,000 crore that Oberoi Realty had deposited with the court due to its interest in the project should be returned with interest.

A bench, led by Chief Justice of India Sanjiv Khanna, gave the Union Ministry of Environment, Forests, and Climate Change, as well as the government of Maharashtra, two weeks to inform the court as to whether the plot is partially or fully classified as a mangrove forest.

Any classification of that nature may attract restrictions of various forms, including a full construction ban, under Coastal Regulation Zone (CRZ) rules.

In trading on the National Stock Exchange on Thursday, Oberoi Realty's shares closed lower by 1 percent at Rs 1,623.90, having recovered from an early-morning low of Rs 1,565.45 per share. Owing to a broader market sell-off, as well as a mixed bag in terms of its Q3FY25 results as a result of slower sales and missed launches, the company's stock has been lower by more than 28 percent since the beginning of January.

Analysts, however, said that the market will eventually price in the development regarding the Sahara land, given the company's substantial pipeline of projects.

"The stock has flattened after a marked decline in early trading, which can be attributed to the market's tendency to take time to digest a new development. However, the market has now priced in the development, with the company having a significant pipeline going ahead," said a real estate sector analyst at a large Indian brokerage firm.

In order to realise more money to pay back depositors in the Sahara group of companies, the court also asked the stakeholders- Sahara and the Securities and Exchange Board of India (SEBI)- to seek guidance from real estate experts to increase the value that can be extracted from monetising the land parcel, whether it be through an outright sale or a joint venture. The liability on the Sahara group stands at around Rs 25,000 crore.

The Sahara group counsel, Kapil Sibal, told the Court that if the joint venture proposal went ahead, the group would be able to pay Rs 8,000 crore before the current deadline of 2025-end. However, Chief Justice Khanna observed that other bidders had also presented plans of substantial payment for the land, in exchange of an outright sale of the plot.

Oberoi Realty had proposed a joint venture agreement with the owner of the land, Sahara India Commercial Corp, as did Valor Estate (earlier known as DB Realty). In January, senior advocate Abhishek Manu Singhvi, appearing for Oberoi Realty, told the Supreme Court that developing the land over a 14 year period could land the Sahara group a sum of around Rs 21,000 crore.

Moneycontrol has reached out to Oberoi Realty seeking comment on the development, and the story will be updated once the responses are received.

In its Q3 earnings call, the company's chairman and managing director Vikas Oberoi, declined to discuss the Versova land matter, referring to the then-ongoing legal proceedings.