Bidder raises concern over delays, transparency issues in IL&FS auction
ECONOMY & POLICY

Bidder raises concern over delays, transparency issues in IL&FS auction

Realty developer Nila Spaces, one of the bidders of Infrastructure Leasing & Financial Services? (IL&FS) commercial properties spread over 344,000 sq ft in an office tower GIFT TWO in Gujarat International Finance Tec-City (GIFT City) has raised concerns over transparency in the auction process and the delay to conclude the same.
The non-banking finance company listed these properties for sale in February, with the auction being conducted via the Swiss Challenge process. The properties are held by Sabarmati Capital Two Ltd (SCTL), a wholly owned subsidiary of IL&FS Township & Urban Assets Ltd (ITUAL).
The entire commercial tower has a total 540,000 sq ft space, of which some part was acquired by Infibeam Avenue in 2015. As per the Request for Proposals (RFP) released by IL&FS, Infibeam was allowed to match the highest bid to be received for these properties.
?We were informed verbally that Nila Spaces is the highest bidder and as per the RFP conditions, it was being forwarded to Infibeam for their right to match the highest offer. Subsequently on August 8, we received an official email from IL&FS informing us that our bid has been rejected without providing any valid reason and the furnished bank guarantee is being returned,? Deep Vadodaria, CEO, Nila Spaces, told ET.
IL&FS has stated the process has been conducted in a fair and transparent manner as per the RFP and any concerns in this regard are incorrect.?The bids for sale of Gift City 2 asset were invited under the Swiss challenge (with Infibeam being the original bidder) wherein the bidders from the public were asked to submit their bids as per the RFP. As per the provisions outlined in the RFP, Infibeam had the ?Right to Match? the highest bid received through this process, which they have matched," IL&FS said in response to ET?s query. Accordingly, the highest bid of Infibeam has now been taken to the Committee of Creditors (CoC) for their approval, which is underway. This will be followed by the laid down process of seeking (Retd) Justice D K Jain's and other applicable approvals. Meanwhile, the Earnest Margin Deposit (EMD)s of all unsuccessful bidders have been duly returned, the NBFC added.
A total of 58 commercial offices spread across 21 floors of the tower along with appurtenant car parking slots have been put on the block on an as-is-where-is basis as part of this auction. These properties include four offices spread over 1.15 lakh sq ft that are already leased to Tata Consultancy Services. SCTL was set up to develop commercial spaces in GIFT City and has built two towers with over 1.61 million sq ft total area. Of these, GIFT ONE has been operational since 2013, while GIFT TWO started operations in 2016.
GIFT TWO with a structure of a basement, ground floor and 28 upper floors holds 0.8 million sq ft. While the land belongs to GIFT City, the built-up area is held by subsidiaries of IL&FS. The land was leased to subsidiaries of IL&FS Group for a period of 99 years from 2013. IL&FS has been monetising its assets with an objective to manage debt obligations. The failure of IL&FS to meet repayment obligations in September 2018 had triggered a liquidity squeeze that gripped India?s non-banking finance sector.
As part of a clean-up, the government then replaced the IL&FS board, which has since been making efforts to resolve the debt situation.         

Realty developer Nila Spaces, one of the bidders of Infrastructure Leasing & Financial Services? (IL&FS) commercial properties spread over 344,000 sq ft in an office tower GIFT TWO in Gujarat International Finance Tec-City (GIFT City) has raised concerns over transparency in the auction process and the delay to conclude the same.The non-banking finance company listed these properties for sale in February, with the auction being conducted via the Swiss Challenge process. The properties are held by Sabarmati Capital Two Ltd (SCTL), a wholly owned subsidiary of IL&FS Township & Urban Assets Ltd (ITUAL).The entire commercial tower has a total 540,000 sq ft space, of which some part was acquired by Infibeam Avenue in 2015. As per the Request for Proposals (RFP) released by IL&FS, Infibeam was allowed to match the highest bid to be received for these properties.?We were informed verbally that Nila Spaces is the highest bidder and as per the RFP conditions, it was being forwarded to Infibeam for their right to match the highest offer. Subsequently on August 8, we received an official email from IL&FS informing us that our bid has been rejected without providing any valid reason and the furnished bank guarantee is being returned,? Deep Vadodaria, CEO, Nila Spaces, told ET.IL&FS has stated the process has been conducted in a fair and transparent manner as per the RFP and any concerns in this regard are incorrect.?The bids for sale of Gift City 2 asset were invited under the Swiss challenge (with Infibeam being the original bidder) wherein the bidders from the public were asked to submit their bids as per the RFP. As per the provisions outlined in the RFP, Infibeam had the ?Right to Match? the highest bid received through this process, which they have matched, IL&FS said in response to ET?s query. Accordingly, the highest bid of Infibeam has now been taken to the Committee of Creditors (CoC) for their approval, which is underway. This will be followed by the laid down process of seeking (Retd) Justice D K Jain's and other applicable approvals. Meanwhile, the Earnest Margin Deposit (EMD)s of all unsuccessful bidders have been duly returned, the NBFC added.A total of 58 commercial offices spread across 21 floors of the tower along with appurtenant car parking slots have been put on the block on an as-is-where-is basis as part of this auction. These properties include four offices spread over 1.15 lakh sq ft that are already leased to Tata Consultancy Services. SCTL was set up to develop commercial spaces in GIFT City and has built two towers with over 1.61 million sq ft total area. Of these, GIFT ONE has been operational since 2013, while GIFT TWO started operations in 2016.GIFT TWO with a structure of a basement, ground floor and 28 upper floors holds 0.8 million sq ft. While the land belongs to GIFT City, the built-up area is held by subsidiaries of IL&FS. The land was leased to subsidiaries of IL&FS Group for a period of 99 years from 2013. IL&FS has been monetising its assets with an objective to manage debt obligations. The failure of IL&FS to meet repayment obligations in September 2018 had triggered a liquidity squeeze that gripped India?s non-banking finance sector.As part of a clean-up, the government then replaced the IL&FS board, which has since been making efforts to resolve the debt situation.         

Related Stories

Gold Stories

Next Story
Real Estate

L&T Wins Mega Order for India’s Largest NVIDIA B300 AI Factory

Larsen & Toubro (L&T), through Vyoma.AI’s AI infrastructure subsidiary LTN Compute, has secured a mega order to develop what the company describes as India’s largest single-cluster AI infrastructure facility. The NVIDIA B300 AI Factory will support US-based AI cloud company Together AI’s platform for large-scale inference, fine-tuning and training workloads.The integrated AI Factory will be hosted at Vyoma.AI’s Chennai data centre campus and will have a capacity of 10,000 NVIDIA B300 GPUs. The platform will combine hyperscale data centre infrastructure, accelerated computing, h..

Next Story
Infrastructure Urban

Autodesk Elevates Nikhil Bagalkotkar to Lead AEC in India, SAARC

Autodesk has elevated Nikhil Bagalkotkar as Head – Architecture, Engineering and Construction (AEC), India and SAARC, with immediate effect.In his new role, Bagalkotkar will lead Autodesk's AEC business strategy across the region and drive adoption of the company's Design and Make platform. He will also focus on promoting digital design and construction technologies to help customers accelerate innovation and deliver more sustainable and resilient infrastructure.Bagalkotkar will be responsible for expanding Autodesk's AEC business, strengthening customer and partner engagement, and accelerat..

Next Story
Real Estate

Listed Developers' Pre-Sales Seen Rising 22.3 Per Cent in FY27

India's leading listed residential developers are expected to sustain strong sales momentum in FY27, with combined pre-sales of 11 major players projected to rise 22.3 per cent year-on-year, according to an analysis by ANAROCK Research & Advisory.Combined pre-sales of the developers are estimated to increase from Rs 1.49 trillion in FY26 to Rs 1.82 lakh crore in FY27. ANAROCK attributed the growth to sustained end-user demand, new project launches and strong execution despite higher property prices, construction costs and global uncertainties.Dr Prashant Thakur, Executive Director and Head..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement