Aamby Valley auction: No bidder turns up for inspection

Khushboo Narayan, Indian Express, September 28, 2017

The auction of Sahara Group’s Aamby Valley City has seen not a single prospective bidder turning up for the physical inspection of the property near Lonavala, in Maharashtra, it is learnt. The physical inspection of Aamby Valley was scheduled on September 19-20.
Sources familiar with the development said even the two prospective bidders who had submitted their KYC forms initially did not turn up for the inspection.
Officials involved in the auction process said since the real estate market was stagnant, the prospective bidders might hold off bidding for the property. In case the auction does not attract satisfactory bids from prospective bidders, the sources said, the auction would be re-conducted after taking fresh approvals from the Supreme Court.
However, the sources said the final picture would emerge only after October 3, the last date for bidders to submit their bids along with 15 per cent earnest money deposit prescribed by the official liquidator in the sale notice of Aamby Valley City. The reserve price of the property is Rs 37,392 crore.

“At this point, no domestic investor is likely to have an appetite for such a big real estate project. Only certain foreign investors will look at such investments or probably a domestic investor that has private equity funding,” said a real estate consultant who did not want to be named.
So far, the office of the liquidator has spent Rs 4.88 crore on advertising the auction notice of Aamby Valley City in Indian and international newspapers, magazines and digital news platforms. It has spent another Rs 2 crore as legal expense, property valuation fee and charges for hosting the auction on an e-platform.
On August 14, the official liquidator published an auction notice of Aamby Valley City in leading newspapers inviting prospective bidders for the integrated hill city township spread over 6,761.6 acres near Lonavala and two land parcels measuring over 1,700 acres.
The property, described by the liquidator as an “ultra-exclusive chartered city”, includes timber chalets, modern villas, golf course, hospital, school and airport, among other amenities.
The auction of Aamby Valley City has been scheduled for October 10-11. The successful bidder will have to deposit 50 per cent of the bid amount by November 17, another 25 per cent by December 16 and the final 25 per cent by January 16.
On September 11, the Supreme Court refused to stay Aamby Valley auction, even as the Sahara Group said a Mauritius-based investor, Royale Partners Investment Fund, had offered to invest $1.67 billion (over Rs 10,700 crore) in the Aamby Valley project.
On August 10, the apex court rejected Sahara chief Subrata Roy’s plea to allow the firm to repay its investors till July 2019. The court directed the official liquidator to go ahead with the scheduled auction of Aamby Valley property.
The Supreme Court had on July 25 asked Roy to deposit Rs 1,500 crore in the Sebi-Sahara account by September 7 to establish his bona fide.
In 2011, Sebi alleged that the Sahara Group had illegally raised over Rs 20,000 crore from 30 million investors. The Supreme Court had in August 2012 ordered the Lucknow-based conglomerate to deposit with the regulator over Rs 24,000 crore collected from nearly 3 crore investors through issuance of some bonds. Interestingly, not many investors have come forward to claim refunds.
Roy was sent to jail on May 4, 2014, for not complying with the order of the apex court, and is currently out on parole.

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