M3M buys Sahara’s Gurgaon land for Rs1,211 crore

Date : Dec 5, 2014

Bengaluru: The Sahara group, which has been struggling to sell its assets both overseas and in the country to raise money for the release of its jailed chief Subrata Roy, has managed to sell off a large parcel of land to Gurgaon-based real estate firm M3M India Pvt. Ltd for Rs.1,211 crore, said people familiar with the development. The 185-acre piece of land situated in Chauma, near the Gurgaon-Delhi border, is one of four land parcels Sahara said it has signed sale agreements for last week. The others are in Jodhpur, Vasai (near Mumbai) and Pune. M3M intends to develop a smart city on the Gurgaon land in the next five years or so, said Pankaj Bansal, director, M3M. “We intend to create a mixed-use development consisting of branded residencies, branded service apartments, multiplexes, hotels, offices, entertainment centres and other smart city type of development. We will also have international medical, educational and sports facilities in this area,” Bansal said. He said the transaction will be funded from the company’s internal accruals, and that the company may also bring in strategic partners and corporate investors, including private equity (PE) funds. For its nine domestic properties, Sahara is expected to get around Rs.4,000-4,500 crore, real estate analysts said. Sahara sold a 100-acre plot in Ahmedabad to city-based HN Safal group for around Rs.411 crore earlier this year. Though it has been able to get some momentum in terms of divesting its India assets, the Sahara group told the Supreme Court last Friday that it has been unable to finalize sales of its three overseas properties. Sahara didn’t respond to an email query sent on Thursday. Sahara group has to raise Rs.10,000 crore, half in cash and the rest in bank guarantee, in order to secure Roy’s release from Tihar jail in Delhi. Out of this, Sahara has already deposited Rs.3,117 crore. Roy was sent to jail on 4 March, after he failed to appear in court in the contempt proceedings that the market regulator had initiated against two Sahara firms—Sahara India Real Estate Corp. Ltd and Sahara Housing Investment Corp. Ltd. The Securities and Exchange Board of India (Sebi) had proceeded against the group for failing to obey a court directive to refund a sum of around Rs.20,000 crore to investors from whom the two Sahara firms had raised the money through schemes that the regulator ruled were illegal. The real estate sector has seen a slowdown in the last two years or so, particularly in the National Capital Region (NCR) and Mumbai, India’s largest and most expensive property markets, respectively. “Given the weak scenario, and when the real estate market has been witnessing a prolonged lull, the transaction, which is one of the largest in recent times, has happened at a good value,” said Sanjay Dutt, executive managing director, South Asia at property advisory Cushman and Wakefield. While land deals across India haven’t dried up entirely, there are only a handful of buyers who are actually scouting for land buys. Large land transactions that have been concluded this year include Oberoi Realty Ltd buying Tata Steel Ltd’s 25-acre land parcel in Mumbai’s Borivali suburb for around Rs.1,155 crore in an e-auction. In another deal, Mumbai-based Runwal Group bought Crompton Greaves’ land parcel in suburban Kanjurmarg for around Rs.1,020 crore. Sahara has filed a defamation case in a Patna court againstMint’s editor and some reporters over the newspaper’s coverage of the company’s dispute with Sebi. Mint is contesting the case.

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