Jubilee Hills land gets dream price

Hyderabad, Feb. 20: A consortium led by ICICI Venture, the venture capital arm of ICICI Bank, and Maytas, the privately-owned construction company owned by the Raju family of Satyam Computer Services and Nagarjuna Construction Company, on Monday emerged as the largest bidder for a 23,659 square metre of land in Jubilee Hills, amid accusations of foul play.
The land is located right at the corner of Jubilee Hills check-post. The State government became richer by Rs 336 crore through the auction. As per the bid conditions which had been intimated to the applicants well in advance, Huda accepted bid amounts in sealed tenders from the applicants and went in for an open auction. Both the tender rules and announcements made by Huda officials made it clear that whoever quotes the highest bid among sealed tenders and open auction would be awarded the land.
The ICICI Venture consortium bid Rs 1,41,800 per sq. metre in the tender, while in the open auction, Gowri Shankar Gupta of Shagum Mall Management which also owns Hyderabad Central, bid Rs 1.35 lakh per sq. metre. Mr Gupta immediately raised questions about the process of having an open auction and a tender for the sale. He also indicated that he could be filing a lawsuit against the process. The drama started right from the time the open auction started. While the reserve price for a sq. metre of land was fixed at Rs 40,000 by Hyderabad Urban Development Authority (Huda), an early bidder offered Rs 60,000 per sq. metre.
Mr Gupta then stepped and began raising the bid, until the rest of the 20 bidders backed out. His bid in the open auction was the highest at Rs 1.35 lakh per sq. metre. Mr Gupta was congratulated fulsomely by the Huda officials. It was then that the sealed bids were opened, and ICICI Venture consortium’s bid of Rs 1,41,800 per sq.metre was announced, leading to pandemonium.
“The process was rather quirky, because while the open auction was going on, an employee of Huda, was seen holding the sealed bids. Huda should have opened the sealed bids simultaneously to avoid the confusion of who was the highest bidder,” said one of the bidders.
Asked whether paying Rs 336 crore for approximately six acres of land was worth it, Mr Kishore Goteti, director, investments, of ICICI Venture Funds Management Company said, “We are sure it will be worth the price we are paying, because we see Hyderabad emerging as a key market in India’s growth story.”
ICICI Venture has a 60 per cent stake in the project, while Maytas, which is managed by Teja Raju, the elder son of B. Ramalinga Rao, chairman of Satyam Computer Services Ltd, and Nagarjuna Construction Company have a 40 per cent stake. Maytas and NCC have collaborated on other real estate projects in Hyderabad. “We will be putting the land to mixed use, which could include a five-star hotel and shopping malls. Huda has assured us that Floor Space Index will not be an issue. We will be paying 25 per cent of the total cost in the next one week, as required by the bid regulations. Huda followed the process of having both an open auction and sealed tenders, which has been in use since the last 20 years,” Mr Goteti said.
“The highest bidder will have to pay one fourth of the bid amount within seven working days and remaining balance should be paid before March 10,” Huda secretary P Venkatrama Reddy said. While 57 companies took applications only 21 took tokens to participate in the auction by paying the EMD of Rs 5 crores. As many as 14 companies submitted sealed tenders.