Lenders have reduced the reserve price for Go First's 95-acre land parcel in Thane by nearly 30% to ₹1,375 crore. The auction is set for August 20, as the banking consortium aims to recover over ₹3,918 crore in unpaid dues. This move follows an unsuccessful attempt to sell the property at a higher valuation in June 2024.
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The banking consortium managing the insolvency process of grounded airline Go First has launched a fresh attempt to sell a 95-acre land parcel located in Thane. Following a failed auction attempt in June 2024, lenders have significantly lowered the reserve price for the property to ₹1,375 crore. This is a reduction of nearly 30% from the previous reserve price of ₹1,965 crore.
The land parcel serves as collateral for loans provided by a group of lenders, including the Central Bank of India, Bank of Baroda, and IDBI Bank. These financial institutions are looking to recover total dues exceeding ₹3,918 crore, which accounts for the principal amount and interest accrued up to August 31, 2023. The adjustment in the reserve price is a common step under the SARFAESI Act, which governs how banks can recover money from distressed assets when initial attempts to find buyers do not succeed.
While the property is located in the Mumbai Metropolitan Region, which is generally a high-value real estate market, the sale of such large distressed assets often faces hurdles. Developers in the current market environment are prioritizing capital conservation and tend to favor joint ventures over large outright land acquisitions. This cautious sentiment among potential buyers is a key factor that lenders must navigate when liquidating high-value assets.
From a strategic perspective, the Thane land remains a point of interest due to its proximity to ongoing infrastructure developments. Connectivity in the area is expected to improve with the progress of the Mumbai Metro Line 4, along with road widening and tunnel projects near Ghodbunder Road. For investors and market observers, the outcome of this August 20 auction will be a primary monitorable. Success will depend on whether this lowered price point effectively bridges the gap between the valuation expectations of the lenders and the risk appetite of institutional real estate developers. If the auction attracts bids, it will mark a critical step in the ongoing insolvency recovery process for the lenders involved.