Subrata Roy's Aamby Valley auction sees just two bidders: What makes the luxury resort so expensive?

Sahara Group's luxury resort town Aamby Valley, which has been put up for auction by the Supreme Court, has found just a couple of parties who have shown interest in the bid.

Sahara Group's massive luxury resort town Aamby Valley, which has been put up for auction by the Supreme Court, has found just a couple of parties who have shown interest in the bid. There are many steps in the auction process, but the first step for the bidder is to submit the KYC details. Both parties approaching the bid are so far doing it in complete confidentiality and, officials familiar with the matter have refused to disclose their names. However, it is believed, that the bidders could be representatives of two separate consortium of investors and corporates.
Earlier, the Supreme Court had rejected Subrata Roy's plea seeking more time to pay the remaining amount and gave the go-ahead for the auction of group's Rs 37,392 crore Aamby Valley properties. This despite, the Sahara Group claiming Royale Partners Investment Fund Limited of Dubai had agreed to provide a loan of USD 1.6 billion against security of 26 per cent shares of its Aamby Valley project.

The possible reason behind just two bidders showing interest in Aamby Valley could be the price, according to real estate agents. Supreme Court had set the reserve price of Rs 37,392 crore for the township spread over 6,761.6 acres near Lonavala in Pune district.

What's in Aamby valley?

  • The official liquidator has described Aamby Valley an "ultra-exclusive chartered city" that includes timber chalets, modern villas, golf course, hospital, school and airport, among other amenities
  • Aamby valley boasts three manmade lakes and 11 Water Bodies
  • It also has a private airport
  • Waterdrome for amphibian aircraft
  • 18 hole floodlit Golf Course spread over 256 acres
  • Individual villas, chalets and residences
  • Fine dining restaurants, state-of-the-art recreational facilities
  • International School Aamby (ISA), a premier residential school with boarding facilities
  • Aamby Valley also has a hospital called The Healing Touch
  • There's a health club with gymanisum, swimming pool, sauna and steam
  • Water sports including jet ski, speed boat, pontoon boat, pirate ship, towing inflatable rides, waterfall safari, aqua bus
  • 12,000 sq ft Town Plaza with branded stores, movie hall, food courts, grocery stores
  • The Aamby Valley Website also claims that the property has 10,000 acres of open space

Who can afford to buy Aamby Valley?

Even though the reserve price for Aamby valley has been fixed at Rs 37,392 crore, Sahara group believes the market valuation of Aamby Valley is Rs 1 lakh crore. It is pretty evident that it is due to the incredibly high price tag that the auction has drawn just two bidders.

In fact, according to real estate consultants, no single real estate player in India could be in a position to purchase such a huge property, especially because the real estate sector has taken a serious jolt due to demonetisation.

According to a consultant speaking to PTI, the only possible buyers could be from China or Japan even though there are a couple of cash rich industrialists in India who can afford such a price tag but have been so far away from real estate as a business.

What happens next in the auction process?

There are several steps before the final auction takes place in Mumbai. After the submission of the KYC documents, the bidders can make physical inspection of the assets to be auctioned till September 20. Thereafter, bids would be submitted in sealed cover with 15 per cent earnest money deposit with the official liquidator till October 3.

The auction has been scheduled for October 10-11, while the top three highest bidders would be initiated by email by October 17. The successful bidder would need to deposit 50 per cent of the bid amount by November 17 and further 25 per cent by December 16 and then the final 25 per cent by January 16.

If the successful bidder fails to make the payment, the property would be offered to the next highest bidder with a similar payment structure spread over three months.