The National Textile Corporation’s (NTC’s) decision to put Finlay Mills to tender for the fourth time is likely to set back its plans to launch the second phase of its auctions, and possibly cost it revenue it could have ploughed into the modernisation of its sick mills.

The NTC had first called for bids over 10 months ago but had to retender the 10.5-acre plot at Parel twice more, because of a very tepid response from a slump-stricken realty market. On Tuesday, the NTC board rejected the Lodha Group’s offer of Rs 710 crore even though it matched the NTC’s reserve price.

The sale of surplus land is one of the major sources of revenue for revival of sick mill units. The NTC manages 119 sick private sector textile mills that were nationalised by the Government over the last several decades. Of these mills, 66 were declared unviable and shut down while the remaining 53 were to be modernised, 22 of these by the NTC itself through funds generated from sale of its surplus mill land, mostly in Mumbai. The rest are to be modernised through joint ventures with private developers.

The NTC has given no specific reason for rejecting the offer received for the Finlay land. K Ramachandran Pillai, NTC chairman and managing director, was not available for comment. “We received NTC’s rejection letter on Wednesday evening. It only states that our offer has been rejected as per orders by the Ministry of Textiles and nothing more,” said Abhishek Lodha, director of the Lodha Group, adding that the group is contemplating its future course of action.

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