Automaker Fiat India is evaluating bids for its 54-acre property in suburban Mumbai's Kurla area, and will decide soon on who it will sell it to.
Leading property developers have made offers for this prime property, which real estate industry sources suggest could fetch Fiat more than Rs 300 crore (Rs 3 billion).
"The company is evaluating all proposals and will arrive at a decision on selling the property to the topmost bidder in the next few months," a Fiat source said.
When contacted, De Filippis Giovanni, managing director, Fiat India, said, "A decision on our Kurla land will be taken before the end of this year."
Foremost among those said to be interested in the property is the Kohinoor Group, promoted by Shiv Sena leader Manohar Joshi, which is already building a township on an adjoining 38-acre plot it bought from Premier Automobiles for Rs 90 crore in 2005.
A Kohinoor official said they were interested in the property, but that they had not finalised plans.
The Fiat property originally belonged also to Premier Automobiles, promoted by the Doshi family, who had entered a joint venture with Fiat in 1995 to manufacture cars at the Kurla factory.
Following differences between the partners the JV was dissolved and Fiat bought the factory and premises in 1998.
Kohinoor is building 'Kohinoor City' township on the land (66 per cent of which was residential and the rest industrial) that it bought from PAL. The township will have residential apartments, commercial buildings and other amenities. Sources suggest that Kohinoor would be interested in the Fiat property to expand the township.
However, the Fiat property has a plant and much machinery standing on it and it could take a while for the company to dispose this.
"Actually disposal of the land could take longer as it will not only involve paper work, but also vacating the land. We have a lot of stock lying in the factory along with plant and machinery," a Fiat official said.
"Besides, the land ultimately belongs to Fiat India's parent company, Fiat SpA of Italy, so the process could take even longer," the official said.
Fiat suspended operations at the Kurla factory in September last year, before which it assembled the Padmini, Palio, and Sienna there.
The company moved the assembly to Ranjangaon, near Pune, to take advantage of tax concessions, and also entered into a joint venture with Tata Motors for manufacturing vehicles, engines and transmissions for the domestic and export markets.
Kohinoor is selling office premises at Kohinoor City at Rs 15,000 a square foot whereas residential apartments are selling at Rs 7,000 a square foot.
A property consultant valued the township project after construction comes at more than Rs 1,600 crore, on a price of Rs 7,000 a square foot.