SBI to put Kingfisher House on block in next round of e-auction

MUMBAI: Enthused by the good response to its mega auction of Rs 1,200 crore worth of properties belonging to defaulters, the State Bank of India is planning to put Kingfisher House on the block in the next round of e-auction. The bank on Friday put on the block 300 industrial and residential properties across the country which it had attached from defaulters in a bid to recover bad debts.

Until now, SBI used to sell assets of defaulters on a piecemeal basis. As a result, the response was also localized and most of the response came from a select group of people who specialized in purchasing stressed assets at a discount.

Now with the economy turning around, the bank hopes that investors from across the country will be drawn to the mega auction and there will be a genuine price discovery based on demand and supply.

“It was too early for us to include Kingfisher House in this auction and we plan to include this during the next auction. We want a good business house to buy it rather than have a reseller come in. Our valuation of this was quite dated and we are doing a fresh valuation, which is expected to be through in a couple of days,” said P K Malhotra, deputy managing director, SBI.

Friday’s auction included residential units and industrial plots across the country. While there was a good response to the residential properties, SBI expects some work on the larger industrial plots. “We are expecting to get over 10-15% (over the asking price). Some of the industrial properties are very good with all the infrastructure available. It is like a ‘plug and play’ asset for any entrepreneur,” said Malhotra.

The sale of the assets is expected to add a few hundred crores to SBI’s bottom line for the third quarter as successful bidders have to make full payment by March 29. The extent of profits would depend on the level of provisions made by the bank. If the asset has been fully written off, the entire realizations would add to the bank’s bottom line.