Welspun Emerges as Top Bidder for Distressed Lavasa Project as Multiple Developers Submit Takeover Proposals

Welspun Group has submitted the highest bid of ₹850 crore for acquiring Lavasa Corporation through its subsidiary, as the debt-laden hill station project enters its second round of bidding process. The textile-to-infrastructure conglomerate's offer includes ₹150 crore in process costs, marking a significant development in the prolonged resolution of India's once-ambitious private city project.

Six Bidders Compete in Second Acquisition Attempt

The resolution process has attracted participation from six major entities, with bid values ranging between ₹500 crore and ₹850 crore. Besides Welspun Group, the competing bidders include Pune-based developers Ashdan and Pride Purple, leading real estate developer Macrotech Developers (formerly Lodha Developers), DB Corp subsidiary Valor, Jindal Steel and Power Group, and Mumbai-based Yogayatan Group.

Sources familiar with the matter revealed that Ashdan and Pride Purple have submitted a combined proposal aggregating to ₹843 crore. The payment structures proposed by various bidders span five to nine years, reflecting the complex nature of the distressed asset acquisition.

Environmental Clearance Remains Critical Hurdle

Most bidders have made their offers conditional upon receiving environmental clearance from the Maharashtra government, which remains the primary obstacle that led to the project's initial distress. Only Yogayatan Group has submitted an unconditional bid worth approximately ₹800 crore, positioning itself as a potentially more attractive option for lenders seeking certainty.

Industry experts noted that conditional bids typically face challenges under the National Company Law Tribunal's debt resolution framework. The committee of creditors will need to convene to evaluate alternatives if the conditional nature of bids proves problematic for the resolution process.

Massive Haircut for Lenders Despite Multiple Bidding Rounds

Even the highest bid of ₹850 crore represents less than 13% recovery of the total outstanding dues exceeding ₹6,642 crore, indicating a substantial haircut of over 87% for financial creditors. This outcome follows more than seven years of attempts to resolve the distressed debt situation.

The NCLT had initially approved a resolution proposal from Darwin Platform Infrastructure (DPIL) in July 2023, which offered ₹1,814 crore to lenders over eight years and committed to delivering completed homes to 837 buyers. However, the Mumbai bench cancelled this resolution plan in September last year after DPIL failed to make the required ₹100-crore upfront payment without justifiable reasons.

Revival of India's First Private Hill Station Vision

Lavasa was conceptualized as India's pioneering privately developed and managed city at the turn of the century. The project targeted affluent urban residents from Mumbai and Pune seeking escape from metropolitan noise and pollution challenges.

Following the cancellation of the previous resolution plan, the tribunal permitted revival of the resolution process and allowed the committee of creditors to exclude the period from July 13, 2021, to January 3, 2022, from the resolution timeline. This decision paved the way for the current round of bidding that has attracted renewed interest from multiple developers.

The ongoing process reflects broader challenges in Mumbai Metropolitan Region real estate where environmental approvals and regulatory compliance continue to impact project viability and investor confidence.