Adani Properties bags Dharavi redevelopment project for Rs 5,069 Cr

On November 29, the Adani Group, with an initial investment of 5,069 crore, won the contract to rehabilitate Dharavi, one of the biggest slum clusters in the world.

Adani Group filed a bid of 5,069 crore, DLF Group offered a bid of 2,025 crore, and Naman Group’s bid was disqualified owing to technical reasons. Adani Group’s bid is only the project’s initial investment of 20,000 crores, and to meet the requirements of the bid, the company must create a special purpose vehicle (SPV). The remaining 80% of this initial investment must be paid in two instalments: 20% upon submission of an integrated master plan, and another 20% before signing the development agreement.

An SPV is a legal corporation created for the particular purpose of building infrastructure and rehabilitation. In this SPV, the State Government owns 20% of the company, while the Adani Group, an international consortium, owns the other 80%.

As per the bidding contract, “The project will be awarded to the qualified bidder quoting the highest amount, over and above the minimum stipulated investment of ₹1,600 crore, that the lead partner [Adani Group] of the SPV company is ready to bring in. Apart from equity of ₹400 crore, any investment required for the project shall be brought by the lead partner in the form of compulsorily convertible securities such as compulsorily convertible debentures and/or compulsorily preference shares.”

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