Century Textiles Buys Disputed Mumbai Plot for Rs 1,100 Cr, Birla-Wadia Truce

Century Textiles and Industry, a Birla group company, announced on Tuesday that it will acquire a prime land parcel in Mumbai's mill district from Nusli Wadia for Rs 1,100 crore. This deal signals a truce between the Birla and Wadia families, who have been in dispute over the Worli plot, now prime real estate. The matter had been pending in courts.

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Prime Real Estate Acquisition

Century Textiles' realty arm, Birla Estates, is acquiring title rights for the approximately 10-acre plot. The existing leasehold interest of Century Textiles and Industries Ltd (CTIL) will merge with ownership rights through this deal. The statement highlighted that this land parcel has a booking value potential of Rs 14,000 crore if fully developed.

The Wadias had previously sold a 22-acre parcel nearby to Japan's Sumitomo for Rs 5,200 crore. This sale included the group's headquarters. Birla already has developments on the piece it possessed. The new deal creates a 30-acre contiguous landholding in this prime area with an overall booking value potential of around Rs 28,000 crore.

Historical Dispute

Nusli Wadia had moved the courts in 2009 over the use of the land leased by his great-grandfather to Century for 999 years. In 2007, a textile mill on the land was shut down, and the Wadias sought approval for a change in land use. A local court stayed any developments on the plot in 2010.

In March 2022, Bombay Dyeing's board decided to make the company leaner from a debt perspective and put it on a path to sustained profits by strengthening its balance sheets. The company reported a loss of Rs 517 crore in FY23, which turned into a Rs 2,948 crore profit in FY24.

Financial Impact

The Bombay Dyeing scrip closed up by 1.23 per cent at Rs 210.65 apiece on the BSE on Tuesday. Meanwhile, Century Textiles' scrip surged by 5.41 per cent to close at Rs 2,842.40 apiece.

In 2022, Birlas launched a new realty project leading Wadias to issue a caution notice asserting control over the 10-acre parcel. Birlas clarified that this parcel was not part of the development offered to the public.

Birla Niyaara, the flagship project launched by Birla Estates on this plot, has already achieved sales of Rs 5,700 crore since its launch. This project is part of the larger development plan for the newly acquired land.

After securing the Sumitomo deal last year, Bombay Dyeing stated that the sale aimed to improve financial health. This move was part of broader efforts to turn around its financial performance and achieve sustained profitability.

The acquisition marks an important step for Century Textiles and Industry as it consolidates its holdings in Mumbai's prime real estate market. This development could potentially reshape the landscape of Mumbai’s mill district and enhance its commercial value significantly.

The resolution of this long-standing dispute between two of India's oldest corporate families underscores their ability to navigate complex legal and business challenges while pursuing strategic growth opportunities.