Alok, Welspun may team up to run NTC mills

The corporation floated the tender in January, the second one in over a year, and expects to finalise successful bidders by July.

"We have got an excellent response to our second tender and are in a process of shortlisting the bidders, which will take two to three months," said K Ramachandran Pillai, chairman and managing director, NTC. Around eight to nine bidders are expected to be selected finally.

Industry experts say it is viable for private players to get into such JVs since setting up greenfield units is costlier. The land in NTC's mills is also attracting textile firms.

Sunil Khandelwal, chief financial officer, Alok Industries, said, "Apart from setting up our garmenting unit, we can use the additional area in the mill for other textile-related activities, such as training and design institutes."

Alok already has two mills from NTC's first tender in Mumbai. "Since the experience during the first tender was good, the company went for 2-3 mills in the second tender," he said. Private partners will get the land for a lease of 33 years, which can be extended to 99 years.

"We have a supervisory role in the joint venture rather. We hand over the management to the private players and let them run the business. Such JVs will help us increase the turnover," added Pillai.

Under the JV model, 51 per cent stake will be held by NTC with the rest being held by the private partner. The board will consist of eight members, of which five will be from NTC.

The states that house these mills include Maharashtra, Tamil Nadu, West Bengal, Uttar Pradesh and Kerala.

The textiles PSU is in the process of modernising its 52 mills. Out of which, it is taking care of 22 mills on its own at a cost of Rs 530 crore. The rest 30 will be modernised through JV mode.

The company has entered into joint venture for 5 of its mills after its first tender was released in 2007. Alok Industries and Future Group had signed in for two mills each where as Bhaskar Industries emerged as the preferred bidder for the fifth mill, all in Maharashtra.

Prime Textiles, Jay Bharat Textiles, Kamla Mills, Mantri Realty, Bhaskar Industries, SBPL Infrastructure and Akash Universal are among the other bidders in the race. NTC is now left with 13 mills for joint ventures.