Sebi to Buy IDBI Bank’s Mumbai building for Rs 1,000 crore

MUMBAI: The Securities and Exchange Board of India (Sebi) is set to buy IDBI BankBSE -5.54 %'s building in Bandra-Kurla Complex (BKC), Mumbai's financial hub, for close to Rs 1,000 crore.

The capital market regulator will acquire the state-owned bank's seven-storey building, which has 3.21 lakh square feet of super builtup area, close to its existing office, making this the second biggest transaction at BKC since 2013.The board of Sebi last month gave an in-principle approval for this property acquisition, said a Sebi board member. The regulator is now in the process of getting the actual valuation done, the person said. Real estate consultants say the current market rate of BKC is between Rs 30,000 and Rs 35,000 per square foot.

Sebi requires space to accommodate all its staff. At present, the regulator has moved its market intermediaries regulation and supervision department to the Nariman Point office in South Mumbai, while its enquiry and adjudication officers are housed in a different building at BKC.

Sebi, which has a total staff strength of 780, is planning to recruit more people in the coming months. This additional building will help the regulator accommodate all its staff under one roof. The acquisition is likely to be funded from its general fund, which has a corpus of over Rs 1,500 crore.

“In recent times, there has been a lot of commercial real estate transactions happening both in leasing and for outright purchase of A-category buildings and this could be the second largest transaction in BKC area,” said Ankur Jain, Group CEO, Satellite Developers, a real estate development company.

In the 80's, IDBI had bought this land in an auction. In 2004, the bank built this building with the plan to use it as its head office but because of height restriction, the bank could only build seven floors. The Mumbai Metropolitan Region Development Authority (MMRDA) had imposed height restrictions for certain area in BKC because they were used as flight path.

Since the size of the property was not sufficient to accommodate the entire staff, IDBI Bank retained its head office at Cuffe Parade and housed its subsidiaries and western regional branch office in BKC. Over the years, IDBI Bank has sold several of its assets across the country.

Among other major deals in the area, Shapporji Pallonji Investment Advisors confirmed a deal to acquire commercial project Inspire BKC from Adani Realty for Rs 2,000 crore in January this year.

In 2017, Bharti Axa bought 65,000 square feet office space in BKC for Rs 170 core. In 2015, healthcare products major Abott India bought 4.35 lakh square feet office space for Rs 1,479 crore. In 2013, Citibank bought 3 lakh square feet office space in BKC for Rs 985 crore.