MUMBAI/KOLKATA (TIP): The Supreme Court‘s order allowing e-auction of Taj Mansingh has paved the way for a fierce takeover battle between the house of Tatas, the country’s largest conglomerate, and ITC, the tobacco-to-hotels group, for the iconic property near India Gate in the capital.

Y C Deveshwar-led ITC will make an aggressive bid for Taj Mansingh when its licensor New Delhi Municipal Corporation (NDMC) opens the bidding process for the five-star hotel in a few weeks. Tatas, too, will make a competitive offer for the long-term lease of the property, which has been a big revenue contributor to its hospitality arm, Indian Hotels Company (IHCL). IHCL has been managing the property since its opening in October 1978. The contract ended in October 2011 and thereafter several extensions were given by NDMC.

The apex court has said that if Tatas lose out in the e-auction, then it would have to vacate the property within six months. If ITC wins the bid for the 292-room hotel, it will be the group’s fourth property in Delhi. IHCL confirmed that it will participate in the e-auction, while ITC declined to comment.

Currently, the Tatas have five hotels in Delhi which includes Taj Mansingh, Taj Palace and three Vivanta properties -Ambassador, Dwarka and Surajkund.

ITC runs ITC Maurya, Sheraton Delhi and Welcomhotel Dwarka.

The five-star category in Delhi, comprising 2,700 rooms, saw an occupancy level of 70% and an average room rate of Rs 10,000 in fiscal 2017. ITC’s proposed move comes on the heels of two top officials of Tata Trusts, along with five other people, filing a public interest litigation in the Bombay high court for its direction to the central government to divest its stake in ITC. Currently, through five insurance companies and Special Undertaking of the Unit Trust of India (SUUTI), the government holds nearly a third of ITC’s equity, worth over Rs 1 lakh crore. The court will take up the case for admission on April 27.

Tata Trusts and its arms, including its main holding company Tata Sons, control 39% of IHCL. Interestingly, construction major Shapoorji Pallonji Group, whose scion Cyrus Mistry is in a legal battle with the Tatas, is building two of ITC’s luxury hotels -ITC Kohinoor in Hyderabad and ITC Narmada in Ahmedabad.

Source: TOI