Indian Railways Taps Revenue Share Model; ₹8,092 Crore Railway Land Tender Announced in Mumbai

Indian Railways, through its Rail Land Development Authority (RLDA), has opened up three prime plots in Mumbai—Mahalaxmi, Bandra (East), and Parel—for long-term lease using its first-ever mandatory revenue share model. 

This move is designed to generate a significant real estate windfall, with a combined reserve price of approximately ₹8,092.30 crore and the potential for ongoing revenue from profit-sharing arrangements with developers.

The land parcels, located close to major business hubs and transport routes, have been designated for premium residential and commercial projects. Under the lease conditions, winning bidders must meet the set reserve prices and additionally share part of their profits with RLDA.

Key Highlights of the Mumbai Railway Land Tender

• Three Plots on Offer: The locations are Mahalaxmi (10,801 sqm), Parel (23,047 sqm, Supari Baug Colony), and Bandra (East, 45,371 sqm), each placed in premium areas near commercial hubs and transport nodes.
• Revenue Share Model: For the first time, developers must share a minimum percentage (indicatively 35% or more) of project revenue with the RLDA, rather than a one-time fee. This is expected to increase total returns for Railways over the life of the lease.
• 99-Year Lease: Each parcel is available for development (residential and commercial) on a 99-year lease, allowing extensive skyscraper and mixed-use projects.
• Reserve Prices: Mahalaxmi: approx. ₹993 crore, Parel: ₹1,734 crore, Bandra (East): ₹5,316 crore, making them among the costliest government land monetisations in Mumbai.
• FSI (Floor Space Index)*: Set at 4.05 for these plots, enabling the construction of large-scale, high-rise complexes.

*Floor Space Index (FSI), also known as Floor Area Ratio (FAR), is the ratio of a building's total built-up area to the total area of the plot of land it stands on.

• Bid Timeline: Bids for Mahalaxmi and Parel close October 14 and November 3, respectively; Bandra (East) closes November 12, 2025; pre-bid meetings have been scheduled in September and October 2025.

Impact and Industry Outlook

These leases are part of the railways' policy to create non-fare revenue streams by unlocking underused land banks in India's costliest cities.

The sites are targeted for luxury residential, office, hotel, and retail use. Mumbai’s leading developers are expected to participate, given the locations’ proximity to Lower Parel, Bandra-Kurla Complex, and key metro lines.

Funds raised will support railway infrastructure, station upgrades, and passenger amenities, helping modernise Mumbai’s vital transit system.

Significance

This marks a landmark reform in Indian public land monetisation: by using a revenue-sharing model instead of just upfront sales, Indian Railways stands to benefit from Mumbai real estate’s future growth, not just one-time payments.