Bengaluru-based property developer Embassy group will buy a 28 per cent stake in Indiabulls Real Estate from promoter Sameer Gehlaut.
Embassy's flagship company Embassy Property Development on Friday bought 63 million shares — representing 14 per cent of Indiabulls Real estate at Rs 150.45 apiece or Rs 949.27 crore in total, the data from exchanges showed. This will be followed by the purchase of the residual stake over the next six to eight weeks and an open offer to the shareholders of Indiabulls Real Estate.
Ajit Mittal, president at Indiabulls Group, said exiting the real estate business was to fast track Indiabulls Housing Finance’s meger with Lakshmi Vilas Bank.
Sameer Gehlaut
Jitendra Virwani, chairman of Embassy Group, did not respond to a mail on the subject. Embassy Group plans to buy up to 28 per cent in Indiabulls Real Estate eventually, Virwani told a TV channel, adding the company will try to synergise businesses between Embassy and Indiabulls and take the company forward.Virwani said the deal would be funded through the company's own funds. “We were in the right place at the right time. As far as Indiabulls is concerned, they needed to exit the realty business and I think there wasn’t anybody who would turn things around as fast as we could. It synergises the business we have. It gives us a great platform in Bombay and in the NCR area where we have been trying to make in-roads for a long time," said Virwani.
“This is in line with the promoters’ strategy to focus on financial services in the long run. The promoters intend to dispose off about 14 per cent of the fully paid share capital of the company to third party investors," Indiabulls Real Estate informed exchanges on Thursday night.
Indiabulls has 23.5 million sq ft of residential properties and 2.4 million sq ft of commercial space under development. Embassy is currently building 10,000 residential units across six projects and has built 12 million sq ft of housing projects so far. It has developed 34 million sq ft of office space in a joint venture (JV) with Blackstone.
Embassy Office Parks, a JV between Embassy Group and Blackstone, listed the country’s first real estate investment trust. Indiabulls and Blackstone have done several deals in recent years. In March, Indiabulls Real Estate sold 50 per cent of its Mumbai properties to Blackstone for Rs 4,750 crore. Blackstone also bought Indiabulls' Chennai property for Rs 900 crore.