Promoter Invests in Indiabulls Realty : The Economic Times

Mumbai:



Sameer Gehlaut pumps Rs. 538 crore through in ` preferential allotment of 5% equity shares and 5% warrants

Sameer Gehlaut, promoter of Indiabulls Real Estate, is investing `. 538 crore in the company through a preferential allotment of 5% equity shares and 5% warrants. The investment will be made . 67 a share, representat a price of ` ing a premium of 59% to Friday's closing price.

The board of directors of the company approved the issue of shares and warrants to the promoter on Saturday. Shares of Indiabulls Real Estate closed at ` . 42.05 on the Bombay Stock Exchange on Friday.

Currently, Gehlaut holds 27% stake in the company.

This is the first capital infusion by the promoter after the group executed a major restructuring last year that resulted in the entire group splitting into two separate business organisations. While two of the three founders -Rajiv Rattan and Saurabh Mittal -took over complete control of the power business, Gehlaut retained financial services, real estate, securities broking and wealth management services under the Indiabulls Group.

“This capital infusion will not only strengthen Indiabulls Real Es tate's balance sheet but will also provide it with growth capital to start delivery of 6 million sq ft in the current financial year and reduce debt by around 20%,“ said Gehlaut, chairman of Indiabulls Group.

“I would like to consolidate my holding in Indiabulls Real Estate over a period of time while the group consolidates its presence further in housing finance and real estate,“ he said.

The company's debt-equity ratio, which currently stands at 0.76, is likely to ease to around 0.6 post the equity infusion.

Currently, Indiabulls Real Estate has projects spread over 29 million sq ft in the National Capital Region, Mumbai Metropolitan Region and Chennai. During the past one year, Indiabulls Real Estate has invested over ` . 2,000 crore in acquiring two properties, both through auctions.

The company acquired a property -22-23 Hanover Square property in central London at Mayfair, from Scottish Widows, a private equity fund and a prime 7-acre plot in Thane from Voltas.

Indiabulls Group is engaged in businesses across financial services, real estate, securities broking and wealth management services.For the year ended March 2015, Indiabulls Real Estate reported 11% year-on-year rise in net profit at . 248.08 crore and 52% increase in ` total revenue at ` . 2,736.60 crore.

Real estate has been one of the poorest performing sectors in the past few years with developers' worsening debt-equity ratios and rising inventory levels. Given this depressed market sentiment and a negative outlook for the sector, real estate companies have been unable to raise equity barring a few exceptions.