Indiabulls Group co-founder and Chairman Sameer Gehlaut will increase his stake in Indiabulls Real Estate (IBREL) to 37 per cent from 27 per cent by investing Rs.538 crore through a preferential offer.
Mr. Gehlaut will buy five per cent through a preferential allotment and subscribe to 43.6 million warrants, which are equivalent to a five per cent stake in the company on conversion. The equity shares are being purchased at Rs.67 per share, which is a 59 per cent premium to the company’s closing price of Rs.42.05 on Friday on BSE.
In a statement, the company said the equity infusion was “to augment the long-term resources of the company for meeting funding requirements for its business purposes, and as a reflection of promoters’ confidence in the future of the company.” IBREL has a net debt of around Rs.5,400 crore.
“The fund infusion will be for ‘growth capital’ and will help bring down the debt. It expects to reduce debt by 20 per cent or around Rs.1,000 crore this year.
On the high premium being paid, Vice Chairman and Managing Director of the company Gagan Banga, said, “all real estate stocks have reacted in the last 4-6 weeks. Mr. Gehlaut believes in the intrinsic value of the company and has a long term perspective for the business. The stake acquisition will be funded from dividend of about Rs.400 crore that Mr. Gehlaut received.”
The group was split among the promoters last year with Mr. Gehlaut heading the home finance, real estate, securities and wholesale trading businesses and the other two promoters managing the power segment.
