Indiabulls Real Estate stock rallied in early trade today after the firm said its promoters are planning to sell 14% stake to third-party investors.
Indiabulls Real Estate stock rose up to 14.74% to an intra day high of Rs 151 on BSE. Indiabulls Real Estate share price opened with a gain of 6.65% at 140.35 level. Indiabulls Real Estate share price has been gaining for the last two days and has risen 10.76% in the period.
The small cap stock has lost 22.89% during the last one year but risen 56.48% since the beginning of this year.
In a filing to bourses, the firm said, “Pursuant to the applicable provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform you that in line with company’s promoters’ strategy to focus on financial services in the long run, the promoters intend to dispose-of up to 14% of the fully paid-up share capital of the company (out of the aggregate 38.72% fully paid up share capital of the company, currently held by them) to third party investors.”
Mustafa Nadeem, CEO at Epic Research said,”The company has been on this trajectory for a long time now since they started to sell its core assets in the real estate market division. The sale to the Blackstone group has already been somewhat half of their overall business in the real estate division. The recent stake sale is “part of the process”. We believe this company is now transforming itself into a financial industry focused player. It had to be this way. The kind of debts that the company was having in the balance sheet the time they entered this business vertical was hurting their overall efficiency. This is rather positive for the group as they might be now focused only on the Financial space.”
In a related development, US-based investment firm Blackstone may acquire Indiabulls Real Estate’s promoters’ stake at an estimated enterprise value of around $1 billion, sources said Thursday.
Blackstone might buy promoters’ total 39 per cent stake in Indiabulls Real Estate through a joint venture with Bengaluru-based realty firm Embassy Group, according to a PTI report.
Indiabulls Group is looking to exit the real estate business so that it can get regulatory approvals for the proposed merger of Indiabulls Housing Finance with Lakshmi Vilas Bank.
Sources said the talks between Blackstone and Indiabulls Group are at an advanced stage. The deal could be struck at an enterprise value of around USD 1 billion, they added.