Blackstone To Buy Indiabulls Real Estate’s Stake In JVs For Rs 4,420 Crore

Indiabulls Real Estate Ltd. will sell stakes in its commercial and leasing business assets to Blackstone Group LLP for about Rs 4,420 crore as part of the company’s plan to be debt free in the ongoing financial year.

The company, according to an exchange filing, will sell its entire direct/indirect stake in:

• Indiabulls Properties Pvt. Ltd. and Indiabulls Real Estate Company Pvt. Ltd.—the joint ventures with Blackstone, which own commercial assets at Lower Parel, Mumbai.
• Yashita Buildcon Ltd. and Ashkit Properties Ltd., which own commercial assets at Udyog Vihar, Gurugram.
• Commercial assets/development at Worli, Mumbai
• Rights/stake in K.G. Marg, New Delhi and Sector 104 and 106, Gurugram

Blackstone had earlier acquired 50 percent stake in Indiabulls Real Estate’s Mumbai and Gurugram projects. After the latest divestment, the real estate private equity investor will own 100 percent stake in these projects.

The proposed divestment is expected to be completed very soon, subject to execution of agreements and customary closing conditions, the filing said.

Indiabulls Real Estate in August had announced its plans to be net debt-free in the financial year ending March 2020 by selling stakes in various businesses to any third-party investor or internationally renowned private equity firm. The company was also looking to sell its London property for £200 million. Its total debt stood at Rs 4,420 crore and cash equivalent at Rs 739 crore as of March 2019, according to Bloomberg data.

After the divestments, Indiabulls Real Estate will be left with a few residential projects, mainly in Mumbai (central Mumbai and Mumbai Metropolitan Region) and National Capital Region (Gurugram), a CLSA report said. The company’s growth, according to the brokerage, depends upon its 1,929-acre land bank in Mumbai Metropolitan Region and National Capital Region and potential joint ventures in future.

Promoters of Indiabulls Real Estate are looking to pare their holding in the company to comply with the Reserve Bank of India’s norms for a proposed merger of Indiabulls Housing Finance Ltd. with Lakshmi Vilas Bank. In June, Bengaluru-based Embassy Property Developments Pvt. Ltd. bought 13.9 percent stake in Indiabulls Real Estate via a block deal. After this, the promoters’ holding fell to 23.38 percent. No further disclosures have been made since then.

Shares of Indiabulls Real Estate snapped their two-day decline and rose as much as 3.3 percent to Rs 66.40 apiece. That compares with a 0.17 percent gain in the benchmark NSE Nifty 50 Index.