April 5, 2024: Real estate developer Embassy Group has announced a substantial investment of Rs 1,160 crore in Indiabulls Real Estate Limited (IBREL) through preferential allotment. Additionally, Embassy Group has contributed residential assets valued at Rs 703 crore in Bangalore and Chennai to IBREL, further enhancing the company’s asset portfolio.
The preferential allotment comprises an investment of Rs 10 crore in equity shares and Rs 1,150 crore in warrants, with 25% upfront payment and the remainder to be paid over 18 months. The floor price for the shares has been set at Rs 111.51 per share in accordance with SEBI guidelines, inclusive of valuation conducted by a leading Big 4 firm. Following the transaction, Embassy Group will retain its position as the largest shareholder in IBREL, holding 18.7% ownership on a fully diluted basis.
In addition to the preferential allotment, Embassy Group has made significant contributions to IBREL’s asset portfolio. These contributions include a proposed 31-acre, 93-villa project in North Bangalore, a 0.5-million square foot (msf) high-rise residential project in Whitefield, Bangalore and a proposed 1.4-msf high-rise project in Chennai, which is part of an existing township. These acquisitions have been made at valuations representing an approximate 8-16% discount to the average of two independent valuations.
Furthermore, Embassy Group has committed to providing IBREL with a right of first opportunity to acquire identified existing assets and potential future assets, subject to mutually agreed terms and conditions. Jitendra Virwani, chairman and founder of Embassy Group, will be appointed as Embassy’s nominee director to the board of directors of IBREL.
Jitendra Virwani, said, “Being the largest shareholder, our commitment to the IBREL platform remains intact. This investment is to provide a pipeline of assets to IBREL for future growth while bringing prestigious investors to the shareholder roster. The transaction also offers growth to the listed entity by penetrating the key south Indian markets of Bangalore and Chennai.”
The aforementioned transactions are subject to approval from IBREL shareholders, regulatory authorities and other relevant stakeholders. Khaitan & Co. acted as the legal advisors to Embassy Group in this transaction.
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Dhwani is a content management expert with over five years of professional experience. She has authored articles spanning diverse domains, including real estate, finance, business, health, taxation, education and more. Holding a Bachelor’s degree in Journalism and Mass Communication, Dhwani’s interests encompass reading and travelling. She is dedicated to staying updated on the latest real estate advancements in India.
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