Indiabulls Real Estate Ltd has approved an equity infusion of Rs 538 crore ($84.6 million) through a preferential allotment of shares and equity convertible warrants to its promoter Sameer Gehlaut to augment long-term resources of the company, it said on Sunday.
Gehlaut will subscribe to 36.7 million equity shares and 43.6 million warrants convertible into equivalent number of equity shares at Rs 67 each.
Gehlaut currently owns 27 per cent stake in the firm while the overall holding of the promoter group is pegged at around 37 per cent including the 10 per cent stake held under employee trust of the firm. Accounting for the fresh issue and the outstanding convertible securities held by the public, Gehlaut's stake in the firm will rise to 38.2 per cent post the preferential allotment and conversion of all outstanding warrants into equity.
Overall promoter holding including the stake held by employee trust would add up to 46.38 per cent, as per VCCircle estimates.
The company said that this will go towards augmenting the long-term resources of the company for meeting funding requirements for its business purposes.
The proposal is subject to approval of shareholders.
This development comes almost a year after the diversified business group was divided into two parts with Sameer Gehlaut retaining bulk of the business including housing finance, securities, real estate and wholesale trading while Rajiv Rattan and Saurabh Mittal got sole control of power and infrastructure businesses.
Rattan and Mittal had to also give up on the Indiabulls brand in the firms controlled by them, as part of a group restructuring.
Around a year ago, Indiabulls Real Estate had bought a prime property in London for $264 million in an attempt to diversify its investment and profit pool. This has taken the debt pile of the company several notches higher.
Towards the end of last year, Indiabulls, through a subsidiary, also bought a commercial complex in Chennai, one of the key real estate markets for the company, for roughly Rs 600 crore.
The real estate arm of the group is primarily present in residential, commercial and special economic zones (SEZ) segments with geographical presence across Ahmedabad, Gurgaon, Chennai, Hyderabad and Mumbai, among other cities. A majority of its portfolio is restricted to Mumbai, Delhi NCR and Chennai.
It has 31 ongoing projects aggregating to 72.86 million sq ft, 2,588 acres of SEZ development and a land bank of 1,000 acres. To its credit, it has a portfolio of 3.3 million sq ft delivered projects totalling $1.75 billion, according to its website.
On the back of capital infusion by the promoter at a high premium to the market price, the company's scrip shot up 30 per cent to Rs 54.75 a share, in a strong Mumbai market on Monday.