Indiabulls Group chairman has said that the company is looking to divest the real estate business, its proposed merger of Indiabulls Housing Finance Ltd with Lakhsmi Vilas Bank. The promoters are in talks with potential buyers to exit the business.
The Economic Times has reported that Indiabulls Group is believed to have sounded out joint venture partner Blackstone Group Lp and other leading developers such as Godrej Properties Ltd to offload its stake in its real estate arm Indiabulls Real Estate Ltd (IBREL),
Promoters’ stake in IBREL is up at 38.8%. Gehlaut had also said the real estate business has significantly shrunk and he is happy to give up real estate if the Reserve Bank of India (RBI) sought this on the regulatory front in the context of the merger.
Previously, Blackstone had bought a 50% stake in IBREL’s office properties, One Indiabulls and Indiabulls Finance Center, in central Mumbai for $730 million. In the last year or so, IBREL has been streamlining its real estate portfolio, exiting office and residential projects in markets like Chennai.
A source said if Indiabulls exits the real estate business, it would be a complete exit. The company has been in talks with Blackstone and other developers too. The process would take time.
In noon trade, shares of Indiabulls Real Estate were up 10% to₹116.20 on BSE while benchmark Sensex rose 0.23% to 38,651 points.
The move to exit Indiabulls Real Estate is aimed at improving chances of regulatory nod for the proposed merger of Indiabulls Housing Finance with Lakshmi Vilas Bank (LVB), said a person familiar with this development.
As per the report, no deal has been finalised yet, but discussions with Blackstone have reached an advanced stage.
The promoters’ stake in Indiabulls Real Estate (IBREL) is at 38.8 percent and if the deal goes through, it will trigger an open offer by the acquirer.
As per the report, Indiabulls has approached Blackstone to sell its entire stake. Sources said Godrej Properties may team up with two PE funds if it steps in to buy out the Indiabulls Real Estate promoters.
