Indiabulls Real Estate surges 13% on divestment plan of unit Century

Indiabulls Real Estate surged 13 per cent to Rs 109 on the BSE on back of heavy volumes after the company said it has decided to divest Century, the parent company that houses Hanover Square property, London. The company has decided to focus only on Mumbai & National Capital Region (NCR) markets.

In light of continuing Brexit related issues and uncertainty around it, the London property market remains sluggish. So, the promoter has undertaken to buy the parent company of London asset for £200 million (approx Rs 1,807 crore), Indiabulls Real Estate said in business updates.

Indiabulls Real Estate, which has net debt of Rs 4,590 crore as on March 31, 2019, said post this transaction, the same would come down to below Rs 3,000 crore.

The company had purchased this property for £161.5 million. CBRE, London has recently valued the property at £189 million. The transaction is subject to approvals including the shareholders approval, it added.

Meanwhile, The Economic Times on Wednesday reported that Indiabulls Group is believed to have sounded out joint venture partner Blackstone and other leading players such as Godrej Properties to offload its stake in Indiabulls Real Estate. The BSE said it has sought clarification from Indiabulls Real Estate regarding the same.

The promoters’ stake in Indiabulls Real Estate stands at 38.9 per cent, according to the shareholding pattern. 

The stock of Indiabulls Real Estate witnessed a strong run-up in the past one-and-half months. It has rallied 90 per cent from its 52-week low of Rs 63 on February 6, 2019. It touched a 52-week high of Rs 224 on April 26, 2018 in intra-day deal on the BSE.

At 11:43 am, the stock was trading 11 per cent higher at Rs 118, as compared to 0.24 per cent gain in the benchmark S&P BSE Sensex. The trading volumes on the counter jumped 1.5 times with 26.99 million shares changing hands on the BSE and NSE, till the time of writing this report.