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Business News/ Companies / People/  Indiabulls Real Estate gets Rs538 crore from promoter Sameer Gehlaut
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Indiabulls Real Estate gets Rs538 crore from promoter Sameer Gehlaut

The investment raises his stake in the property developer to 37% from 27%, a year after the three founders of the group separated their business

The investment is Gehlaut’s first significant infusion of equity into Indiabulls after the reorganization.Premium
The investment is Gehlaut’s first significant infusion of equity into Indiabulls after the reorganization.

Sameer Gehlaut, co-founder and chairman of the Indiabulls Group, will invest 538 crore in Indiabulls Real Estate Ltd, raising his stake in the property developer to 37% from 27%, a year after the three founders of the group separated their business.

Indiabulls Real Estate will raise the money through a preferential allotment of 5% equity shares and 5% warrants at a price of 67 per share to Gehlaut. The funds will be used to pare the company’s debt of 5,480 crore.

The investment is Gehlaut’s first significant infusion of equity into the group after the reorganization. Gehlaut now controls the home finance, real estate, securities and wholesale trading business segments of the group, headed by its flagship companies: Indiabulls Housing Finance Ltd, Indiabulls Real Estate, Indiabulls Securities Ltd and Indiabulls Wholesale Services Ltd.

Rajiv Rattan and Saurabh Mittal, the other two co-founders, head the power business. Rattan is the promoter of the power business, now known as RattanIndia Power.

“The equity infusion into IBREL (Indiabulls Real Estate) is for growth capital and to front load the debt reduction from the second quarter itself," said Gehlaut, also chairman of Indiabulls Real Estate.

Mumbai-based Indiabulls Real Estate’s debt has risen after the acquisition of the 22 Hanover Square property in central London and around eight acres of land in Thane last year, for a total of about 2,050 crore.

“This sizeable equity infusion should also help Indiabulls Real Estate to continue to conservatively conduct its business in a financially disciplined manner and not give in to the temptation to bulge its debt—a problem that plagues many in the sector," said a company spokesperson.

“As the company is constructing and selling well, it is using debt not for working capital, but for growth and to keep its balance sheet health in check," the spokesperson added.

Apart from debt reduction, Indiabulls Real Estate doesn’t have any new project planned this year.

Sales rose 31.5% to 2,037 crore in the year ended 31 March from 1,549 crore in the previous year. It has around 29 million sq. ft under development in Mumbai, Navi Mumbai and Gurgaon, and over 1,000 acres of fully paid-for land available for further development.

Indiabulls Real Estate’s London property, a rent-generating commercial asset, will be demolished and the developer plans to build luxury residences in its place.

This year is critical for Indiabulls Real Estate as the company will begin handing over homes in Centrum Park in Gurgaon and Indiabulls City in Sonepat. It plans to deliver Mega Mall in Vadodara. In the latter part of the year, part-delivery of its large township project at Panvel in Navi Mumbai is scheduled.

“Considering the real estate market conditions, Indiabulls has not yet announced any project launches so far and is focusing on the projects in hand," said Sandipan Pal, an analyst at brokerage Motilal Oswal Securities Ltd.

On Friday, another Mumbai-based realty firm Oberoi Realty Ltd raised 325 crore through a preferential allotment of 11 million shares to Aranda Investments (Mauritius) Pte Ltd, a unit of Temasek Holdings (Pvt.) Ltd.

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Published: 22 Jun 2015, 02:03 AM IST
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