Post-IPO, DB Realty’s net profit up 78%

Bangalore: After raising Rs1,500 crore through an initial public offering (IPO) earlier this year, DB Realty Ltd’s fourth quarter net profit rose 78% over a year ago to Rs252 crore. Revenue for the three months ended 31 March more than doubled to Rs951 crore from Rs464 crore.

The Mumbai developer, which sold 3 million sq. ft space in the city last year, won contracts in recent months for two redevelopment projects—a Rs5,000 crore government colony project in Bandra East jointly with Ackruti City Ltd and a 6 million sq. ft project in Goregaon in suburban Mumbai. “The sales outlook looks good and we should be able to sell at least 4-5 million sq. ft this year from our existing and new projects,” chief financial officer Jayesh Doshi said on Wednesday.

With nearly 61 million sq. ft of development, of which 4 million sq. ft is in prime South Mumbai locations, DB Realty is pegged as one of the largest redevelopers after Housing Development and Infrastructure Ltd. According to analyst reports, DB sold development rights worth Rs211.8 crore in 2009 and plans to sell another 18 million sq. ft.

“DB has a high-margin business model where it acquires land at low costs,” an analyst with a Mumbai brokerage said on condition of anonymity. “It has a huge project pipeline in prime Mumbai locations, which is risk-free and will always fetch good returns.”

From the money it raised from the IPO, the developer plans to spend at least Rs950 crore in project acquisitions and construction.