DB Realty shares surge 3.4% on promoter stake sale, debt-free status | Mint
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Business News/ Markets / Stock Markets/  DB Realty shares surge 3.4% on promoter stake sale, debt-free status
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DB Realty shares surge 3.4% on promoter stake sale, debt-free status

D B Realty's promoter group has sold 1.46 crore shares, generating ₹301 crore. A significant portion of the proceeds has been reinvested into the company, enabling it to retire its entire debt by November 2023.

DB Realty is a real estate development company based in India. It is engaged in the development, construction, and sale of residential and commercial properties.Premium
DB Realty is a real estate development company based in India. It is engaged in the development, construction, and sale of residential and commercial properties.

Shares of DB Realty jumped 3.42% to 211.40 apiece in early trade on Tuesday. In a significant development, the company's promoter group has sold 1.46 crore shares, representing a 2.91% stake in the company. The sale of these shares generated a substantial sum of 301 crore. 

Notably, a considerable portion of the proceeds, after tax deductions, has been reinvested by the promoters into the company as repayment of related party transactions and unsecured interest-free loan, the company said in a regulatory filing today. 

"The funds so infused have enabled the company to retire its entire debt, and therefore the company, on a standalone basis, shall be debt-free on a standalone basis on or before November 30, 2023," the company added.

Also Read: Rekha Jhunjhunwala portfolio: DB Realty share price hits 52-week high

The company’s journey to become debt-free started about 3 years ago, when it had a debt of 1,373 crore (standalone) and 3,140 crore (consolidated) as of September 30, 2021. Since then, the company has single-mindedly focused on becoming debt-free and has undertaken asset monetisation and joint ventures as a route to achieving this goal.

Additionally, the company said it also undertook a massive de-coupling exercise with the promoter group. Previously, the company had invested 1,500 crore in various promoter group entities. As on date, the company has exited all investments in the promoter group companies, recovering its entire preferential investment.

Also Read: Oberoi Realty makes the right moves to woo investors

This massive de-coupling effort has resulted in cash flow becoming available to the company, leading to the acquisition of a 100% stake in the Grand Hyatt Goa, a 75% stake in the Hilton Mumbai, and a 50% stake in the upcoming Marriott Marquis Hotel & Convention Centre, St. Regis, Aerocity, and Prestige Trade Centre at Delhi—marking the company's entry into the hospitality business.

Looking ahead, the company aims to build a substantial annuity portfolio and expects to possess more than 2.00 million sq. ft. of prime leasable office space in Mumbai CBD by 2028. D B Realty is positioned among the top-listed entities in the country based on equity base and is among the top 10 real estate listed companies based on market cap.

Also Read: Realty cos gear up to meet FY24 launch target

In another development, the company said it received information through a post on X (formerly known as Twitter) that Dr Kirit Somaiya filed a Public Interest Litigation in the Honorable Bombay High Court, wherein he claimed that the erstwhile government and Mumbai Municipal Corporation awarded four contracts to DBS Realty and the Pune-based Chordia Group of Companies to construct tenements for project-affected people in Mumbai.

The company clarified, stating, “We state that no such notice has been received by us. However, we vehemently deny all these allegations as contained in the subject post, which are absolutely false and entirely baseless."

DB Realty is a real estate development company based in India. It is engaged in the development, construction, and sale of residential and commercial properties. The company's projects encompass a wide range of real estate offerings, including residential complexes, commercial spaces, and mixed-use developments.

DB Realty shares have more than doubled investors' wealth this year, moving from 95 apiece to 208.50, translating into a staggering rally of 120%. In contrast, Nifty Realty has gained 63% during the same period.

Also Read: Sunteck Realty share price jumps over 5%; Motilal Oswal expects a 41% upside

According to Trendlyne shareholding data, Rekha Jhunjhunwala owns 1.99% of the company, equivalent to 10,000,000 shares as of the end of Q2FY24. The company's promoters maintain the majority stake at 53.8%, and foreign institutional investors (FIIs) hold a 2.2% stake in the company, while the general public holds 44% stake. 

At 10:30 PM, the stock was trading with a gain of 2% at 208.50 apiece. 

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Published: 28 Nov 2023, 10:28 AM IST
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