The Hindu Business Line : Indiabulls Real Estate to cash in on mill assets

Indiabulls Real Estate may (IBREL) be closer to a public listing of Indiabulls Property Investment Trust in Singapore, with the filing of prospectus with the Monetary Authority of Singapore. This comes soon after the company received an approval from the relevant Court in Isle of Man to acquire a 100 per cent stake in Dev Property Development (DPD).

Strategy behind acquisition

In February 2008, IBREL announced its plan to acquire AIM listed company DPD for about Rs 1,100 crore, at a premium to its prevailing price, which has fallen by about 25 per cent since DPD’s listing. The premium offered by Indiabulls appeared to be driven by the stakes held by DPD in Indiabulls’ lucrative projects — Jupiter Mills, Elphinstone Mills and the Raigarh SEZ. The assets located in Mumbai hold strong prospects, what with the Jupiter Mill asset likely to start receiving rentals from the first quarter of FY-2009 and rental for the other mill expected to trickle in by the end of the same fiscal.

With the filing of prospectus of Indiabulls Property Investment Trust in Singapore, IBREL may be paving way for transferring these 2 mill assets to the trust. The revenue flow from these 2 assets is likely to support premium valuations for the company in the Singapore market.

IBREL in turn would receive significant cash flows from the IPO to proceed with its ambitious plans locally.

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