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Mumbai, February 3
Mumbai-based property developer Godrej Properties (GPL) plans to pick up 10 per cent stake in DB Realty (DBR) for ₹400 crore. The two companies have also separately agreed to set a special purpose vehicle to undertake slum rehabilitation and MHADA redevelopment projects.
GPL will subscribe to warrants convertible into equity shares aggregating to approximately 10 per cent of the issued and paid-up capital of DBR. The warrants are expected to be subscribed to on or before September 2023. The conversion into equity shares will happen in various tranches within the maximum period of 18 months.
The issue price will be determined in accordance with Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018. As of FY21, DBR had a consolidated total income of ₹131.57 crore, as per disclosures made by GPL.
The special purpose vehicle which is intended to act as a joint venture between GPL and DBR is proposed to be set up on or before March 31, 2022. GPL and DBR will each contribute an additional Rs 300 crore towards the equity platform focused on redevelopment opportunities in Mumbai.
50:50 partnership
The equity platform will act as a strategic special purpose vehicle providing GPL with ROFR (Right of First Refusal) for all slum rehabilitation and MHADA redevelopment projects to be identified by DB across Mumbai under a 50:50 equity partnership with 10 per cent development management fees to GPL.
“This will provide GPL access to a large number of slum rehabilitation and MHADA redevelopment projects in MMR,” GPL said in a statement.
Mohit Malhotra, MD & CEO, Godrej Properties, said, “We believe this strategic partnership will allow each company to utilize its complementary strengths to boost the amount of successful slum rehabilitation and MHADA redevelopment projects in the city thereby benefiting economically weaker sections of the population while contributing to the growth of Mumbai as the country’s financial capital.”
GPL more than doubled its December 2021 quarter consolidated net profit to ₹38.95 crore as against ₹14.35 crore posted in the same quarter last year.
Total consolidated income of the company grew 50 per cent to ₹466.91 crore during the reporting quarter as against ₹311.12 crore posted in the same quarter last year.
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