DB Realty Shares Surge Amid Promoter Group’s Strategic Moves

DB Realty Shares Surge Amid Promoter Group's Strategic Moves

VoM News Desk | November 28, 2023 | 02:07 PM IST | Breaking News | Follow on Google News

DB Realty Shares Surge Amid Promoter Group’s Strategic Moves

DB Realty Shares Surge Amid Promoter Group’s Strategic Moves

DB Realty’s shares experienced a notable rise of 3.42% to ₹211.40 each in early trading on Tuesday. This surge comes in the wake of a significant transaction by the company’s promoter group, who sold 1.46 crore shares, equating to a 2.91% stake in the company. This sale generated a considerable amount of ₹301 crore.

The proceeds from this sale, after tax deductions, have been reinvested by the promoters back into DB Realty. This move comes in the form of repayment of related party transactions and as an unsecured interest-free loan. This strategic financial maneuvering, as stated in a regulatory filing, is aimed at bolstering the company’s financial stability.

Journey to Debt-Free Status

DB Realty has embarked on a mission to achieve a debt-free status, a journey that began around three years ago when the company had a standalone debt of ₹1,373 crore and a consolidated debt of ₹3,140 crore as of September 30, 2021. The company has been actively working towards this goal through asset monetization and joint ventures. Additionally, DB Realty has undertaken a substantial de-coupling exercise from the promoter group, successfully recovering all its preferential investments in promoter group entities.

Expansion into Hospitality and Future Plans

This de-coupling has led to significant cash flow for the company, enabling it to make major acquisitions in the hospitality sector. DB Realty has acquired a 100% stake in the Grand Hyatt Goa, a 75% stake in the Hilton Mumbai, and a 50% stake in upcoming projects like the Marriott Marquis Hotel & Convention Centre, St. Regis, Aerocity, and Prestige Trade Centre in Delhi. Looking forward, the company plans to build a considerable annuity portfolio, aiming to have over 2.00 million sq. ft. of prime leasable office space in Mumbai’s CBD by 2028.

Clarification on Public Interest Litigation

In a separate development, DB Realty addressed a claim made in a Public Interest Litigation by Dr. Kirit Somaiya regarding the awarding of contracts to DBS Realty and Pune-based Chordia Group for constructing tenements in Mumbai. The company has denied receiving any notice and vehemently refutes the allegations, which they describe as baseless.

Strong Market Performance and Shareholding Pattern

DB Realty’s shares have significantly outperformed this year, with a jump from ₹95 to ₹208.50, marking a 120% rally, compared to the 63% gain in Nifty Realty during the same period. Notable shareholders include Rekha Jhunjhunwala, who owns 1.99% of the company. The company’s promoters hold a majority stake of 53.8%, while foreign institutional investors (FIIs) have a 2.2% stake, and the general public holds 44%. As of 10:30 PM, the stock was trading with a gain of 2% at ₹208.50 per share.

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VoM News Desk

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