Indiabulls realty arm soars 42%

Mumbai: The Indiabulls Real Estate stock price rallied 42% (Rs 44) to Rs 150 on the NSE in Monday’s relatively weak market after the company said its board was looking at reorganising its businesses, which include real estate development, residential and commercial properties. There’s a proposal to bring its development arm under Indiabulls Real Estate, while its rental unit could come under Indiabulls Commercial Assets, the company said.
On the BSE, the stock rallied nearly 40% to close at Rs 148. Over 21 crore shares of Indiabulls Real Estate changed hands on the two bourses on Monday. According to the reorganisation plan, Indiabulls Commercial Assets will have a portfolio of 8.35 million sq ft of office buildings across Mumbai, Gurgaon and Chennai which is rented out. The rental arm has annuity revenue of nearly Rs 700 crore from its 5.2 million sq ft of rented properties during the current fiscal and is projected to reach Rs 1,357 crore in annuity revenues in fiscal 2020-21, sources said.
The company plans to either get a strategic investor in its rental arm or demerge the unit from the development subsidiary. If the rental arm is demerged, every shareholder of Indiabulls Real Estate will get scrips of Indiabulls Commercial Assets. The company’s board has appointed a committee to recommend the final reorganisation plan, the company informed the bourses.
During nine months of fiscal 2017, Indiabulls Real Estate had reported a net profit of Rs 317 crore, up 38% from Rs 229 crore reported during the comparable period of the previous fiscal.