IndiaBulls selling assets to pay loans

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IBREL (IndiaBulls Real Estate Limited) based out of Mumbai, has recently bid adieu to part of its assets and promoter stakes for almost Rs. 6,500 crores. This liquidation has helped the company in decreasing its loans and is moving towards zeroing its outstanding. 

IBREL during an analyst presentation said that they have liquefied 50% of its stake in the JV (Joint Venture) portfolios controlled by Blackstone Group Inc. for the amount of over Rs. 2,700 crores and subsequently reduced the bank loan amounting around Rs. 2,250 crores.

Earlier in November, IBREL sold its London property Hanover Square for around GBP 200 million (a little over Rs. 1,800 crores) and paid off over Rs. 1,100 crores in bank loans.

Earlier this year IndiaBulls released a statement saying they are planning to move away from the real estate sector after making the company completely debt free, additionally, the company said Sameer Gehlaut will no longer be the promoter of IBREL. The company has already sold off 14% of Sameer Gehlaut’s shares in June for over Rs. 900 crores to Embassy Group, a Bengaluru based developer for Rs. 150 per share.

On condition of confidentiality a person with close links to this development said ‘The company has divested assets and stake worth Rs. 6,500 crore for now and all of it will be used to reduce debt’

Company’s plan to move away from the realty sector once IBREL is completely debt free and removing Gehlaut as the promoter of IBREL has hit a deadlock as RBI (Reserve Bank of India) rejected the proposal of merging IndiaBulls Housing Finance Limited with Lakshmi Vilas Bank, back in October.

Jitu Virwani, Chairman and MD (Managing Director) of Embassy Group said that if he does not buy the remaining 14% stake of the promoter, he’ll still keep the existing 14% and remain an investor of IndiaBulls Real Estate Limited.

In the analyst presentation, IBREL said that it will only focus on its 2 core markets, namely, NCR (National Capital Region) and MMR (Mumbai Metropolitan Region) and plans on generating revenues from the sales of properties under construction to the investors and deploy those funds on completing the development and acquisition of other projects.

The company said it’ll change its focus and will not go for all in approach wherein they pay huge sums to acquire lands, instead will go for a JV type business wherein they will try to partner with the existing land owners and develop the project, hence incurring lower costs. 

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