Property developer Indiabulls Real Estate, a part of the Indiabulls Group, announced its plans to foray into the power, retail and telecom businesses.
MUMBAI: Indiabulls Real Estate Ltd, India’s third-biggest developer by assets, plans to invest Rs 2,320 crore ($585 million) selling warrants to its founders to fund the building of shops and an electricity generation plant.
The sale of 43 million warrants convertible into shares will boost the combined stake held by Chairman Sameer Gehlaut, 34, and four others to 37% from 27% over two years, Gagan Banga, a company spokesman, said.
“We plan to use the money to set up wholesale shops across 30 tier-2 and tier-3 cities and set up a power plant for captive use at our Nashik special economic zone,” Banga said.
India’s property companies including DLF Ltd, the biggest, are raising funds to meet growing demand for shops, offices and houses in an $854 billion economy that is forecast to grow 8.5% in the year to March 31.
“The Indian economy is on a growth path and purchasing power of consumers is rising, increasing demand for land, houses and shops,” said U P Bhat, who helps manage Rs 2,600 crore at Canbank Investment Management in Mumbai, and doesn’t own Indiabulls shares.
Gehlaut will invest as much as Rs 1,080 crore for 20 million warrants, while the group Chief Financial Officer Rajiv Rattan, 35, and director Saurabh Mittal, 35, plan to invest Rs 540 crore each for 10 million warrants, the company said in an e-mailed statement.
Two joint managing directors Narendra Gehlaut, 35, and Vipul Bansal 34, will invest Rs 108 crore and Rs 54 crore, respectively.
The promoters’ stake can rise up to a maximum 5% by the end of the first year and 10% by the end of the second year, Banga said. The warrants will be converted into shares at a price of Rs 540 a share, the company said. Mumbai-based Indiabulls will seek shareholders’ approval for the plan.
Indiabulls Real Estate Ltd, carved out of Indiabulls Financial Services Ltd in December, was listed on the Bombay Stock Exchange in March.
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