Indiabulls Real Estate swings back to profit in Q2, total income up 652%

Realty developer Indiabulls Real Estate has reported consolidated net profit of Rs 5.65 crore for the quarter ended September as against net loss of Rs 76.01 crore a year ago. Total income rose 652% on year to Rs 381.25 crore.

The company’s sales rose to Rs 874 crore for the half-year ended September from Rs 368 crore a year ago, while collections for the period rose to Rs 654 crore against Rs 284 crore, the developer said in a regulatory filing.

Consolidated debt of the company net of cash and liquid investments is Rs 967 crore as on September end with total sold receivables and completed inventory in hand worth Rs 3,369 crore as on date.

Separately, the company has also announced Chairman and Non-Executive Director Sameer Gehlaut has submitted his resignation with effect from December 31, 2021. Gehlaut will be focusing on business of providing technology-enabled transaction finance and primary healthcare services by Dhani Services, of which he is the founder Promoter, Chairman & CEO.

The proposed merger between Embassy Group and Indiabulls Real Estate has entered the final lap as both the companies have now filed the requisite joint application with the jurisdictional bench of NCLT, for its approval to the scheme of merger. The application for approval of merger with NCLT is listed in the current quarter.

The combined entity will be renamed Embassy Developments Ltd and will be co-headquartered in Mumbai and Bengaluru, the company said.

The merger has already received a nod from the Competition Commission of India (CCI), the stock exchanges, and the Securities & Exchange Board of India (SEBI).

Following the completion of the merger, the combined listed entity will be 44.9% owned by Embassy Group, 26.2% by the existing public and institutional shareholders, 9.8% by existing IBREL promoter group and around 19.1% by the Blackstone Group and other Embassy institutional investors.

Embassy Group already holds 14% of listed Indiabulls Real Estate and once the merger gets concluded later this year it will become the promoter of the combined entity.

Both the property developers are looking to complete their proposed merger by December end, which marks Indiabulls Group’s complete exit from real estate business.

The merger will be a cashless structure as Embassy subsidiaries--NAM Estates (NAM) and Embassy One Commercial Property Developments (NAM Opco)--will swap shares with Indiabulls Real Estate.

According to the terms approved by boards of both the merging entities, Indiabulls Real Estate shares were valued at Rs. 92.5 per share and shareholders of Embassy subsidiary NAM will get 6.619 shares of Indiabulls Real Estate for every 10 shares of NAM. And NAM Opco shareholders will get 5.406 shares of Indiabulls Real Estate for every 10 shares in NAM Opco.

The merger is expected to provide diversification to the listed company’s shareholders through a balanced mix of residential and commercial development with visibility on near term liquidity.