DB Realty Limited has executed a share purchase agreement to sell its entire stake in wholly-owned subsidiary Real Gem Buildtech Private Limited (RGBPL) to Kingmaker Developers Private Limited for approximately Rs 231.42 crores.
As per the regulatory filing by DB Realty, the share purchase agreement was signed on November 6, 2023 and the deal is expected to be completed by November 7, 2023. DB Realty held 100% equity and preference shares in RGBPL.
Kingmaker Developers Private Limited is part of Mumbai-based Rustomjee Group and is involved in real estate development. The deal will make RGBPL a Rustomjee Group company.
“The above transaction will lead to considerable amount of free cashflow to the Company. Further, the Company has been carrying the entity as “Asset held for sale” till now and the transaction will help to clean up the DBR Balance Sheet and close the transaction with Rustomjee,” DB Realty said.
RGBPL is the owner of the under-construction luxury residential project ‘Rustomjee Crown’ located in Mumbai’s Prabhadevi area. The project comprising two towers of over 60 floors has a total saleable area of around 1 million sq ft. As per industry estimates, the current market value of the project is over Rs 1000 crore.
Earlier, RGBPL had filed a scheme of arrangement with NCLT Mumbai to transfer the Rustomjee Crown project to DB Realty. This scheme will now become redundant and is expected to be withdrawn, as mentioned in the regulatory update.
The total consideration for the deal is Rs 231.42 crores, which will be received by DB Realty as per the terms of the share purchase agreement. The amount translates to an exit value of around Rs 23,000 per sq ft for the Rustomjee Crown project.
According to sector experts, the deal will allow DB Realty to monetize its assets and raise growth capital at a time when the real estate market is on an upcycle. DB Realty has been planning to expand its residential and commercial projects across Mumbai, Pune and Goa.
On the other hand, Rustomjee Group will add a marquee project to its portfolio through this acquisition. The group already has several ongoing and planned projects across the Mumbai Metropolitan Region.
DB Realty reported a consolidated turnover of Rs 199 crore for the financial year 2022-23. The company has significant holdings in various real estate projects, hospitality, rent-yielding commercial properties and educational institutions across India.
DB Realty stock was trading 0.5% higher at Rs 107.45 on the NSE after the announcement on Tuesday. The company’s share price has jumped over 60% so far this year amid the positive sentiment in the real estate sector.
Kingmaker Developers Private Limited was incorporated in 2008 and has its registered office in Mumbai. It is involved in the business of real estate development and construction. The company belongs to Rustomjee Group, founded by Boman Rustom Irani in 1997.
With this acquisition, Rustomjee Group will expand its presence in Mumbai’s prime residential property market. The group is known for its projects like Rustomjee Seasons, Rustomjee Element, Rustomjee Paramount and Global City Virar.
The transaction between DB Realty and Kingmaker Developers is an all-cash deal and does not fall under related party transactions. It is outside the purview of any existing scheme of arrangement. This is the first major deal announcement from DB Realty since the new related party transaction norms came into effect in July 2023.
