DB Realty Ltd updates on debt reduction

The Promoter Group has sold 1.46 Crore shares of the Company reflecting a 2.91% stake in the Company and have raised INR 301 Cr by sale of the said shares. A substantial portion of the proceeds from the sale of the said shares (net of tax) has been infused back by the promoters into the Company as repayment of related party transactions and unsecured interest free loan. The funds so infused has enabled the Company to retire its entire debt and therefore the Company on a standalone basis shall be debt free on a standalone basis on or before 30th November 2023.

The Company's journey to become debt free started about 3 years ago when the Company had a debt of INR 1,373 Cr. (standalone) and INR 3,140 Cr (consolidated) as of Sept 30, 2021. Since then, the Company has single mindedly focused on becoming debt free and has undertaken asset monetization and joint ventures as a route to achieving this goal.

In addition to the above, the Company also undertook a massive de-coupling exercise with the promoter group. The Company had in the past invested ~Rs. 1500 Cr in various promoter group entities. As on date the Company has completely exited all its investments in the promoter group companies with recovery of its entire preferential investment. This massive decoupling exercise resulted in cash flow becoming available to the Company and which resulted in the Company acquiring 100% stake in the Grand Hyatt Goa, 75% stake in the Hilton Mumbai & 50% stake in the upcoming Marriott Marquis Hotel & Convention Centre, St. Regis, Aerocity & Prestige Trade Centre at Delhi and which marked an entry into the hospitality business.

The management believes that the best yearsfor the Company lie ahead with formidable land holding in excess of 600 Acres and marquee partners such as Prestige Estate Projects Ltd (PEPL), Godrej Properties Ltd (GPL) and many other future partnerships that are "work in progress". Being debt free will enable the Company to cement the Company's position as a credible counter party for realty majors looking to enter the at Mumbai Metropolitan Region (MMR) Realty market which is the largest real estate market (in value terms) in India. The Company is also looking to build a large annuity portfolio and by 2028 is expected to have more than 2.00 million sq. ft. of prime leasable office space in Mumbai CBD under its ownership. The Company is amongst the top listed entities in the country based on equity base and amongst the top 10 Real Estate listed companies based on market cap.

The management affirms its full commitment to make the Company amongst the top 5 real estate companies in India in the next 3 years. The management states that no further equity is proposed to be sold by the core promoter group (see below) in the foreseeable future and further the money infused by the core promoter group into the Company shall be interest free and shall not be repaid by the Company until the Company has surplus liquidity in the future.

The Management takes this opportunity to thank all its shareholders, employees, joint venture partners and all stakeholders for steadfastly supporting the Company in its journey so far and looks forward to their continued support in the future.

Shares of D B Realty Limited was last trading in BSE at Rs. 204.00 as compared to the previous close of Rs. 214.70. The total number of shares traded during the day was 235810 in over 4367 trades.

The stock hit an intraday high of Rs. 216.85 and intraday low of 201.30. The net turnover during the day was Rs. 48878525.00.

Source : Equity Bulls

Keywords

DBRealty INE879I01012 DebtReduction