Indiabulls Real Estate Announces Rs 500-Crore Share Buyback

Indiabulls Real Estate Ltd. has announced a Rs 500 crore buyback at more than double its current share price.

The Indiabulls Real Estate buyback will see shares purchased at Rs 100 each. On Friday, the stock closed at Rs 43.40 on the Bombay Stock Exchange.

The company’s board of directors on Friday "approved a proposal of Rs 500 crore of buyback of up to 5 crore fully paid-up equity shares...representing approximately 11 percent of its total existing paid-up equity capital at Rs 100 per share".

The buyback would be through the tender offer route, as prescribed by capital markets regulator Securities and Exchange Board of India.

All eligible existing holders/beneficial owners of the equity shares (including persons who become shareholders by cancelling global depository receipts and receiving underlying equity shares), on a proportionate basis, can participate in the buyback.

The board has constituted a buyback committee and delegated it powers to oversee and implement the process.

According to Indiabulls Real Estate’s current shareholding pattern, promoters have 23.36 percent stake in the company, while Bengaluru-based Embassy Group holds nearly 14 percent.

On Thursday, Embassy Group's Chairman and Managing Director Jitu Virwani said the group has no immediate plans to increase its stake in Indiabulls Real Estate. "There is no plan right now," Virwani said, but his company would remain invested.

In June, Indiabulls Real Estate’s promoters sold 14 percent stake via open market operations to Embassy Group for Rs 950 crore, as part of its strategy to focus on financial services and exit the realty business.

The deal gave Embassy Group a way to enter Mumbai and Delhi-NCR markets, the two biggest property markets in the country.