Godrej Properties drops 10% as board approves investment in DB Realty

Shares of Godrej Properties fell 10% to Rs 1,502.35 in intraday trading on Friday after its board approved a Rs 400 crore investment in DB Realty (DBR), to acquire a stake of around 10% by issuing warrants. The Mumbai-based property company’s stock has fallen 16% in the past two trading sessions. The company then announced lackluster results for the December quarter, with pre-sale volumes down 7% year-on-year / 39% sequentially.

At 09:27; Godrej Properties traded down 7% to Rs 1,556, against a 0.10% gain in the S&P BSE Sensex. Over-the-counter trading volume nearly doubled with a combined total of 2.2 million shares changing hands on the NSE and BSE.

“The council has approved a potential investment in DB Realty as well as the creation of a special purpose vehicle with DBR to jointly undertake slum upgrading and MHADA redevelopment projects,” Godrej Properties said in a press release Thursday after market hours.

The company will subscribe for warrants convertible into shares representing approximately 10% of the issued and paid-up capital of DBR for a total amount of approximately Rs 400 crore. Godrej Properties and DBR will each contribute an additional Rs 300 crore to the equity platform focused on redevelopment opportunities in Mumbai, the company has said.

The equity platform will act as a strategic special purpose vehicle providing Godrej Properties with ROFR (right of first refusal) for all slum upgrading and MHADA redevelopment projects to be identified by DB across Mumbai under a 50/50 equity partnership with 10% development management. company fees. This will allow the company to access a large number of slum upgrading and MHADA redevelopment projects in MMR, Godrej Properties said.

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