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.

Dear reader,

Business Standard has always endeavored to provide up-to-date information and commentary on developments that matter to you and that have wider political and economic implications for the country and the world. Your constant encouragement and feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these challenging times stemming from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative opinions and incisive commentary on relevant topical issues.
However, we have a request.

As we battle the economic impact of the pandemic, we need your support even more so that we can continue to bring you more great content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of bringing you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism we are committed to.

Support quality journalism and subscribe to Business Standard.

digital editor

About Joan Dow

Check Also

Baker McKenzie advises Pacoma on the sale to Legget & Platt | Writing

Baker McKenzie advised Pacoma Holding S.à rl in connection with the sale of the Pacoma …