Tata Realty & StanC acquire commercial assets worth Rs. 250 crore in Gurgaon

In a deal valued at Rs 250 crore, Tata Realty & Infrastructure and Standard Chartered Private Equity have purchased the commercial assets of Gurgaon-based builder M3M as a joint venture.
“The joint venture between the subsidiary of Tata Sons & the StanC NBFC acquired 25 acres @ Rs. 10 crore per acre from Gurgaon based builder in the first quarter of the FY,” said a source familiar with the development.
While the Tata group company has been exploring various investment options across Mumbai and National Capital Region, M3M has recently raised Rs 1,250 crore from Indiabulls Housing Finance also for a residential project.

Indiabulls Real Estate

Amidst reports that Indiabulls Real Estate in tandem with its group firm Indiabulls Housing Finance is planning to invest an amount of Rs.25,000 crore in Haryana in the ensuing period of 7 years, the share price ended 4% higher at Rs.53

Following a special resolution passed by the shareholders at its 9^th Annual General Meeting held on September 28, 2015, the company intends to issue 3,000 Secured, Redeemable, Non-Convertible Debentures of face value Rs. 10 lakh each aggregating Rs. 300 crores, on a private placement basis as per terms and conditions.

Currently, the company has a market capitalization of Rs.2391.49 crore. Combining the shares of NSE and BSE, the number of shares traded on the counter amounted to 9984129. After opening at Rs.51.85, the company scrip touched a high and low of Rs. 54 and Rs. 51.25 respectively.

With a face value of Rs.2, the BSE group ‘A’ stock touched a 52 week high of Rs.78.35 on March 13, 2015 and a 52 week low of Rs. 41 on June 18, 2015. Over the period of last one week, the scrip touched a high and low of Rs. 53 and Rs. 45.05 respectively.

As on date, the promoters had a majority holding of 42.68 % in the company while Institutions and Non-Institutions held 21.31 % and 35.89 % respectively.

Indiabulls Housing Finance

OakNorth, which is a London lender now aims to challenge the dominance of other large global finance companies such as; HSBC, Barclays, Lloyds and Royal Bank of Scotland in India.  Now India is prime destination for investors and it is emerging in as the world’s largest financial centre. Indiabulls Housing Finance, one of the Indian corporate houses is ready to acquire a large stake in a London based foreign bank, OakNorth. According to sources, Indiabulls Housing Finance is buying 39.8 per cent stake in UK’s OakNorth Bank for $ 100 million.

Sameer Ghelot, Chairman of Indianbulls group is also planning to acquire 10 per cent stake in the same bank through his personal capital with same valuation. This deal is one of the largest deal among several other Indo-British deals and it is expected that deal will be signed on Thursday when PM Narendra Modi will meet the British PM David Cameron in London. The National Housing Bank (of India), the Reserve Bank of India and Prudential Regulation Authority of the Bank of England have approved this investment. First time in history these regulatory approval authorities are ready to approve such a big stake to any Indian corporate into a foreign bank, as per company statement. After this deal Indiabulls group will be the largest shareholder in the OakNorth Bank. However; still company has an option to increase its stake in the bank in near future, as per company sources.

About OakNorth Bank:

OakNorth Bank is London based largest non-bank lender active in SME segment with outstanding SME loan assets of over $2.3 billion and loan disbursals to these companies at over $5 billion, as per company sources. In UK, OakNorth Bank is focusing on the structurally under-served SME sector and now at this point of time Indiabulls with a decade-plus experience in lending at same sector in India is ready to take benefit from resources and market skills of OakNorth Bank as Indiabulls has an extensive credit processes based on cash flows. However; on the same time OakNorth Bank will also take benefit from Indiabulls’ experience as it is one of the largest lender in small business, especially with its LAP (Loan Against Property) products.

In 2013, Rishi Khosla a former adviser of India-born steel magnet Lakshmi Mittal was put the foundation of OakNorth Bank. During the phase of set up, OakNorth Bank had secured an investment and funding from a former member of Bank of England’s monetary policy committee. However; in present a former chairman of Financial Services Authority of the UK is on its board of directors. On the deal, Gehlot stated that with this investment, Indiabulls group total exposure in London will become shinier with excess of Rs 4,200 crores. Apart from this deal group’s real estate arm is engage in redeveloping the four projects in London, which is worth of total Rs 3,500 crore.

From the side of Indiabulls, this investment decision was led by a former deputy governor of RBI, MR. K C Chakrabarty as currently he is acting as an independent director on the Indiabulls board now.

‘B’ + for Indiabulls real estate by Fitch

Fitch Ratings have affirmed Indiabulls Real Estate’s Long-Term Foreign-Currency Issuer aDefault Rating (IDR) of ‘B+’ with stable outlook. The agency attributed this rating to the company’s debt reduction measures, diversified land bank and improvement in credit metrics.

Fitch is anticipating Indiabulls Real Estate’s net debt to reduce to around Rs 4,800 crore by end-FY16 from Rs 5,540 crore a year earlier. It also expects that the developer’s net leverage (net debt/ adjusted inventory) to improve gradually to around 55%, and contracted sales/gross debt to rise to around 0.8 times by FY17.

Sameer Gehlaut, founder & Controlling share holder of Indiabulls had infused equity of Rs 240 crore through a preferential share issue at the beginning of FY-16. Gehlaut also subscribed to Rs 80 crore of convertible warrants, which if converted will result in further equity infusion of Rs 230 crore in first half of FY-17.

Fitch foresees Indiabulls Real Estate’s cash collection to nearly double during 2015-16, which will be driven by payments from projects that are nearing completion. The company’s EBITDA margin also improved to 32% in first quarter of FY-16 from 23.5% last year.

Indiabulls has projects across the country, with considerable presence in the metropolitan areas of Mumbai, Delhi (NCR) and Chennai. IBREL has a significant land bank of about 7 million square metres, which is adequate to support project development over the next six to seven years. Moreover, the residential projects cover various categories be it middle-income or luxury. This diversity alleviates risks arising from volatility in a particular category or location, the Fitch release noted.