DB Realty stock hits new high on plans to issue warrants to investors, Rakesh Jhunjhunwala to participate in the fundraise

10 Feb 2022 , 12:20 PM

DB Realty stock freezes at a new 52-week high on Thursday after the company’s board approved allotment of further 5100,00,000 warrants convertible into equivalent numbers of equity shares (“Warrants”) to Non-Promoter Investors (“New Investors”), subject to the approval of the shareholders and regulatory authorities.

These new investors are:

• Rekha Jhunjhunwala: 1,00,001000 Warrants
• RARE Investments : 1 1001001000 Warrants
• Lotus Family Trust : 50100,000 Warrants
• KIFS Dealers: 50,00,000 Warrants
• Abhay Chandak: 1 100,001000 Warrants
• Aditya Chandak: 1100,001000 Warrants

Rakesh Jhunjhunwala who is referred to as the ‘Warren Buffet of India’ manages his wife Rekha Jhunjhunwala’s portfolio and also owns RARE Enterprises.

This is in addition to 7,70,001000 Warrants to be Issued to Promoter Group & Pinnacle Investments as informed in our Earlier Communication, thus taking the total Warrants issue to 12170,00,000 Warrants.

Furthermore, post-conversion of warrants allotted and proposed to be allotted to Pinnacle Investments, DB Promoters, the issued and paid-up expanded capital of DB Realty shall stand increased to approximately 50,07,001000 Shares and the shareholding pattern shall change as follows:

• Promoters of DB Realty: 54.08%
• Pinnacle Investments: 17.97%
• New Investors: 9.98%
• Other Public Shareholding: 17.97%

On March 04, the company seeks approval from the shareholders.

The total fund infusion into DB Realty Limited post conversions of warrants allotted and proposed to be allotted to Pinnacle Investments, DB Promoters and New Investors will be approximately Rs1575 crore. The funds raised through the Warrants shall be utilized primarily to repay debt and augment the long term capital requirement of the Company. According to the infusion of funds, the Company on a stand-alone basis is expected to be debt-free on 31st March 2022.

DB Realty believes that it is going to play a pivotal role in Mumbai real estate with a portfolio of more than 100 million sq. ft. of prime real estate in the Mumbai Metropolitan Region. The inclusion of blue-chip Investors in the Company indicates the confidence and faith the Investors have in the intrinsic value of the Company and its business.

From a peak liability of Rs41142 crore, the Company expects to be debt-free in the near term. The focus of the Company going forward is to partner with established large real estate developers to unlock the value of its large real estate portfolio. This balance sheet light model will enable the Company to remain largely debt-free going forward too.

At around 12.15 pm, DB Realty was trading at Rs122.50 per piece up by 4.97% on Sensex. The stock level is the new 52-week high.