Godrej Properties shares zoom 7% after calling off DB Realty deal
On Thursday, Godrej Properties had announced that it would invest Rs 400 crore to acquire around 10 per cent stake in DB Realty and another Rs 300 crore to set up a joint platform for undertaking a slum redevelopment project.
- Feb 7, 2022,
- Updated Feb 7, 2022 1:25 PM IST
Shares of Godrej Properties Limited zoomed 7 per cent to hit an intraday high of Rs 1,608.85 on BSE after the firm decided to cancel its plans to invest Rs 700 crore in DB Realty. On Thursday, Godrej Properties had announced that it would invest Rs 400 crore to acquire around 10 per cent stake in DB Realty and another Rs 300 crore to set up a joint platform for undertaking a slum redevelopment project. "After prolonged discussions and taking into consideration the feedback from the stakeholders and minority investors, the Board has decided not to proceed with any further evaluation of a potential investment in the equity capital of the DB Realty and the Platform," Godrej Properties said in a regulatory filing. The firm also added that the board has authorised it to engage with DB Realty with regard to the same, including to ensure appropriate and timely dissemination of this information by DB Realty Limited to its shareholders, adding that it may however continue to explore the possibility of evaluating projects with DB Realty on a case to case basis. "Godrej properties stock was down more than 16% in the last two trading sessions after the announcement of investment in DB Realty of Rs 700 crore. After getting feedback and suggestions from stakeholders and minority stakeholders the board of directors of the Godrej properties decided not to proceed with any further evaluation of the investment in D B Realty. The concerns raised by stakeholders are regarding the DB realty's operations and failure to make payment of loans last month," said Yash Gupta, Equity Research Analyst, Angel One Ltd. "This is very positive news for the Godrej Properties as the overhang of this DB Realty deal will be over now, investors can look to add Godrej properties at these levels as stock is trading at price to book of 4.95 times which is the lower range of last one year. We expect Q4FY22 will be a better quarter for Godrej Properties as the company has a good launch pipeline," he added. When asked whether the investment deal with DB Realty has been cancelled, Godrej Properties Ltd Executive Chairman Pirojsha Godrej replied in affirmative. “We’ve decided against going ahead post the feedback we received from various stakeholders including our minority investors,” Pirojsha told PTI. “There were concerns with the structure of the investment as well as with the slum redevelopment business in general,” he added. Godrej Properties reported an increase of 171 per cent in its consolidated net profit to Rs 38.95 crore for the third quarter ended December 2021. Profit in the year-ago period stood at Rs 14.35 crore.
Revenue from operations jumped 63.5 per cent to Rs 244 crore, compared with Rs 72.8 crore in the year-ago period.
Shares of Godrej Properties Limited zoomed 7 per cent to hit an intraday high of Rs 1,608.85 on BSE after the firm decided to cancel its plans to invest Rs 700 crore in DB Realty. On Thursday, Godrej Properties had announced that it would invest Rs 400 crore to acquire around 10 per cent stake in DB Realty and another Rs 300 crore to set up a joint platform for undertaking a slum redevelopment project. "After prolonged discussions and taking into consideration the feedback from the stakeholders and minority investors, the Board has decided not to proceed with any further evaluation of a potential investment in the equity capital of the DB Realty and the Platform," Godrej Properties said in a regulatory filing. The firm also added that the board has authorised it to engage with DB Realty with regard to the same, including to ensure appropriate and timely dissemination of this information by DB Realty Limited to its shareholders, adding that it may however continue to explore the possibility of evaluating projects with DB Realty on a case to case basis. "Godrej properties stock was down more than 16% in the last two trading sessions after the announcement of investment in DB Realty of Rs 700 crore. After getting feedback and suggestions from stakeholders and minority stakeholders the board of directors of the Godrej properties decided not to proceed with any further evaluation of the investment in D B Realty. The concerns raised by stakeholders are regarding the DB realty's operations and failure to make payment of loans last month," said Yash Gupta, Equity Research Analyst, Angel One Ltd. "This is very positive news for the Godrej Properties as the overhang of this DB Realty deal will be over now, investors can look to add Godrej properties at these levels as stock is trading at price to book of 4.95 times which is the lower range of last one year. We expect Q4FY22 will be a better quarter for Godrej Properties as the company has a good launch pipeline," he added. When asked whether the investment deal with DB Realty has been cancelled, Godrej Properties Ltd Executive Chairman Pirojsha Godrej replied in affirmative. “We’ve decided against going ahead post the feedback we received from various stakeholders including our minority investors,” Pirojsha told PTI. “There were concerns with the structure of the investment as well as with the slum redevelopment business in general,” he added. Godrej Properties reported an increase of 171 per cent in its consolidated net profit to Rs 38.95 crore for the third quarter ended December 2021. Profit in the year-ago period stood at Rs 14.35 crore.
Revenue from operations jumped 63.5 per cent to Rs 244 crore, compared with Rs 72.8 crore in the year-ago period.