A day after real estate firm Godrej Properties announced its plans to 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 slum redevelopment projects in Mumbai, the company's board on Friday decided not to proceed with the investment plan.
"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 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 authorized it to engage with D B 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.
Mumbai-based Godrej Properties Ltd (GPL), one of the leading developers in the country, had plans to invest a total of Rs 700 crore in DB Realty in the form of warrants convertible into equity shares and the setting up of a special purpose vehicle as a joint venture to undertake slum rehabilitation and MHADA (Maharashtra Housing and Area Development Authority) redevelopment projects.
The equity platform had also stated earlier that it act as a strategic special purpose vehicle providing GPL with ROFR (Right of First Refusal) for all slum rehabilitation and MHADA redevelopment projects to be identified by DB across Mumbai under a 50:50 equity partnership with 10 per cent development management fees to GPL.
Meanwhile, shares of Godrej Properties Limited tanked over 10 per cent to hit an intraday low of Rs 1502.35 on BSE on Friday post the investment announcement. The stock has been falling for the last 2 trading sessions.
The stock opened 9.4 per cent lower at Rs 1,511 against the previous close of Rs 1,669.25. With a market capitalisation of Rs 42,281 crore, the shares stand lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
Godrej Properties has a major presence in Mumbai region, Pune, Bengaluru and Delhi-NCR.
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