DB Realty has successfully raised Rs 1,544 crore through a preferential issue of 25.75 crore convertible warrants to promoter groups and non-promoter investors. This issuance complies with SEBI regulations, and all the convertible warrants have been converted into equity shares. The funds raised will primarily be utilized to reduce debt, amounting to Rs 1,404 crore, including the release of contingent liabilities. DB Realty also plans to invest in new assets, meet ongoing project requirements, and support working capital needs. The company aims to become debt-free in the near future and is exploring partnerships with established real estate developers to monetize its substantial land holdings, exceeding 600 acres.
Prominent real estate developer DB Realty has achieved a significant milestone by raising a substantial amount of Rs 1,544 crore through a preferential issue of 25.75 crore convertible warrants. This financial move aligns with the company's strategy to reduce its debt and explore opportunities for land monetization.
The funds were raised through a two-phase issuance of convertible warrants to both promoter groups and non-promoter investors in February and March 2022, in compliance with the regulations set forth by the Securities and Exchange Board of India (SEBI). Notably, all convertible warrants have been meticulously converted into equity shares, in accordance with SEBI's regulations.
Apart from the promoter group, which includes entities like the Goenka Family Trust and SB Fortune Realty Pvt Ltd, non-promoter investors were also allocated equity shares during the relevant period. Their holdings, on a fully diluted basis upon conversion, have been factored into the company's financial structure.
Pinnacle Investments, a partnership firm registered in India and represented by its Managing Partner, Razack Family Trust, through its Trustee Mr. Irfan Razack, holds a substantial 17.94% equity stake. This partnership firm is comprised of the Razack Family Trust and Mr. Venkata Narayana Konanki.
Additionally, prominent investors such as Rekha Jhunjhunwala and RARE Investments have been allotted a 2% stake each. Lotus Family Trust and KIFS Dealers have received 1% equity shares each, while Abhay Chandak and Aditya Chandak hold a combined 2% stake.
The primary objective behind raising these funds is to significantly reduce the company's debt, amounting to Rs 1,404 crore, which includes the release of contingent liabilities. Furthermore, the capital will be allocated for making investments and acquiring new assets. These financial resources will also be deployed to fulfil the various requirements of ongoing projects and support the working capital needs of the organization.
Over the past year, DB Realty has actively forged partnerships, joint ventures, and arrangements with prominent players in the real estate sector, including Adani Good Homes Private Limited, Godrej Residency Private Limited, and entities within the Prestige Group. The company has strategically engaged in these collaborations to optimize its financial position and enhance its market presence.
With a clear focus on becoming debt-free in the near term, DB Realty continues to explore avenues for partnering with well-established large real estate developers. The objective is to unlock the potential of its substantial real estate holdings, which span over 600 acres, and convert them into lucrative opportunities for both the company and its investors.
In conclusion, DB Realty's successful fundraising through convertible warrants represents a significant step toward strengthening its financial position and achieving its goal of reducing debt. The company's strategic partnerships and ongoing efforts to monetize its extensive land holdings underscore its commitment to financial sustainability and value creation for stakeholders.
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