D B Realty to raise Rs 1,575 cr via issue of warrants to promoters, Godrej Properties, Pinnacle Investments

In a regulatory filing, D B Realty said its board has alloted 13.05 crore warrants to its promoters and Pinnacle Investments, which is a partnership firm between Prestige group promoter Razack Family Trust and Prestige group CEO Venkata Narayana Konanki.

Mumbai-based D B Realty Ltd on Thursday said it will raise about Rs 1,575 crore through issue of warrants to its promoters as well as investors Godrej Properties and Pinnacle Investments, as part of its strategy to cut debt and spur business growth. In a regulatory filing, D B Realty said its board has alloted 13.05 crore warrants to its promoters and Pinnacle Investments, which is a partnership firm between Prestige group promoter Razack Family Trust and Prestige group CEO Venkata Narayana Konanki. As many as 3.3 crore warrants have been allotted to Pinnacle Investments and 9.75 crore warrants to promoters of D B Realty. The board also approved raising of more funds through further issue of 12.7 crore warrants, of which 5.7 crore will be to Pinnacle Investments, 5 crore to Godrej Properties and 2 crore warrants to its promoters. ''The total fund infusion into DB Realty post conversion of warrants allotted and proposed to be allotted to Pinnacle Investments, D B promoters and Godrej Properties Ltd will be approximately Rs 1575 crore,'' the filing said. Separately, Godrej Properties said it will invest around Rs 400 crore in DB Realty to pick up 10 per cent stake. Post conversion of warrants into equity shares, promoters will hold 54.08 per cent stake in DB Realty, Pinnacle Investments 17.97 per cent and Godrej Properties 9.98 per cent, the filing said. Last month, D B Realty's board approved the proposal for raising funds by way of issuance and allotment of warrants of up to 13.05 crore. The price for the first round of issue of warrants was fixed at Rs 43.15 apiece, to be converted into one equity share of Rs 10 each at a premium of Rs 33.15. The company raised Rs 563.10 crore in the first round. DB Realty share price closed at Rs 96.10 apiece on the BSE on Thursday. DB Realty had said earlier that the Rs 563 crore will be used to reduce debt, fund its various projects, meet working capital requirements, strengthen the financial position and for general corporate purposes. In Pinnacle Investments, Razack Family Trust holds 60 per cent stake and Venkata Narayana Konanki 40 per cent. The partnership firm is represented through its managing partner -- Razack Family Trust through its Trustee Irfan Razack, it added. Irfan Razack is the chairman of Bengaluru-based realty firm Prestige Estates Projects Ltd. Prestige Group and DB Realty have tied up to develop a few projects in Delhi-NCR and Mumbai Metropolitan Region (MMR) markets. Now, Godrej Properties Ltd (GPL) and D B Realty will also set up an equal joint platform of Rs 600 crore to undertake slum redevelopment projects in the Mumbai region. Shahid Balwa, MD of D B Realty, said, ''We are very excited to announce a strategic partnership with GPL, which will give D B Realty a strong platform in the Mumbai re-development space.'' He said the strategic partnership will allow the company to focus on its core strength of brownfield redevelopment and deep domain expertise to enable the SPV/GPL to undertake the actual conceptualisation, execution, marketing and financing of the projects efficiently. ''Both partners bring diverse strength to the table and this partnership will lead to immense value creation for the SPV, GPL and DB Realty,'' Balwa said. DB Realty already has a large existing relationship with Prestige Group and this new venture with the GPL will lead to immense value unlocking for the shareholders, he added.

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