DB Realty board to meet on Feb 9 to review existing corporate structure

We will continue our efforts to have a very strong balance sheet, increase land bank and property development options, and deepen and broaden our partnerships with large real estate developers," said Shahid Balwa, Vice Chairman and Managing Director of DB Realty said in a statement on January 31.

Listed real estate firm DB Realty announced on February 5 that its board will meet on February 9 to review the existing corporate structure consisting of real estate and hotel/hospitality business segments.

The announcement by the company said that the board will review the existing corporate structure and seek in-principle approval of the Board for corporate restructuring including but not limited to the demerger of hotel/hospitality business to unlock growth and value creation for all stakeholders.

Promoter history

DB Realty once known to be among the top real estate companies had a tough time after the 2G spectrum scandal broke in 2011.

The promoters of the firm namely Vinod Goenka and Shahid Balwa were sent to jail, but after a seven-year legal battle, both Goenka and Balwa were acquitted due to lack of evidence. However, amid this several projects of the company became stalled with lenders turning away.

Hotels and hospitality

The company has been trying to revamp itself by partnering or monetising its assets for the last couple of years. On January 31, 2024, while announcing its results the company said that it has partnerships with Adani Property, Godrej, Prestige Estate and Man Infra for ongoing development of 16 million sq ft of residential, hotel, and commercial properties etc.

The group also has interests in the hotel and hospitality business with 500 key hospitality assets acquired in Q3FY2024 giving it an incremental operating revenue of Rs 96 crore. The consolidated net profit for Q3FY24 was reported to be Rs 463 crore against a loss of Rs 632 crore in Q3FY23.

"We have pivoted on several fronts in the last few quarters, such as raising equity capital and reducing debt, and entering into long-term partnerships with strong real estate brands. We will continue our efforts to have a very strong balance sheet, increase land bank and property development options, and deepen and broaden our partnerships with large real estate developers," Shahid Balwa, Vice-Chairman and Managing Director of DB Realty said in a statement on January 31.

Meanwhile, the company in September 2023, had announced that it had raised Rs 1,544 crore by way of preferential issue of 25.75 crore convertible warrants to promoter group/non-promoter (investors) in two phases in February and March 2022 in compliance with Securities and Exchange Board of India (SEBI).

DB Realty raises Rs 1,544 crore by convertible warrants, plans to monetise land

All convertible warrants have been converted into equity shares in compliance with SEBI Regulations, DB Realty said in a statement on September 18. The statement added, "Apart from Promoter Group viz. Goenka Family Trust and SB Fortune Realty Pvt Ltd, non-promoter investors were allotted equity shares of the company at the relevant time and their holding on a fully diluted basis on conversion."

Pinnacle Investments (a partnership firm registered in India and represented through its Managing Partner - Razack Family Trust through its trustee Irfan Razack) (partners in the firm are Razack Family Trust and Venkata Narayana Konanki) were given 17.94 percent equity shares. Further, Rekha Jhunjhunwala and RARE Investments were allotted 2 percent shares.