Sharemasterindia.com: Indiabulls Real Estate shares jumped as much as 16.5 per cent on Monday following promoter Sameer Gehlaut's announcement about fund infusion in the realty developer.
Mr Gehlaut will infuse Rs 538 crore in Indiabulls Real Estate via preferential issue and warrants at a price of Rs 67 per share, which is at a premium of 59 per cent of Friday's closing price of Rs 42.05 on the Bombay Stock Exchange.
Reasons for the sharp jump in Indiabulls Real Estate shares:
1) Mr Gehlaut's stake in Indiabulls Real Estate will rise to around 40 per cent from current 27 per cent post the equity infusion. When a promoter increase stake in his company, it is viewed positively by investors and construed as a sign that the promoter is confident about the company.
2) The infusion will be used to pare Indiabulls Real Estate's debt of around Rs 5,500 crore. Global investment bank Macquarie said this infusion will have a positive impact on Indiabulls Real Estate.
In a statement to the BSE, Indiabulls Real Estate said, "The move is part of effort for augmenting the long-term resources of the company for meeting funding requirements for its business purposes and also reflects the confidence that the promoters have."
The shareholders' approval for the proposal would be sought during the meeting on July 20.
As of 09.42 a.m., Indiabulls Real Estate shares traded 9.4 per cent higher at Rs 46 as compared to 1.1 per cent gain in the realty sub-index of the BSE.
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