Indiabulls Real Estate posts record intra-day surge; stock zooms over 40%

The stock up 42.5% to Rs 151 on BSE in intra-day trade, also its highest level since April 20, 2011

Shares of Indiabulls Real Estate have posted a record intra-day gain, up 42.5% to Rs 150.90 on BSE, trading at its highest level since April 20, 2011.

Earlier, on May 18, 2009, the stock of real estate developer had rallied 38.5% in intra-day trade, finally settling 33.4% higher at Rs 197.50 on BSE.

The Company's board in its meeting today considered the possibility of streamlining its existing ‘residential', ‘commercial' and ‘leasing' businesses by segregating ‘commercial & leasing' business carried on by itself and/or through its SPVs and vesting the same into ‘Indiabulls Commercial Assets Ltd' (ICAL).

The restructuring/reorganizing the company’s businesses by either restructuring by way of placing ICAL as a separate holding co under the Company to hold its assets and investments relating to ‘commercial & leasing' business segment and to undertake the business & operations of ‘commercial & leasing' business segment and/or explore opportunities to bring in strategic investments; or by reorganizing its existing businesses by way of a demerger of the undertakings, business, activities & operations pertaining to its commercial & leasing business segments, it added.

As main strategy, Indiabulls Real Estate (post restructuring) will focus on growth of business through JV developments with land owners without incurring any significant upfront land acquisition costs.

Indiabulls Real Estate said this model of growth along with net debt capped at Rs 2,000 crore will allow the company (post restructuring) to have superior earnings and higher ROE from the development business going forward.

"In the recent past, there have been some marquee deals in this space. Government Investment Corporation (GIC) of Singapore recently took a stake in the commercial real estate business of DLF while Blackstone had bought into K Raheja Corp. Most large global investors have preferred to participate in the commercial / leasing market in India as the retail space has been going through a very sluggish phase with tepid demand. Markets are expecting value discovery for Indiabulls Real Estate through this move as was evident from the stock rallying by over 30% during the day." said Abhishek Lodhiya, Senior Equity Research Analyst - Infrastructure, Capital goods and Real Estate, Angel Broking.

At 03:00 pm; the stock was up 41% at Rs 150 as compared to 0.16% decline in the S&P BSE Sensex. The trading volumes on the counter surged more than 10-fold. A combined 208 million shares representing 43.5% of total equity of the company changed hands on BSE and NSE so far.

Indiabulls Real Estate trades in the futures and options (F&O) segment, which do not attract circuit limits.