Stock of this real estate company has more-than-doubled in 17 trading days

Shares of DB Realty were locked in the 5-per cent upper circuit band for a fifth straight day, at Rs 109.50 on the BSE, on Friday on the back of heavy volumes. In comparison, the S&P BSE Sensex was down 1.3 per cent at 59,181 points at 1:10 PM.

A combined 10.86 million equity shares, representing 3.8 per cent of total equity of the real estate firm, had changed hands till th time of writing of this report. Moreover, there were pending buy orders for 1.66 million shares on the NSE and BSE, the exchange data showed.

In the past one week, the stock has rallied 27 per cent, after media reports suggested that Adani Realty is in advanced talks for a merger with the Mumbai-based DB Realty.

After its merger with Adani Realty, DB Realty, which is a listed company, will be renamed as Adani Realty. Adani might infuse more funds into DB Realty, which would do a fresh equity issuance to the new investor, The Hindu BusinessLine reported on September 11.

Meanwhile, since August 23, i.e. in 17 trading days, the market price of DB Realty has appreciated by 106 per cent from a level of Rs 53.10 on the BSE. The stock had hit a 52-week high of Rs 133.85 on February 14, 2022, and a 52-week low of Rs 25.10 on September 21, 2021, the exchange data shows.

DB Realty is engaged primarily in the business of real estate construction, development and other related activities. The company is also engaged in the redevelopment projects / slum rehabilitation projects in Mumbai and dwellers therein.

During the FY 2021-22, DB Realty issued convertible warrants to the Promoter and investors (non promoters) to raise capital of approx Rs 1,544 crore upon full conversion of the warrants into equity shares. Non-promoter investors included Rakesh Jhunjhunwala's Rare Investments, Rekha Jhunjhunwala, Lotus Family Trust, KIFS Dealers, Aditya Chandak and Abhay Chandak.

The main objective of the fund raising exercise was to reduce debt, to meet funding requirements of its various projects of the company/its subsidiaries/ joint ventures (JVs) or partnership firms (in which the Company is a partner), to meet working capital requirements, to strengthen financial position and for general corporate purposes.

DB Realty in its FY22 annual report said that the company continued to look for strategic investment/ joint ventures/tie-ups for various projects with various other real estate developers. The company is looking to monetize its vast land bank and foresees to follow the JV / Joint Development strategic route for its ongoing / upcoming projects in the near future.