Indiabulls Real Estate divests remaining commercial assets to Blackstone for Rs 4,420 crore

Indiabulls Real Estate has signed a term sheet agreement with Blackstone Group Inc to offload its remaining 50 per cent stake for about Rs 4,420 crore.

Indiabulls said the aim is to "embark on a clear and simple path to achieve zero net debt in the current financial year through strategic divestment of its stakes in certain commercial and leasing business assets".

At the end of the last financial year 2018-19, the company's total net debt stood at Rs 4,590 crore. Blackstone had concluded a similar deal for 50 per cent of the portfolio for nearly Rs 4,750 crore in March 2018, making it one of the country's largest such transactions in real estate.

"Subject to execution of agreements and customary closing conditions, the proposed divestment is expected to be completed very soon," it said in regulatory filings at stock exchanges.

The deal is part of the Indiabulls Group's plan to exit real estate and focus on financial services. It is seeking to merge Indiabulls Housing Finance with Lakshmi Vilas Bank. In June, the Competition Commission of India (CCI) approved the proposed merger plan.

Reports say the move will give Blackstone control of a five million square feet portfolio, including several marquee properties like One Indiabulls and Indiabulls Finance Centre in Mumbai's Lower Parel and Prabhadevi areas, two in Gurugram and one in New Delhi.

Blackstone had fully acquired the Indiabulls' Chennai commercial property separately for about Rs 850 crore last year. It is expected to add the assets acquired from Indiabulls Real Estate to the portfolio of Embassy Office Parks Real Estate Investment Trust, its joint venture with Bengaluru-based realty developer Embassy Group.

Blackstone -- the US-based private equity, alternative asset management and financial services firm -- has emerged as the most aggressive institutional investor in India's real estate sector with a commitment of over 5.3 billion dollars (about Rs 38,000 crore) in property markets of Mumbai, Noida, Pune, Bengaluru, Chennai and Hyderabad.