Nam Estates-Embassy One merger faces delay, says Indiabulls Real Estate

Shares of Indiabulls Real Estate Limited (IBREL) on Tuesday fell over 19 per cent after the real estate developer announced that the sanction to the merger of NAM Estates Private Limited and Embassy One Commercial Property Developments Private Limited into the company has been withheld by National Company Law Tribunal (NCLT), Chandigarh Bench.

Shares of Indiabulls Real Estate tanked 19.98 per cent to settle at Rs 55.34 apiece on the BSE. On the NSE, it fell sharply by 20 per cent to finish at Rs 55.40 per piece — its lower circuit limit.

The company’s market valuation fell Rs 748.59 crore to Rs 2,997.63 crore.

“IBREL strongly believes that these objections and concerns were unfounded, unjustified and do not impact the merger in a significant manner and had accordingly addressed the same before the NCLT,” the company said in the regulatory filing.

“The Company will await the detailed order to further evaluate the next steps and shall explore all options, including filing an appeal against the order of NCLT, Chandigarh Bench, before the National Company Law Appellate Tribunal (NCLAT) at the earliest,” the statement added.

The company said in BSE filing, “The merger already stands sanctioned by NCLT, Bengaluru Bench, which has jurisdiction over NAM Estates and Embassy One, on 22 April 2022. However, the NCLT, Chandigarh Bench, which has jurisdiction over IBREL, had earlier raised certain concerns based on the objections cited by the Income Tax department to the merger.  

The merger has already received overwhelming support from 99.9987 per cent of its shareholders who voted on the same and has also received approval from other regulators. IBREL’s board shall be meeting over the next day to chalk out its plan and strategy to move forward and shall communicate the same to all its stakeholders, the statement added.

At present, Embassy Group has around 14 per cent stake in IBREL and the same will increase to 45 per cent after the merger of assets of these two companies.

Post-merger, the combined entity will have 80.8 million square feet of launched and planned development potential. The merged entity will have about 30 projects.

Under the terms of the agreement, IBREL's shares are valued at Rs 92.5 per share.

IBREL has a land bank of 3,280 acre, near major metropolitan cities. It has a presence in six cities -- Delhi-NCR, Mumbai Metropolitan Region (MMR), Jodhpur, Vadodara, Vizag and Indore.

(With agencies input)