Indiabulls Real Estate dips 13% on MIDC order to vacate land in Nashik

The realty firm believes that the said order to be unlawful and was evaluating legal options to defend itself, including filing of an appeal in Court.

Shares of Indiabulls Real Estate tanked 13 per cent to Rs 102.70 on the BSE in Wednesday's intra-day trade after Maharashtra Industrial Development Corporation (MIDC) directed the company to vacate the land area admeasuring 512.068 hectors (approximately 2,500 acres) in processing zone of Special Economic Zone (SEZ) at Sinnar, Nashik district, Maharashtra, within one month of receipt of order.

Indiabulls Real Estate in an exchange filing said the company believes this order to be unlawful and is evaluating legal options to defend itself/seek redressal against the said unlawful order, including filing of an appeal before appropriate authorities or court(s), and shall take all desirable actions in the matter.

At 12:56 pm; the stock was trading 10 per cent lower at Rs 105.80, as compared to 0.26 per cent decline in the S&P BSE Sensex. The average trading volumes at the counter jumped three-fold with as many as 35.11 million equity shares changing hands on the NSE and BSE.

Indiabulls Industrial Infrastructure Limited (IIIL) a subsidiary of the company, had in August 2007 entered into a Share Purchase Agreement (SPA) with MIDC which allowed IIIL to enter into lease deeds with MIDC on approximately 2,500 acres of land situated in Nashik. The land was to be developed as industrial plots within the SEZ framework. IIIL has paid a premium of Rs 67.7 crore to MIDC for the said land.

While IIIL was in the process of planning and conducting further development on the Land, MIDC has issued a termination notice purporting to terminate the Lease Deed based on an alleged lapse by the company with respect to completing development and rehabilitating PAPs within the stipulated timelines. The company believes this notice to be unlawful and is evaluating legal options to defend itself / seek redressal against the unlawful termination, Indiabulls Real Estate said in its FY23 annual report.

The concerned authority i.e. Executive Engineer, MIDC, fixed the matter for hearing on 05 February 2024, wherein the company and IIIL presented the matter before the Executive Engineer on merits and the matter was reserved for passing necessary orders.

While IIIL was in the process of planning and conducting further development on the land at SEZ and submitted a preliminary proposal of revival plan, on without prejudice basis, with MIDC, and was expecting a favorable order of such hearing, the MIDC has issued the vacation order, directing the Company and IIIL to vacate the land area within one month of receipt of order, Indiabulls Real Estate said in an exchange filing.