After Godrej withdraws, DB issues similar quantum of warrants to Rakesh Jhunjhunwala and others. However, with a significant difference.

After days of Godrej Properties getting forced to withdraw from it’s proposed strategic partnership with DB Realty (DBR), the  latter gets support from the ace investor, Rakesh Jhunjhunwala (RJ’s) and others.

Key points to note –

  • DBR was issuing 5 crore equity warrants to GP. The same quantum now will be instead issued to the following –
    • 2 crore warrants – equally divided between Rekha Jhunjhunwala and Rare Investments (related to RJ)
    • 2 crore warrnts – equally divided between Abhay Chandak and Aditya Chandak (promoter family of Chandak Real Estate)
    • 0.5 crore warrants – Lotus Family Trust represented by Barclays Wealth Trustees
    • 0.5 crore warrants – KIFS Dealers, a related entity of Khandwala Finstock
  • There is however a significant difference here compared to what was offered to GP.
    • GP had a right to subscribe to these warrants by September 2023 and if subscribed would have paid 25% at the time of subscription and balance 75% over another 18 months at the time of conversion of the warrants into equity.
    • In current case, allotment of warrants is immediate after shareholder approval (proposed on March 4, 2022). Therefore, 25% will come immediately and balance 75% at the time of conversion over next 18 months.
  • Price of the warrants have not been disclosed and it will be in line with regulatory calculations.

After GP’s withdrawal, DBR has quickly found an alternative to keep the market excited – atleast for the short term.

It’s also worth noting here that RJ already owns 2.06% of DBR and given the amounts involved and his overall net-worth, it would not have been a difficult decision for him to provide the subject funding and keep everyone guessing.

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Pavneet Singh
Pavneet Singh
3 months ago

nicely explained Nitin,
if i am correct another Board Meeting approval in March and by the time the 6 months avg price would shoot up to 80 odd (issue price) , incase price shoots to 200+
5crs. X Rs.80/-
so the Pref issue : out of 400 crores, 100 crores immediately to be paid, a 6month-1 year grind before the next leg up beyond castles in air
is my expectation

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