Jhunjhunwala’s RARE Investments to invest in DB Realty post walk out by Godrej Properties

Four days after Godrej Properties aborted plans to invest in DB Realty, RARE Investments, promoted by billionaire investor Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala will step in to invest in the company through issue of warrants convertible into equity shares.

Mumbai-based property developer DB Realty will issue 5 crore convertible warrants to six non-promoter investors. Of this, 2 crore warrants will be allotted to Rekha Jhunjhunwala and RARE Investments in equal share.

Abhay Chandak and Aditya Chandak, promoters of Mumbai-based real estate entity, Chandak Group will subscribe to 2 crore warrants. The balance 1 crore warrants will be split equally between Barclays Wealth Trustees and Khandwala Finstock.

Each warrant is convertible into one equity share and the conversion can be exercised at any time within a period of 18 months from the date of allotment, in one or more tranches. The company did not specify the warrant price.

Last week Godrej Properties decided not to go ahead with its planned investment in DB Realty after stakeholders and minority investors raised concerns on the deal.

Godrej Properties stock sheds nearly 10 per cent

Godrej Properties’ stock plunged 10.13 per cent in intraday on February 4, before closing 9.75 per cent down compared to the previous day.

Godrej Properties claimed to have received substantial feedback and views from its stakeholders and minority investors raising concern on the proposed transaction with DB Realty, including with respect to the structure of the deal, rationale for the investment in DB Realty and merits of investing through the platform.

On February 3, Godrej Properties said it planned to pick up 10 per cent stake in DB Realty for ₹400 crore. The two companies also separately agreed to set a special purpose vehicle to undertake slum rehabilitation and MHADA redevelopment projects.

Godrej Properties was to subscribe to warrants convertible into equity shares aggregating to approximately 10 per cent of the issued and paid-up capital of DB Realty. The warrants were expected to be subscribed to on or before September 2023. The conversion into equity shares would have happened in various tranches within the maximum period of 18 months.