Shares of Indiabulls Real Estate soared 42.5 per cent on the BSE to ₹150.90 intraday, as the company announced plans for restructuring of its commercial business.

Trading ban drags OI The stock finally settled at ₹148.15, up 39.96 per cent on the BSE. As the stock is in the futures and options segment, it does not attract any circuit breaker. On the NSE, the stock closed at ₹148.20. However, it shed 1.55 crore shares or 39.72 per cent in open interest (OI) positions, as it continues to remain under trading ban, where only unwinding of open positions are allowed.

The company plans to hive off its commercial real estate business into a separate venture, Indiabulls Commercial Assets Ltd (ICAL), it said in a notification to the exchanges.

The residential business will continue to operate under Indiabulls Real Estate.

The eventual plan is to create a separate entity for the commercial and leasing business and target listing the same at a later date. The company will also be looking at getting a foreign investor/PE fund to participate in the equity of ICAL, the statement added.

Marquee deals In the recent past, there have been some marquee deals in this space. Government Investment Corporation (GIC) of Singapore recently took a stake in the commercial real estate business of DLF while Blackstone bought into K Raheja Corp.

Most large global investors have preferred to participate in the commercial/leasing market in India as the retail space has been going through a very sluggish phase with tepid demand. “Markets are expecting value discovery for Indiabulls Real Estate through this move as was evident from the stock rallying by over 30 per cent during the day,” said Abhishek Lodhiya, Analyst at Angel Broking.

Value for shareholders According to a Chennai-based market observer, the company is creating value for its shareholders by demerging its various business verticals. According to him, the group initially started off with Indiabulls Financial Services that was mainly focussing on stock market broking activity. It then hived off its real estate arm to form Indiabulls Real Estate and the broking business to form Indiabulls Securities.

“Since then, it has been merger, demerger and reverse-merger of various entities for Indiabulls group companies and most of the restructuring has resulted in enhancing investors’ wealth,” he added.

The power and infrastructure business of Indiabulls group was hived off in July 2014 and rechristened as RattanIndia Power and RattanIndia Infrastructure. Later, Rajiv Rattan bought out the shares of other promoters in the power and infrastructure businesses.

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