Indiabulls Real Estate Ltd: Buy before the merger announcement 

CMP: Rs.52.50

Market Cap: Rs.2843 Cr

Book Value: Rs.80.47

Target: Rs.110 

Time Frame: Next Deepawali.

Introduction:  Indiabulls Real Estate Ltd is one of India's leading real estate enterprises, with a diverse presence in residential projects ranging from affordable to mid-income to premium to super-luxury segments.

Geographically, its area of operation is basically concentrated around  Mumbai Metropolitan Region (MMR) and the National Capital Region (NCR) of India. 

The Company is one of the leading real estate companies in India, with 17 ongoing projects totaling 44.59 million square feet. It also has commercial development with a leasable area of 25.5 million sq.ft. under construction.

It possesses 1424 acres of SEZ land at Nasik Maharashtra. 

The Company has delivered over 25 million square feet of commercial and residential projects through its SPVs/subsidiaries, including the renowned Indiabulls Blu Estate & Club residential towers in Worli and commercial properties One Indiabulls Centre and Indiabulls Finance Centre in Lower Parel.

Triggers:  

💥The recent appointments in the company indicate that the Embassy Group, with which the company's merger is in the final stages of National Company Law Tribunal (NCLT) evaluation, now has more authority over the company.

💥The reigns of the Indiabulls Real Estate Ltd will soon fall in the hands of a Sindhi Businessman, Jeetendra (Jeetu) Virani, the CMD of the Embassy Group.

According to the investor presentation by the company, the proposed scheme for the amalgamation of NAM Estates and Embassy One Commercial Property Developments into IBREL is underway. NCLT Bengaluru has concluded the hearing on the merger scheme.

💥After the merger, the entity will have presence in both the commercial and residential verticals in the states of Karnataka and Maharashtra. Post merger, Indiabulls Real Estate #Ltd may have a direct buyer in the form of Embassy Group, who may use those Properties for rentals.

💥Indiabulls Real Estate’s net debt as of December 31, 2022, was #NIL (debt free) and it had a cash surplus of Rs.580 crore as against a cash surplus of Rs.136 crore in the September quarter.

💥In April, 2022, Indiabulls Real Estate Ltd raised Rs.865 crore in the form of QIP at Rs.101.10, for buying land and reducing. Post that we have seen substantial reduction of debt in FY23. The fund raising resulted in an overall 15.8% dilution for the shareholders.

Going forward, the merged conglomerate will have both the scale and resources to take on bigger challenges and deliver.

💥Realty companies remain optimistic on the demand environment on the hope that the rate hike cycle might have peaked out.

💥 Meanwhile, The Mint on 14 February, 2023 wrote:

The residential real estate market in India had astounding progress in 2022, setting new sales records of 68% YoY, further demonstrating the industry's prominence as one of India's fastest-growing industries. 

After two years affected by COVID, Tier 2 and Tier 3 cities have arisen as fresh major real estate trends in 2022, and the real estate market has set unprecedented benchmarks which continued its growth momentum from 2021 amid the global slowdown.

The growing awareness of home ownership and the government’s favourable affordable housing schemes has led to significant growth in the affordable housing segment.

Conclusion: The shares of Indiabulls Real Estate Ltd, post merger will have both the residential and commercial wings.

It is one of the country's largest real estate players, with a significant footprint in and around Mumbai. Its development initiatives are in some of Mumbai's best neighborhoods, including the popular Worli. 

The company owns 1856 acres of land in Mumbai, NCR, and Chennai. The company's entire landbank is 3280 acres. 

Blu Estate & Club, Worli, Sky Forest, Lower Parel, Indiabulls Greens, Panvel, One Indiabulls, Thane, and other projects are under development by the firm.

Buy at the CMP for some stupendous returns by Deepawali.