scorecardresearchThis smallcap realty stock doubled investor wealth in 2022 despite market volatility

This smallcap realty stock doubled investor wealth in 2022 despite market volatility

Updated: 04 Mar 2022, 03:39 PM IST
TL;DR.
The smallcap stock jumped 135 percent in 2022 YTD from around 46 in December 2021 to nearly 110 currently. In comparison, the benchmark Nifty has lost 5 percent in 2022 YTD.
MMR, which covers the area of Mumbai, Navi Mumbai, Thane and Raigad, is considered one of the prime and costliest real estate markets in India (HT PHOTO)

MMR, which covers the area of Mumbai, Navi Mumbai, Thane and Raigad, is considered one of the prime and costliest real estate markets in India (HT PHOTO)

Despite a 13 percent decline in the realty sector in 2022 YTD, this real estate stock has turned into a multibagger this year.

DB Realty has jumped 135 percent in 2022 YTD from around 46 in December 2021 to nearly 110 currently. In comparison, the benchmark Nifty has lost 5 percent in 2022 YTD.

DB Realty Limited is a real estate development and construction company. The Company is engaged in the construction of residential buildings/commercial complexes and activities connected and incidental thereto. The Company focuses on residential, commercial, retail and other projects, such as mass housing and cluster redevelopment.

The recent surge in the stock comes after it won a legal case regarding the title of land owned by the company in Mumbai. The Apex court has now allowed the subsidiary of the company – Esteem Properties to develop this land in Mumbai and the firm will now develop a 2 million square feet office complex in that space. The company intends to develop the subject land into a grade A office space in the next 3 years.

"By order dated 7 May 2010, the Hon. High Court at Mumbai had ruled against Esteem. Esteem subsequently preferred an appeal against the Hon. High Court's Order before the Honourable Supreme Court,” the company said in the regulatory filing.

The firm also announced that it will allot 5 crore warrants to investors, including Rakesh Jhunjhunwala and his wife after Godrej Properties cancelled its plans to invest 700 crore in the company to pick up a 10 percent stake. The company will raise 1,575 crore through the issue of warrants in multiple tranches.

It proposed to allot 1 crore warrants each to Rekha Jhunjhunwala, Rakesh Jhunjhunwala's RARE Investments, Abhay Chandak and Aditya Chandak. It will also allot 50 lakh warrants each to Lotus Family Trust and KIFS Dealers.

As per the filing, allotment of these 5 crore warrants was in addition to 7.7 crore warrants which was already issued to promoter group and Pinnacle Investments, thus taking the total warrants issued to 12.7 crore.

"The total fund infusion into DB Realty Limited post conversions of warrants allotted and proposed to be allotted to Pinnacle Investments, DB Promoters and New Investors will be approximately 1575 crore," the filing said. The funds raised through the warrants would be utilised primarily to repay debt and augment long-term capital requirement of the company, it added.

For the December quarter, the firm reported a loss of 23.99 crore on a standalone basis. It has reduced its, losses from 244.64 crore on a QoQ basis.

"The Company reaffirms its aim to be balance sheet light and debt-free in the near term. The robust off-take in the current quarter and Pipeline of several projects planned to be launched In the current quarter and the coming quarters is indicative of a strong performance going forward," it said in the BSE filing.

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First Published: 04 Mar 2022, 03:39 PM IST