Shares of Indiabulls Real Estate plunged nearly 20 percent in Tuesday's trade after the company announced that the merger of Nam Estates Private Limited and Embassy One into the company has been withheld by the Chandigarh Bench of the National Company Law Tribunal (NCLT).

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The stock was trading 17.28 percent lower at Rs 57.21 apiece on the BSE during noon deals. The shares fell 20.68 percent in the last one week, while on a year-to-date-basis, it was down 33 percent.

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IndiaBulls said that the merger already stands sanctioned by the NCLT, Bengaluru Bench, which has jurisdiction over NAM Estates & Embassy One, on April 22, 2022. "However, the Hon’ble NCLT, Chandigarh Bench, which has jurisdiction over IBREL, had earlier raised certain concerns based on the objections cited by Income Tax department to the merger," the company said in a BSE filing.

IBREL says that it strongly believes that these objections and concerns were unfounded, and unjustified and do not impact the merger in a significant manner and had accordingly addressed the same before the NCLT. The company will await the detailed order to further evaluate the next steps and shall explore all options, including filing an appeal against the order of the NCLT, Chandigarh Bench, before the NCLAT at the earliest.

The merger has already received support from 99.9987 percent of its shareholders who voted on the same and has also received approval from other regulators. IBREL’s board shall be meeting over the next few days to chalk out its plan and strategy to move forward.

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Indiabulls Real Estate first announced its proposed merger with the entities of the Embassy Group in January 2020. The merger is via a cashless structure where NAM Estates and Embassy One Commercial Property Developments the 2 subsidiaries of Embassy Group, will swap shares with IBREL. The resulting combined entity is to be named Embassy Developments. Embassy Group will become the promoter of the merged entity.

Merger with Embassy is in the final stages of NCLT review. The next hearing, which will be in Chandigarh, has been scheduled on March 1, 2023, Indiabulls Realty said in its Q3 results investor presentation. In February IndiaBulls Real Estate said its MD Mehul Jhonson has resigned and has been replaced by Sachin Shah as the Executive Director for a term of five years.

First Published:May 9, 2023 2:32 PM IST