Shares of Indiabulls Real Estate surged after promoters sold around 12 percent stake in the company to Embassy group on Friday. Indiabulls Group wants to focus on core financial services business, Ajit Mittal, executive director of the group, told CNBC-TV18.

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Indiabulls Real Estate shares gained as much as 14.7 percent to Rs 151 on BSE intraday. At 9:20 am, the stock was trading 7 percent higher at Rs 140.90 per share as against a 0.13 percent fall in BSE Sensex at 39,477.

Indiabulls Group is looking to exit the real estate business so that it can get regulatory approvals for the proposed merger of Indiabulls Housing Finance with the Lakshmi Vilas Bank.

“Our Group has predominantly been a financial services group. Real estate was a latter entry. So, we want to focus on financial services-part. For us, evolution into banking is the natural frontier and it’s all in the public domain, we have kick-started the process of doing a voluntary amalgamation with Lakshmi Vilas Bank (LVB); the idea is to create a world-class bank,” Mittal added.

"Pursuant to the applicable provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform you that in line with Company’s promoters' strategy to focus on financial services in the long run, the promoters intend to dispose of up to 14 percent of the fully paid-up share capital of the Company (out of the aggregate 38.72 percent fully paid up share capital of the Company, currently held by them) to third-party investors," the company said in a regulatory filing yesterday.

Earlier, reports said that US-based investment firm Blackstone may acquire Indiabulls Real Estate's promoters' stake at an estimated enterprise value of around $1 billion. Multiple block deals were also seen in Indiabulls Real Estate in early trades today, 13.3 percent shares were exchanged. However, sources told CNBC-TV18 that Blackstone will not be directly involved in the stake deal with Indiabulls Real Estate. Blackstone, meanwhile, will fund Embassy Group for the deal.

Indiabulls Real Estate has been selling its commercial assets to Blackstone. In December 2018, it sold 50 percent stake in two office assets in Gurgaon to Blackstone at an enterprise value of Rs 464 crore.

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First Published:Jun 7, 2019 9:38 AM IST