Indiabulls Real Estate promoters have sold around 12 percent stake in the company to Embassy group on Friday as the Indiabulls Group wants to focus on core financial services business, Ajit Mittal, executive director of the group, told CNBC-TV18.
Mittal further said that there was no demand from the Reserve Bank of India to sell the stake in the group’s real estate business. The banking regulator is yet to grant its approval to Indiabulls Housing Finance’s proposed merger with Lakshmi Vilas Bank.
Indiabulls Group said it has started the process of volunteer amalgamation with Lakshmi Vilas Bank and the merger will be completed in next 9-12 months. The merger will be subject to approval from RBI, National Company Law Tribunal and the Competition Commission of India, among others.
“Our Group has predominantly been a financial services group. Real estate was a latter-day entry. So we want to focus on the financial services part and 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,” said Mittal.
Embassy group plans to buy up to 28 percent stake in Indiabulls Real Estate eventually, Jitendra Virwani, chairman and managing director, Embassy group, told CNBC-TV18, adding that the company will try to synergise both businesses between Embassy and Indiabulls and take the company forward.
Virwani added that the Indiabulls Real Estate deal will be funded through the company’s own funds.
“We were at the right time in the right place. As far as Indiabulls is concerned, they needed to exit realty business and I think there wasn’t anybody who would turn things around as fast as we could turn the things around. It synergises the business we have, it gives us a great platform in Bombay and in the NCR area where we have been trying to make in-roads for a long time,” said Virwani.