Embassy Developments Limited has announced the sale of its entire equity stake in wholly owned subsidiary Sepset Real Estate Limited to Pen India Limited for a cash consideration of INR 100 crore. The transaction was formalized through a Share Purchase Agreement entered into on April 11, 2026, and is expected to complete within 60 days subject to fulfillment of conditions precedent.

Transaction Overview

The sale involves 100% of the equity share capital of Sepset Real Estate Limited, which owns the commercial project 'Mega Mall' located in Jodhpur, Rajasthan. The transaction includes all assets and liabilities of Sepset, including unsold inventory. Upon completion, Sepset will cease to be a subsidiary of Embassy Developments Limited.

Financial Performance of Sepset

During the financial year ended March 31, 2025, Sepset Real Estate Limited's financial contribution to Embassy Developments' consolidated figures was relatively modest. The subsidiary generated turnover of INR 18.55 crore, representing 0.85% of the company's consolidated turnover. However, Sepset reported a negative net worth of INR (-) 114.07 crore, which represented (-) 1.22% of Embassy Developments' consolidated net worth.

Strategic Rationale

Embassy Developments Limited has positioned this transaction as part of its continued focus on active portfolio management and disciplined capital allocation. The company expects the monetization of this asset to unlock value and strengthen its balance sheet. The proceeds from the sale will enable redeployment of capital into core markets and high-growth opportunities, supporting long-term value creation and enhancing returns for shareholders.

Transaction Structure

The purchaser, Pen India Limited, does not belong to the promoter, promoter group, or group companies of Embassy Developments Limited. The transaction does not fall within the ambit of related party transactions and is being undertaken outside the purview of a Scheme of Arrangement. The aggregate cash consideration of INR 100 crore will be received in one or more tranches, subject to applicable withholding taxes as specified in the transaction documents.

Regulatory Compliance

The company has confirmed that Sepset does not meet the threshold limits of "Undertaking" under Section 180(1)(a) of the Companies Act, 2013, and Regulation 37A of the SEBI LODR Regulations. Accordingly, the provisions of Regulation 37A are not applicable to this transaction. The disclosure has been made in compliance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Embassy developments has informed stock exchanges that its equity shares have been moved to enhanced surveillance measures following significant price movements, while simultaneously reporting record quarterly business performance.

Surveillance Action Implementation

Effective April 10, 2026, the company's equity shares have been moved from IBC Stage 0 to IBC Stage 1 under the Additional Surveillance Measure (ASM) Framework. This action was taken by both BSE Limited and National Stock Exchange of India Limited due to an upward price variation exceeding 25% over five trading sessions.

The company noted that the upward movement reflects strong investor and shareholder confidence in its fundamentals and outlook. Under the current framework, shares will be traded once a week as a temporary surveillance measure aimed at ensuring orderly market conduct.

Record Financial Performance

Despite the surveillance action, Embassy Developments reported exceptional business performance for Q4 FY26, achieving its highest-ever quarterly pre-sales. The company filed its Q4 and FY26 operational update with stock exchanges on April 9, 2026.

During Q4 FY26, the company strengthened its launch pipeline with RERA registration for Embassy Serenity, Alibaug (Phase I), and recorded strong market response to launches of Embassy Citadel, Worli and Embassy Verde 2, Bengaluru.

Legal Proceedings Update

The NCLAT hearing regarding the Corporate Insolvency Resolution Process (CIRP) matter was scheduled for April 10, 2026. However, the respondent's counsel requested an adjournment, which was granted by the Hon'ble NCLAT with an observation that no further adjournment shall be sought by the respondents. The matter has been rescheduled for April 17, 2026.

Company's Financial Position

Embassy Developments management has reiterated several key points regarding its current status:

• The stay granted by NCLAT continues to be in force • The company is not subject to CIRP under the Insolvency and Bankruptcy Code • The matter relates to an exposure of approximately ₹370 crore, which is limited when viewed against the company's net equity base • The company has no debt-obligation, with documents relating only to a contingent equity infusion obligation as a secondary obligor • Operations continue in the normal course with the company remaining financially sound

The company emphasized that it is not undergoing Corporate Insolvency Resolution Process and continues to remain financially sound and fully operational, with the impugned NCLT order remaining stayed by the NCLAT.