Aurum PropTech Limited has successfully completed the acquisition of PropTiger Marketing Services Private Limited in a strategic move to strengthen its position in the PropTech sector. The transaction, valued at INR 86.45 crore, was executed through a share swap mechanism, marking a significant development in the Indian real estate technology landscape.

Transaction Details

The Board of Directors of Aurum PropTech, in a circular resolution passed on September 25, approved the allotment of 42,42,537 fully paid-up equity shares to REA India Pte Limited, Singapore. The shares, with a face value of INR 5 each, were issued at a price of INR 203.77 per share, including a premium of INR 198.77.

This preferential allotment gives REA India a 5.54% stake in Aurum PropTech post-transaction. The newly issued shares will rank pari-passu with the existing fully paid equity shares of Aurum PropTech in all respects.

About PropTiger

PropTiger Marketing Services Private Limited, incorporated on January 3, 2014, is a key player in the PropTech sector. The company specializes in providing property consultancy, counselling, advisory, and marketing services. For the financial year ended March 31, PropTiger reported a turnover of INR 85.35 crore.

Strategic Rationale

The acquisition aligns with Aurum PropTech's strategy to deepen its existing PropTech ecosystem. By integrating PropTiger's services and expertise, Aurum PropTech aims to enhance its offerings in the real estate technology space.

Regulatory Approvals

The transaction received several key approvals:

1. Shareholder approval through a special resolution at an Extra-Ordinary General Meeting held on August 21.
2. In-principle approval from both BSE Limited and the National Stock Exchange of India Limited on September 24.

Lock-in Period

The securities allotted on a preferential basis will be subject to lock-in restrictions as prescribed under Chapter V of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.

Market Impact

This acquisition represents a significant consolidation in the Indian PropTech sector. As Aurum PropTech integrates PropTiger's operations, the combined entity is expected to leverage synergies to provide enhanced services to the real estate market.

The transaction underscores the growing importance of technology-driven solutions in the real estate industry and positions Aurum PropTech to capitalize on the evolving market dynamics in the PropTech space.

Aurum PropTech Limited has reaffirmed its share price of INR 203.77 for its upcoming preferential issue, despite a lower valuation derived from the discounted cash flow (DCF) method. This development comes as part of the company's strategic move to acquire PropTiger Marketing Services Private Limited.

Preferential Issue Details

The preferential issue involves 42,42,537 equity shares to be allotted to REA India Pte Limited, Singapore. This issuance is a crucial component of an all-stock strategic equity swap aimed at acquiring 100% of PropTiger Marketing Services Private Limited from REA.

Valuation Addendum

In a recent disclosure under Regulation 30 of SEBI's Listing Obligations and Disclosure Requirements, Aurum PropTech revealed that the registered valuer had issued an addendum to the original valuation report. The addendum confirmed the previously determined share price of INR 203.77 per equity share for the preferential issue.

DCF Valuation Insights

The registered valuer's addendum highlighted an interesting point:

• Using the discounted cash flow (DCF) method, the company's value per share was found to be lower than the price determined under SEBI's preferential issue pricing regulations.
• Despite this finding, the valuer chose to retain the original valuation from the previous report.

Impact on Shareholders

The company emphasized that the addendum has no impact on the special resolution already passed by shareholders. The preferential issue had received the following approvals:

• Board approval
• Shareholder approval at an Extraordinary General Meeting

Transparency Measures

In a move towards transparency, Aurum PropTech has made both the valuation report and the addendum available on its website at https://www.aurumproptech.in/investor/preferential-issue .

Conclusion

This development underscores the complexities involved in corporate valuation and preferential share issuances. While the DCF method suggested a lower valuation, Aurum PropTech's decision to maintain the original share price for the preferential issue aligns with regulatory requirements and shareholder approvals. As the company moves forward with its acquisition plans, investors and market watchers will likely keep a close eye on the execution and potential impacts of this strategic move.