Hubtown Limited , a prominent player in the real estate sector, has made a strategic move to strengthen its position in the bus terminal infrastructure business. The company has signed Share Purchase Agreements to acquire additional stakes in four of its subsidiary companies, marking a significant development in its corporate structure and resolving long-standing legal disputes.

Key Highlights of the Acquisition

• Total Investment: Hubtown Limited will invest Rs. 16.00 crores to increase its stakes in four subsidiary companies.
• Subsidiaries Involved: The acquisition targets Hubtown Bus Terminal companies in Adajan, Ahmedabad, Mehsana, and Vadodara.
• Increased Control: The transaction will boost Hubtown's voting control from 45% to 55% in three of the companies, making them subsidiaries.
• Legal Resolution: The deal settles five ongoing litigations with GVFL Trustee Company Private Limited, pending since 2015.

Breakdown of the Acquisition

Financial Performance of Acquired Entities

The four bus terminal companies have shown varying financial performances in the recent fiscal year:

• Combined Turnover: Rs. 4,830.38 lakhs
• Individual Performances:
  • Adajan: Rs. 526.38 lakhs
  • Ahmedabad: Rs. 687.88 lakhs
  • Mehsana: Rs. 3,284.05 lakhs
  • Vadodara: Rs. 332.07 lakhs

Strategic Implications

This acquisition aligns with Hubtown Limited's core business of real estate construction and development of residential and commercial premises. By increasing its stakes in these bus terminal companies, Hubtown is poised to strengthen its foothold in the infrastructure development sector, particularly in Gujarat.

Transaction Details

• Payment Method: The acquisition will be completed through installments via cheque.
• Completion Timeline: The final payment is scheduled for February 2, 2026.
• Regulatory Approval: No governmental or regulatory approvals are required for this acquisition.

Impact on Corporate Structure

Post-acquisition, three of the four companies will become subsidiaries of Hubtown Limited, as the voting control increases to 55%. This change in corporate structure is expected to give Hubtown more operational control and strategic flexibility in managing these assets.

Conclusion

This strategic move by Hubtown Limited not only expands its portfolio in the bus terminal infrastructure segment but also resolves long-standing legal issues, potentially paving the way for smoother operations and growth in the future. The acquisition reflects the company's commitment to strengthening its presence in key infrastructure projects across Gujarat.

Hubtown Limited has made significant moves in both its equity allocation and financial backing for its subsidiary. The real estate developer has recently allocated shares to investment funds and provided a substantial corporate guarantee, showcasing its strategic financial maneuvers.

Share Allocation to Abakkus Funds

Hubtown has allocated a total of 7.34 lakh shares, equally distributed between two investment funds:

• Abakkus Diversified Alpha Fund: 3.67 lakh shares
• Abakkus Diversified Alpha Fund-2: 3.67 lakh shares

This allocation demonstrates investor interest in Hubtown and could potentially strengthen the company's capital structure.

Corporate Guarantee for Subsidiary

In a separate development, Hubtown has taken steps to support its wholly-owned subsidiary, Twenty Five Estates Realty Private Limited, through corporate guarantees:

• A corporate guarantee of up to Rs. 96.00 crores has already been provided to MITCON CREDENTIA TRUSTEESHIP SERVICES LIMITED.
• An additional corporate guarantee of up to Rs. 26.00 crores is in process.

These guarantees are to secure the issuance of Non-Convertible Debentures (NCDs) by Twenty Five Estates Realty Private Limited.

Key Details of the Corporate Guarantee

The company has stated that these transactions involve the promoter/promoter group, as Twenty Five Estates Realty Private Limited is a wholly-owned subsidiary of Hubtown Limited.

This dual action of share allocation and providing financial backing to its subsidiary indicates Hubtown's active approach to capital management and support for its group companies. Investors and market watchers may want to keep an eye on how these moves impact Hubtown's financial position and growth strategies.