NewsCorporate ActionsHubtown Limited Unveils Ambitious Merger Scheme and Provides Rs. 96.00 Crore Corporate Guarantee for SubsidiaryHubtown Limited Unveils Ambitious Merger Scheme and Provides Rs. 96.00 Crore Corporate Guarantee for Subsidiary
Hubtown Limited has approved a Scheme of Arrangement involving multiple entity mergers, set to take effect from July 1, 2025. The restructuring will consolidate luxury real estate projects, including '25 South' and '25 Downtown' in Mumbai. Post-merger, Hubtown anticipates pre-sales of Rs. 6,000.00 crore for the current financial year. The promoter stake is expected to increase from 35.02% to 63.38%. Additionally, Hubtown has provided a corporate guarantee for its subsidiary's Rs. 96.00 crore debenture issue.
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Hubtown Limited , a prominent player in the Indian real estate sector, has announced a significant corporate restructuring plan that promises to reshape its market position and financial outlook. The company's Board of Directors has approved a comprehensive Scheme of Arrangement involving multiple entities, with an eye on consolidating its luxury real estate portfolio and boosting pre-sales figures. Additionally, Hubtown has provided a corporate guarantee for its subsidiary's debenture issue.
Key Highlights of the Merger Scheme
Multi-Company Amalgamation: The scheme involves the amalgamation of Distinctive Realty Private Limited and Nitant Real Estate Private Limited with Amazia Developers Private Limited, which will subsequently merge with Hubtown Limited.
Effective Date: The scheme is set to take effect from July 1, 2025, subject to necessary regulatory approvals.
Regulatory Approvals: The merger requires green lights from stock exchanges, the National Company Law Tribunal (NCLT), and shareholders.
Strategic Asset Consolidation: Post-merger, Hubtown will gain majority stakes in Twenty Five South Realty Limited and Twenty Five Downtown Realty Limited, developers of luxury residential projects in Mumbai.
Financial Implications and Share Exchange Ratio
Pre-Sales Target: Following the amalgamation, the Hubtown Group anticipates pre-sales of approximately Rs. 6,000.00 crore during the current financial year.
Share Exchange Ratio:
- 16 Hubtown shares for every 1 share of Nitant Real Estate
- 5,558 Hubtown shares for every 1 share of Amazia Developers
Promoter Shareholding: The promoter stake is expected to increase from 35.02% to 63.38% post-scheme implementation.
Corporate Guarantee for Subsidiary's Debenture Issue
In a separate development, Hubtown Limited has provided a corporate guarantee to MITCON CREDENTIA TRUSTEESHIP SERVICES LIMITED for securing Non-Convertible Debentures up to Rs. 96.00 crores. These debentures are to be issued by its wholly-owned subsidiary, Twenty Five Estates Realty Private Limited. The guarantee will be recorded as a contingent liability in Hubtown's books. This arrangement involves specific terms and conditions outlined in the Deed of Guarantee and Debenture Trust Deed.
Luxury Project Portfolio
The merger brings two high-profile luxury residential projects under Hubtown's direct control:
- '25 South' at Prabhadevi: A super-luxury residential project developed by Twenty Five South Realty Limited.
- '25 Downtown' near Willingdon Golf Club, Mahalaxmi: Another premium residential development by Twenty Five Downtown Realty Limited.
Project 25 Downtown Details
| Feature | Description |
|---|---|
| Location | Mahalakshmi, South Mumbai, adjacent to Willingdon Golf Club |
| Ownership | 75% stake owned by 25 South Realty Limited |
| Development Area | Approximately 18 acres under MCGM's Urban Renewal Scheme |
| Free Sale Component | 5.5 acres |
| Residential Space | 3.7 million square feet of ultra-luxury apartments |
| Apartment Sizes | 3,400 to 25,000 square feet |
| Tower Configuration | 5 residential towers and 1 office/commercial tower |
| Project Status | 3 out of 5 residential towers have received MahaRERA approval |
| Construction Progress | Bookings commenced for approved towers; construction begun on free sale portion |
| Rehabilitation Progress | Over 40% of overall rehabilitation obligations completed |
| Amenities | 3 swimming pools, 10+ event hosting spaces, 2 cinemas, gym facilities, sports courts |
| Design | Architect Hafeez Contractor and interior designer Bill Bensley |
Strategic Rationale
Hubtown's management views this merger as a strategic move to:
- Enhance the company's investment profile by aligning high-potential real estate assets with its broader business platform.
- Strengthen its position in the luxury real estate segment in Mumbai.
- Achieve administrative and operational rationalization, promoting organizational efficiencies and economies of scale.
- Optimize resource utilization and reduce overheads by eliminating duplication of activities.
Market Impact and Future Outlook
The amalgamation is poised to significantly bolster Hubtown's market standing, particularly in the premium real estate segment. With the integration of these luxury projects, the company is positioning itself to capitalize on the increasing demand for high-end residential properties in Mumbai's prime locations.
Investors and market watchers will be keen to observe how this corporate restructuring translates into tangible financial results, particularly in achieving the ambitious Rs. 6,000.00 crore pre-sales target. The success of this merger could set a precedent for further consolidation in the real estate sector, especially in the luxury segment.
As the scheme progresses through various regulatory stages, all eyes will be on Hubtown Limited to see how effectively it leverages this expanded portfolio to drive growth and shareholder value in the competitive Mumbai real estate market.
Historical Stock Returns for Hubtown
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -1.15% | +2.88% | +9.27% | +71.87% | +23.28% | +2,597.32% |
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