Phoenix Mills , a prominent player in India's retail and commercial real estate sector, has announced a significant strategic move. The company is seeking shareholder approval for Canada Pension Plan Investment Board (CPP Investments) to exit from Island Star Mall Developers Private Limited (ISMDPL), a material subsidiary of Phoenix Mills.

Transaction Details

The proposed transaction involves CPP Investments fully exiting its 49% equity shareholding in ISMDPL. Phoenix Mills will acquire sole control of ISMDPL, making it a wholly-owned subsidiary. The deal is valued at Rs. 5,449.16 crore, to be paid in four tranches over three years.

Payment Structure

The consideration will be paid through various modes, including:

• Declaration of dividend by ISMDPL
• Buyback of shares
• Selective capital reduction
• Direct or indirect acquisition of equity shares by Phoenix Mills

To facilitate the payment, ISMDPL and its subsidiaries may undertake several transactions:

• Redemption of optionally convertible debentures in Alyssum Developers Private Limited (up to Rs. 1,000.00 crore)
• Similar redemptions in Sparkle One Mall Developers Private Limited (up to Rs. 1,500.00 crore) and Insight Mall Developers Private Limited (up to Rs. 600.00 crore)
• Collective dividend declaration up to Rs. 1,300.00 crore by these subsidiaries

Strategic Rationale

The transaction aligns with Phoenix Mills' vision to consolidate ownership in high-performing assets. Key benefits include:

• Full ownership of flagship assets across key urban markets
• Earnings accretion from the first year
• Enhanced cash flow efficiency and future optionality
• Preservation of liquidity for the company's growth plans

ISMDPL Portfolio

ISMDPL and its subsidiaries own and operate a portfolio of premium assets, including:

• Operational retail assets with a Gross Leasable Area (GLA) of ~4.4 million sq.ft.
• Completed commercial offices with a GLA of ~2.2 million sq.ft.
• Additional offices, retail expansion, and hotel development underway

In FY25, the retail portfolio generated an EBITDA of Rs. 617.00 crore.

Shareholder Approval and Voting

The e-voting period for shareholders runs from August 15 to September 13, 2025. The transaction requires approval from various regulatory bodies, including the Competition Commission of India.

Valuation and Fairness Opinion

Bansi S. Mehta Valuers LLP has determined the fair value per share of ISMDPL at Rs. 461.34. Morgan Stanley India Company Private Limited has issued a Fairness Opinion on the proposed transaction.

This strategic move by Phoenix Mills represents a significant step in consolidating its position in India's commercial and retail real estate market, potentially creating long-term value for its shareholders.

Phoenix Mills has announced a significant strategic move, acquiring Canada Pension Plan Investment Board's (CPP Investments) 49% stake in Island Star Mall Developers Private Limited (ISMDPL) for Rs 5,449 crores. This acquisition, coupled with the company's strong Q1 performance, marks a pivotal moment in Phoenix Mills' growth trajectory.

Acquisition Details

The Phoenix Mills' board has approved the acquisition of CPP Investments' 49% stake in ISMDPL, which will give Phoenix Mills 100% ownership of the platform. The transaction, valued at Rs 5,449 crores, will be payable over 36 months in four tranches, subject to shareholder and regulatory approvals.

ISMDPL Portfolio

The ISMDPL platform, which generated Rs 617 crores EBITDA in FY25, comprises:

• 4.4 million sq ft of operational retail space
• 2.2 million sq ft of completed offices
• Planned expansions including 0.8 million sq ft of retail and 1.6 million sq ft of offices
• Two hotels totaling approximately 700 keys at Phoenix MarketCity Bangalore

Strategic Rationale

Shishir Shrivastava, Managing Director of Phoenix Mills, emphasized the strategic importance of this acquisition: "This transaction fully aligns with our strategic objectives. It gives us complete control of a high-performing platform structured in a capital-efficient manner that safeguards Phoenix Mills' liquidity."

Funding Structure

The acquisition will be funded through:

• ISMDPL's cash flows
• Dividends
• Buybacks
• Available leverage headroom

Q1 Performance Highlights

Alongside this strategic acquisition, Phoenix Mills reported strong Q1 results:

Retail Portfolio Repositioning

Rashmi Sen, Whole Time Director and CEO Malls, explained the ongoing repositioning strategy: "We are undergoing a significant repositioning and premiumization change for most of our legacy assets. This gives us a beautiful opportunity to rethink and reimagine our spaces to continue providing newer experiences to our customers."

Office Portfolio Outlook

The company reported that its recently completed office spaces, totaling about 2.2 million sq ft, are currently only 6% leased. However, Phoenix Mills has set an ambitious target to achieve 90% leasing by 2026, with a strong leasing pipeline in place.

Future Outlook

Phoenix Mills remains committed to its growth strategy, with plans to expand its portfolio to 14 million sq ft of retail, 3.5 million sq ft of offices, 1,200 hotel keys, and 2.5 million sq ft of residential inventory by FY 2030.

The acquisition of full ownership in ISMDPL, combined with strong quarterly performance and ongoing portfolio optimization, positions Phoenix Mills for continued growth and value creation in the coming years.