Phoenix Mills Limited (PML) has announced a significant strategic move to consolidate its ownership in Island Star Mall Developers Private Limited (ISMDPL), a material subsidiary of the company. The Board of Directors of PML has approved a framework agreement to acquire Canada Pension Plan Investment Board's (CPP Investments) 49% equity stake in ISMDPL for Rs 5,449.16 crores.

Transaction Details

The transaction, subject to shareholder approval and necessary regulatory clearances, will be executed over a period of three years in four tranches. Upon completion, PML will increase its shareholding in ISMDPL from 51% to 100%, making it a wholly-owned subsidiary.

Financial Implications

The consideration will be paid through various modes, including:

• Declaration of dividends by ISMDPL
• Share buyback
• Selective capital reduction
• Direct acquisition of equity shares

This strategic move is expected to be earnings-accretive for PML, strengthening its position in India's competitive commercial and retail real estate market.

ISMDPL Portfolio

ISMDPL, along with its subsidiaries, owns and manages four marquee retail destinations with a combined Gross Leasable Area (GLA) of approximately 4.4 million square feet. These include:

• Phoenix MarketCity Bangalore
• Phoenix Citadel in Indore
• Phoenix Mall of the Millennium in Pune
• Phoenix Mall of Asia in Bengaluru

Additionally, ISMDPL has recently completed two Grade A office developments totaling around 2.2 million square feet in Bengaluru and Pune.

Q1 FY2026 Financial Highlights

Alongside this announcement, PML released its Q1 FY2026 financial results:

Management Commentary

Shishir Shrivastava, Managing Director of Phoenix Mills Limited, stated, "This transaction allows us to consolidate full ownership of a portfolio of high-quality, retail-led mixed-use assets across key Indian cities. ISMDPL has grown into a strong platform with scale, stability, and clear visibility for future growth."

The company expects the completed office portfolio to start contributing to EBITDA from FY2026, with upcoming phases becoming operational between 2026 and 2027.

Future Outlook

PML anticipates that this consolidation will drive sustained EBITDA growth and strong cash flows while maintaining a healthy leverage profile. The transaction is aligned with the company's strategic vision to strengthen its position in India's commercial and retail real estate development market.

As Phoenix Mills continues to expand its portfolio and consolidate its holdings, investors and industry observers will be watching closely to see how this move impacts the company's long-term growth trajectory in the competitive Indian real estate sector.

Phoenix Mills Limited (PML), a leading retail-led mixed-use developer in India, has reported robust financial results for the first quarter and announced a significant strategic move to acquire full ownership of its subsidiary, Island Star Mall Developers Private Limited (ISMDPL).

Q1 Financial Highlights

For the quarter ended June 30, Phoenix Mills reported:

• Consolidated revenue from operations of Rs. 953.00 crore, up 5% year-over-year
• Consolidated EBITDA of Rs. 564.00 crore, a 6% increase from the same quarter last year
• Net profit after tax and share in profits of associates at Rs. 320.86 crore, growing 2% year-over-year

The company's core businesses, comprising retail, office, and hotel segments, showed steady growth:

• Revenue from core businesses reached Rs. 881.00 crore, up 4% from the previous year
• EBITDA from core businesses stood at Rs. 544.00 crore, a 2% increase year-over-year

Retail Segment Performance

The retail segment continued to be a strong performer for Phoenix Mills:

• Retail consumption grew by 12% to Rs. 3,588.00 crore
• Retail rental income increased by 4% to Rs. 506.00 crore
• Retail EBITDA rose by 4% to Rs. 535.00 crore

Strategic Acquisition of ISMDPL

Phoenix Mills announced its decision to acquire the remaining 49% stake in ISMDPL from Canada Pension Plan Investment Board (CPP Investments). Key details of the transaction include:

• Total consideration of approximately Rs. 5,449.00 crore
• Payment to be made over 36 months in four tranches
• Post-completion, PML will hold 100% ownership of ISMDPL

The ISMDPL platform includes:

• Operational retail Gross Leasable Area (GLA) of ~4.4 million sq ft
• Completed office GLA of ~2.2 million sq ft
• Ongoing and planned expansions at Phoenix MarketCity Bangalore

Management Commentary

Shishir Shrivastava, Managing Director of Phoenix Mills, stated, "This transaction allows us to consolidate full ownership of a portfolio of high-quality, retail-led mixed-use assets across key Indian cities. ISMDPL has grown into a strong platform with scale, stability, and clear visibility for future growth."

Future Outlook

The acquisition is expected to be earnings-accretive from the first year itself. Phoenix Mills anticipates significant EBITDA growth from ISMDPL over the next 4-5 years, driven by:

1. Leasing of completed offices
2. Ramp-up in retail occupancy and rental increases
3. Re-leasing at higher rents through churning and premiumization of Phoenix MarketCity Bangalore
4. Activation of under-construction and planned assets
5. Phased development of balance FSI

Conclusion

Phoenix Mills' strong quarterly performance, coupled with the strategic acquisition of ISMDPL, positions the company for continued growth in the retail-led mixed-use development sector. The full integration of ISMDPL into PML's portfolio is expected to enhance the company's market presence and financial performance in the medium to long term.