Indiabulls-Embassy merger a strategic decision for both: Embassy's Virwani
The merger between Indiabulls Real Estate and Embassy is a strategic decision for both companies, said Jitendra 'Jitu' Virwani, Chairman and Founder of the Embassy Group.
In an interview with IANS, billionaire Virwani said that Embassy is predominantly Bengaluru-based while Indiabulls has a 95 per cent residential asset base.
"I feel the merger benefits both companies - by allowing Indiabulls to participate in the fast-growing commercial market of Bengaluru and for Embassy, as it allows us to build a pan-India presence," he said.
Virwani said the combined entity will have access to the major Tier-I markets of NCR, MMR and Bengaluru as well as strategically important Tier-II cities and will have a very balanced mix of both commercial and residential assets.
"The combination also provides us scale and creates one of the leading real estate platforms in the country with Rs 10,700 crore of surplus from launched projects, 80.8 million sq ft of saleable/leasable area and an additional monetisable land bank of 3,300 acres in NCR, MMR, Nashik and Chennai," he said.
Virwani said that on receipt of all approvals and once the merger is complete, certain Embassy Group entities shall become the new promoter entities and the existing Indiabulls promoters will seek to declassify themselves as promoters.
On the consolidation trends in the real estate industry, Virwani said: "We believe that there will be increasing consolidation amongst players in the real estate industry. The consolidation was limited to acquisition of distressed projects/assets by a larger well.
capitalised developer. However, we believe that in the future, consolidation will get broad-based and may happen at entity levels and even between Tier-I developers as well."
"We believe the current market dislocation will make the residential sector more organised and eliminate unwanted excessive competition. We foresee a change in the way real estate companies upgrade and conduct themselves," he added.
On the priorities as the new promoter group, Virwani said that their "immediate focus would be to generate liquidity of Rs 10,700 crore by selling near completion/ under construction inventory, which requires very little additional capital of Rs 200 crore".
"The liquidity generated will be redeployed for planned projects and other new market opportunities."
On the revival in the sector, he said investor and home buyer confidence needs to come back. "It is very difficult to exactly say how much time that will take but I am pretty sure that it will happen sooner than later," Virwani said.