INDIA BUSINESS WORLD - JANUARY 16^th - JANUARY 31^st - 2008

INDIABULLS BUYS DLF'S STAKE IN KENNETH BUILDERS

Indiabulls is learnt to have acquired DLF's stake in Kenneth Builders and Developers (KBD), which was formed as a 50:50 joint venture by the two companies in 2006. According to sources familiar with the matter, DLF has sold its 50% stake in the company to Indiabulls for about Rs 500 crore. The figure could not be independently confirmed.

When contacted, DLF group executive director Rajeev Talwar declined to comment. However, industry sources confirmed the transaction, without disclosing the financial details. "It is a friendly transaction and has been done in the best interest of the stakeholders of both the companies. While DLF has booked a decent premium in the project over the last couple of years, it gives a significant foothold to Indiabulls in Delhi," he said.

At present, KBD has just one ongoing project in a prime South Delhi locality, near Okhla, where it is developing a high-end residential project. The 35.8 acres for the project was awarded to the JV company for Rs 450 crore through a competitive bid by the Delhi Development Authority in early 2006. Subsequently, the JV had bid for 3-4 more projects in Delhi and had also announced plans to bid for commercial and residential projects in other parts of the country.

For Indiabulls, an entry into the booming real estate market of the national capital region (NCR) has been a top priority for sometime now. According to sources, for the last 6-8 months, the company has been scouting for viable land deals in the NCR, mainly in Delhi and Gurgaon. Through its various subsidiaries, Indiabulls is already developing some projects in the NCR, in Gurgaon and Sonepat. However, the project, because of being located within the national capital territory (NCT) could potentially be the financial conglomerate's signature property in North India. The company has a strong presence in the Mumbai real estate market as well as some other parts of Maharashtra. Seeing the growth potential in the sector, Indiabulls had demerged its real estate business in February last year.

Sources say that for DLF, it is a timely exit from the project, and the proceeds would be used for part financing some other ambitious ventures that the real estate giant has undertaken in the national capital. This includes the super-luxury apartments that the company is developing in the upmarket Greater Kailash locality of South Delhi and an integrated project, which it plans to launch in west Delhi, at the land that the company bought from DCM Shriram Consolidated (DSCL) earlier this year. The company is also on an aggressive buying spree in some areas on the outskirts of Delhi, such as Najafgarh.