Thread by @jeevanpatwa

#IBullreal – top pick in the sector. Brand, Balance sheet, execution and access to low cost funds will drive value for the combined entity

Post merger, #Embassy will own 45% and Blackstone 10%. This will create institutional platform for investment in real estate sector and

combined entity will be one of the largest real estate companies in India.

In terms of valuation, 18000 cr net surplus, 2000 acres of land valued around 8-10 crs per acre, 1400 crs SEZ land, 42 Mn sq ft commercial space (potential of generating 4200 crs rentals) available at EV

of # 15000 crs. More importantly, with Embassy+Blackstone brand, execution capability and access to institutional money will re-rate the stock to earnings based multiple rather than asset based valuation.

Concerns –
-If Merger doesn’t happen – Currently only NCLT approval is

pending which is expected to complete by Feb 22. In worst case scenario, even if merger doesn’t materialize, operating control will remain with Embassy as it holds 14% while Mr Gehlot 11% in the company

-Mr. Gehlot sold in the market in Mar 21 – this was to raise 200 Mn GBP

which was used to buy assets from the company and reduce debt

-Concentrated commercial holding in Banglore (42 Mn sq ft) – Banglore has seen 17 Mn sq ft sale of commercial real estate at the peak. Currently Blackstone, Embassy REIT and Embassy are top 3 players in Blore

commercial space. Ticket size also gone up from 0.5 Mn sq ft to 1.5 Mn sq ft recently