Ace investor Rakesh Jhunjhunwala’s portfolio has a number of multibagger stocks that have delivered excellent returns to shareholders. DB Realty is one such stock that has witnessed a strong rally in the past week, with its stock price gaining 25% during this period. The realty stock has been hitting upper circuit for the fourth consecutive session after it won a legal battle regarding the title of a land owned by it in Mumbai.
DB Realty has given phenomenal returns in the last one year. The multibagger stock has surged 550% in the past 11 months, from its 52-week low of ₹16.85 on April 23, 2021, to ₹110.05 in intraday today on the BSE. It has rallied 336% over a six-month period and 124% on year-to-date basis by hitting consecutive upper circuits from January 28 to February 14 on fundraising announcement.
The smallcap stock hit the roof of 5% today and was locked at ₹110.05 on the BSE. The market capitalisation of the company surged to ₹2,677.06 crore. The stock traded nearly 18% lower than its 52-week high of ₹133.85 touched on February 14, 2022.
The recent rally in this real estate stock is due to fundraising activities that will provide sufficient liquidity to implement its business plans. The appreciation in the share price was also attributed to a favourable ruling in the Supreme Court with regards to the title of a land owned by it Mumbai.
As per the company, Esteem Properties Private Ltd., a wholly-owned subsidiary of DB Realty, owned around 22,000 square meters of land at village Sahar, adjoining ITC Grand Maratha Hotel, Andheri (East), Mumbai, which was subject to litigation. In May 2010, the Mumbai High Court had ruled against Esteem, which was challenged before the Supreme Court. On February 28, the apex court ruled in the favour of the company and allowed its subsidiary to develop this land in Mumbai.
“Pursuant to the above decision of the Hon. Supreme Court, freehold vacant land admeasuring approx. 22,000 sq. mts., situated in the commercial zone is now available to Esteem [Properties] for development. The company intends to develop the subject land into a 2.00 million sq feet (leasable area) grade A office space in the next three years,” DB Realty said in an exchange filing on February 28.
Last month, the company’s board approved the raising of funds through issue of 5 crore warrants convertible into the equivalent number of equity shares of the face value of ₹10 each to non-promoter investors on a preferential basis. This was announced days after Godrej Properties withdrew its plan to invest ₹400 crore in DB Realty for about 10% stake after brokerages – ICICI Securities and CLSA – cut its stock price targets, calling the proposed deal as “unwarranted”.
The warrants, which are subject to shareholders and regulatory approvals, will be issued to non-promoter investors such as RARE Enterprises, Rekha Jhunjhunwala, KIFS Dealers, Aditya Chandak and Abhay Chandak. The company proposed to issue 10 million warrants to Rekha Jhunjhunwala and 10 million warrants to Rakesh Jhunjhunwala's RARE Enterprises. The Jhunjhunwala family currently owns 2.06% stake in the company, as per the company's December shareholding.
The company is convening an extraordinary general meeting today to obtain shareholders' approval for the issue of these warrants.
