Hubtown Limited (“HL” or “Transferee Company”) is primarily engaged in the business of construction and development of residential and commercial premises, Build Operate Transfer (BOT) Projects, etc., either directly and/or through its subsidiaries / joint ventures / associate companies. The equity shares of the Transferee Company are listed on the National Stock Exchange of India Limited as well as BSE Limited.
In 2024, the Company raised circa INR 1200 crore through preferential issue of Equity shares, compulsory convertible debentures and convertible warrants of the Company. In addition, recently, it announced preferential allotment of INR 500 crore. The primary intent is to repay existing debt.
Saicharan Consultancy Private Limited (“SCPL”) is engaged in the business of making strategic investments and providing advisory services. SCPL is a group company, which is being jointly controlled by persons forming part of the Promoter and Promoter Group of HL.
25 West Realty Private Limited (“25 WRPL”) is primarily engaged in real estate business of construction and development of residential and commercial premises through both – on its own and through its subsidiaries / joint ventures / associate companies. The equity shares of 25 WRPL are held by the promoters of HL.
Amazia Developers Private Limited (“ADPL”) is a group company, which is being jointly controlled by persons forming part of the Promoter and Promoter Group of HL. ADPL is primarily engaged in the real estate business of construction and development of residential and commercial premises through both – on its own and through its subsidiaries/joint ventures/associates companies. The equity shares of ADPL are held by the promoters of HL.
Distinctive Realty Private Limited (“DRPL”) is a wholly-owned subsidiary of ADPL primarily engaged in the business of developing, building and construction of residential, commercial and industrial premises.
Nitant Real Estate Private Limited (“NREPL”) is a group company, which is being indirectly controlled by persons forming part of the Promoter and Promoter Group of HL. NREPL is primarily engaged in the business of developing, building and construction of residential, commercial and industrial premises. The equity shares of NREPL are held by the promoters of HL.
The Proposed Transaction
HL announced multiple schemes through which it will consolidate promoter owned various real estate projects with HL.
Through a first scheme in February 2025, the Board of Directors of Hubtown Limited considered and approved the Scheme of Arrangement under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 in the nature of merger of Saicharan Consultancy Private Limited a group company, which is being jointly controlled by persons forming part of the Promoter and Promoter Group of Hubtown Limited, with Hubtown Limited and their respective shareholders and creditors with effect from the Appointed Date of April 01, 2025.
Through a second scheme in June 2025, the Board of Directors of HL have considered and approved the Scheme of Arrangement under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 in the nature of merger of 25 West Realty Private Limited, a group company, which is being jointly controlled by persons forming part of the Promoter and Promoter Group of Hubtown Limited, with Hubtown Limited and their respective shareholders and creditors with effect from the Appointed Date of April 01, 2025.
Through third scheme in August 2025, the Board of Directors of HL have considered and approved the Scheme of Arrangement under Sections 230 to 232, Section 66 and other applicable provisions of the Companies Act, 2013 (“Act”) involving merger of Distinctive Realty Private Limited into and with Amazia Developers Private Limited and merger of Amazia Developers Private Limited & Nitant Real Estate Private Limited into and with Hubtown Limited. The appointed date for this merger will be 1st July 2025.
Rationale for the schemes
All transferor companies are group companies, which are being jointly controlled by persons forming part of the Promoter and Promoter Group of HL.
For merger of SCPL:
SCPL is being jointly controlled by persons forming part of the Promoter and Promoter Group of the Transferee Company. SCPL holds 21.17% of equity shares in Rare Townships Private Limited (“RTPL”), which is a subsidiary of HL due to HL holding 66.93% of equity shares in RTPL.
RTPL is currently constructing and developing a real estate project, namely “Rising City”, located at Ghatkopar. The said project is envisioned as a premium real estate development, strategically located in a rapidly growing area with excellent connectivity and infrastructure. Given its prime location, modern amenities, and well-planned design, the project is expected to attract significant demand from homebuyers and investors alike. The development is poised to contribute positively to the overall growth of RTPL by enhancing its market presence and strengthening its financial position. With increasing real estate demand in Mumbai, coupled with the project’s high-quality construction and strategic positioning, Rising City is projected to generate substantial financial returns for RTPL.
For merger of 25 WRPL:
25 WRPL is currently developing a super-luxury residential project known as ’25 West’ located at Bandra (West). The said project is envisioned as a premium high-end residential development, strategically located in a prime area of Mumbai, offering modern amenities and unobstructed views of the Bandra-Worli Sea Link, the Arabian Sea and the Mahim Bay. In light of its prime location and design attributes, the project is expected to attract significant interest from homebuyers and investors thereby contributing meaningfully to the growth trajectory, market standing and financial position of the Transferor Company.
For merger of ADPL & DRPL & NREPL:
The Companies collectively hold the entire equity stake in Twenty Five South Realty Limited (“TFSRL”), which is currently developing a super-luxury residential project named ’25 South’ located at Prabhadevi, Mumbai. TFSRL further holds 75% equity stake in Twenty Five Downtown Realty Limited (“TFDRL”) which is currently developing a super-luxury residential project named ’25 Downtown’ located adjacent to the Willingdon Golf Club, Mahalaxmi. The balance 25% equity stake in TFDRL is held by Hubtown Limited.
The Appointed Date for the merger of SCPL & 25 WRPL means the opening business hours of April 01, 2025 or such other date as the Hon’ble NCLT may allow or direct. For the merger of ADPL, DRPL & NREPL, the appointed date will be 1st July 2025.
Consideration for the scheme
In June 2024, before the preferential allotment to public shareholders and issuance of warrants to promoters, the promoter stake in HL was 46.60%. There are a number of allotments and transactions which shall change the shareholding of HL as follows:
- Pursuant to the preferential allotment to public shareholders, promoter stake went down from 46.60% to 28.81%.
- For the merger of SCPL with HL, HL will issue and allot 648 equity shares of face value of INR 10/- each for every 1 fully paid-up equity share of face value of INR 10 each of SCPL.
- Thereafter, HL has also issued Warrants to members forming part of the Promoter and Promoter Group and Compulsorily and Mandatorily Convertible Debentures issued to members forming part of the Public Shareholders.
- Upon merger of 25 WRPL with HL, HL will issue 42 equity shares of face value of INR 10/- each for every 1 fully paid-up equity share of face value of INR 10/- each of 25 WRPL. As all shares will be issued to the promoters of HL, the equity shareholding of the promoters will increase.
- Upon merger of DRPL with ADPL, no consideration will be discharged as DRPL is a wholly owned subsidiary of ADPL. Upon merger of ADPL with HL, HL shall issue and allot 6,203 equity shares of face value of INR 10/- each of HL, for every 1 fully paid-up equity shares of face value of INR 10/- each of ADPL and for merger of NREPL with HL, HL shall issue and allot 16 equity shares of face value of INR 10/- each of HL for every 1 fully paid-up equity shares of face value of INR 10/- each of NREPL.
In August 2025, HL also announced the issuance of 1,46,80,249 fully paid-up equity shares by way of a preferential basis for a consideration of circa ₹500 crore to public shareholders.
In all, the promoter’s stake in June 2024 was around 46.60%. Post preferential allotment and various schemes, their stake will go up to 66% post implementation of all three schemes and the proposed preferential allotment of ₹500 crore.
Accounting Treatment for three schemes
As all entities are having common control, HL shall account for the merger in its books as per applicable accounting principles prescribed under Appendix C to Indian Accounting Standard (Ind AS) 103 “Business Combinations” prescribed under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 read with relevant clarifications issued by the Ind AS Transition Facilitation Group (ITFG) of the Institute of Chartered Accountants of India and other generally accepted accounting principles in India
HL shall, upon the Scheme coming into effect and with effect from the Appointed Date, record all the assets, liabilities and reserves, if any, of all transferor entities vested in it pursuant to this Scheme at the respective book values thereof appearing in the books of transferor entities.
The difference, if any, between the amount recorded as total share capital issued by the Transferee Company (viz. aggregate face value of HL New Shares issued) and the amount of share capital of respective Transferor Companies shall be transferred to capital reserve (i.e. debited or credited, as the case may be) and such capital reserve shall be presented separately from other capital reserves with disclosure of its nature and purpose in the notes.
Financials & Valuation
Almost all these entities are either holding companies to the entities in which the project is being executed / the project is yet to be commenced/ recently commenced, hence there is no revenue in these entities.
Largely, the consolidation entities are bigger than the valuation fetched by HL and as result, the promoter stake is getting increased significantly or getting more than doubled.
Conclusion
With marquee projects consolidated under one listed entity, reduced debt levels and fresh capital, Hubtown Limited is signalling a decisive comeback. The promoter group, whose shareholding had been diluted through capital raising, is now consolidating its stake via mergers of its private vehicles into the listed entity. Only time will tell whether the proposed restructuring has set the stage for Hubtown 2.0 or will minority shareholders still need to wait for value creation. HL has got some more associate companies which if consolidated probably get large land bank in and around /Mumbai and will be more value accretive in the long term.
]]>