Oberoi Realty to Sell 21.74% Stake in I-Ven Realty to Alpha Wave Ventures for Rs 1,250 Crore Amid Financial Restructuring

Oberoi Realty, a prominent real estate company in India, has announced its decision to divest a 21.74% stake in I-Ven Realty to Alpha Wave Ventures II, LP, for an aggregate consideration of Rs 1,250 crore. The transaction was approved by the board of directors of Oberoi Realty and will be formalized through a Securities Subscription Agreement (SSA) between Oberoi Realty, Alpha Wave Ventures II, LP, Vikas Oberoi, and I-Ven Realty.

Details of the Transaction

Under the terms of the agreement, Alpha Wave Ventures II, LP will subscribe to (i) 2,77,778 Series A Compulsorily Convertible Preference Shares (CCPS) at a price of Rs 44,999.964 per share, and (ii) 10 Class A equity shares at a nominal price of Rs 10 each. This transaction will result in Alpha Wave Ventures acquiring a 21.74% stake in I-Ven Realty on a fully diluted basis.

I-Ven Realty is a joint venture company, with its shares currently held equally between Oberoi Realty and Vikas Oberoi. The investment from Alpha Wave Ventures II is expected to bring in substantial financial support and strategic backing for the company's future expansion plans.

Restructuring and Fund Allocation

In alignment with the agreement, I-Ven Realty will undertake a restructuring of its financial structure. The restructuring will include a rights issue of redeemable preference shares at an issue price of Rs 400 per share. These preference shares will be subscribed by the company and Vikas Oberoi in equal proportion, in one or multiple tranches.

The funds raised from this restructuring initiative will primarily be used to repay outstanding loans and to redeem existing preference shares that were previously issued. This move is aimed at improving the financial stability of I-Ven Realty and enhancing its capital structure to support its business operations more efficiently.

Subscription of Redeemable Preference Shares

As part of the financial restructuring, the board of I-Ven Realty has also approved a subscription plan of up to 41,25,000 redeemable preference shares for a total subscription amount of Rs 165 crore. This measure is expected to reinforce the financial position of the company while simultaneously addressing any outstanding liabilities.

Strategic Implications

This divestment by Oberoi Realty comes at a time when the Indian real estate sector is witnessing increasing investments from global private equity players and venture capital firms. The entry of Alpha Wave Ventures II into I-Ven Realty is a testament to the growing attractiveness of the Indian real estate market for international investors.

Oberoi Realty has a track record of developing high-end residential and commercial projects, and this transaction is expected to provide additional capital that could be reinvested into its core business segments. Furthermore, by restructuring I-Ven Realty’s financials and bringing in a strategic investor, the company aims to create long-term value for its stakeholders.

With this major stake sale, Oberoi Realty is taking a strategic step towards optimizing its investment portfolio while strengthening I-Ven Realty’s financial standing. The investment from Alpha Wave Ventures II is expected to bring in not just financial resources but also strategic guidance that can help I-Ven Realty scale its operations efficiently.

As the real estate industry continues to evolve, such investments indicate confidence in India's property market and its potential for sustained growth. Moving forward, this transaction will be closely monitored by industry experts, given its significance in shaping the future trajectory of Oberoi Realty and I-Ven Realty.