DB Realty sets sights on strategic growth with the demerger of its hospitality arm

DB Realty’s board has in principle approved the demerger of its hospitality business, aimed at unlocking shareholder value, pursuing a focused strategy in the Indian hospitality sector, and listing the resulting company’s equity shares on BSE and NSE. With this corporate announcement stock price has surged 3.09% today.

Corporate Restructuring

DB Realty has its board meeting today where it has considered and in-principally approved the proposal to demerge its hospitality business consisting of hotel business and assets including Goan Hotels & Realty Private Limited (a wholly owned subsidiary of the Company), BD and P Hotels (India) Private Limited (a subsidiary of the Company) and Bamboo Hotel and Global Centre (Delhi) Private Limited (an associate of the Company).

The demerger will unlock the value of the real estate and hospitality business for the Company’s shareholders, enable a differentiated strategy to capture the huge potential of the Indian hospitality sector and attract a distinct set of investors, partners, collaborators and leadership talent focused on the hospitality business. It will also ensure that the real estate business remains unchanged.

On completion of the process, the equity shares of the Resulting Company are proposed to be listed on the BSE Limited and the National Stock Exchange of India Limited and the shareholders of the Company (in proportion to their shareholding in the Company) will hold a substantial stake in the Resulting Company, with the balance being held by the Company. The Board will engage professional legal advisors, registered valuers and consultants to implement the above proposal, which shall be subject to necessary statutory and shareholders’ approvals.

Intraday Performance

D B Realty Ltd started the trading day with an opening price of Rs 267.95, reaching a high of 284.8 and a low of Rs 257.65 before settling at the current market price (CMP) of Rs 275.15. Compared to the previous close of Rs 267.15, the stock witnessed a positive movement of 2.99%. The company’s stock has seen a 52-week high of 284.8 and a low of Rs 55.1, reflecting fluctuations within a significant range. With a market capitalization of Rs 13833.31 crore, D B Realty Ltd demonstrates notable activity in today’s trading session, showcasing resilience and potential for further movement.

The technical analysis suggests a compelling long consolidation breakout scenario for the stock, with nearly two years of consolidation ending potentially in August. Utilizing the 10-week exponential moving average (EMA) as an entry indicator, traders may consider entering the stock when it touches the EMA or retraces to around Rs 222. Moreover, the significant increase in volume activity underscores bullish sentiment for the long term, indicating heightened investor interest and potential upward momentum.

Furthermore, the stock exhibits robust relative strength compared to the Nifty 500 index, outperforming it by 2.5 times. This suggests the stock’s resilience and potential for continued growth compared to the broader market. Examining the stock’s performance over various timeframes reveals impressive gains, with increases of 53.43% over the past three months, 285.98% over the past year, and multibagger returns of 1376.68% over the past three years, indicating sustained bullish momentum and favourable prospects for future price appreciation.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.