Rakesh Jhunjhunwala’s mid-cap realty stock jumps 5 per cent following a significant disinvestment; resulting gaining Rs 231.42 crore from the transaction!

It is worth noting that Rekha Jhunjhunwala and Rare Enterprises jointly hold a substantial 3.98 per cent stake in DB Realty, equivalent to 2,00,00,000 shares of the company

The NSE benchmark Nifty 50 index exhibited a remarkable surge over three consecutive days, culminating on Monday. However, Tuesday witnessed a brief moment of profit booking as the index experienced a modest decline of 0.25 per cent, placing it just below the pivotal 19,400 mark. Notably, the 20-Day Moving Average (20-DMA) has emerged as a formidable resistance level, presently situated at the 19,404 threshold.

The performance of the Nifty 50 hinges on its ability to maintain a position above this critical level. Should it successfully do so, the bulls will retain the upper hand, ensuring the continuity of the prevailing uptrend. However, any failure to sustain this level may result in an extended period of profit booking. Despite the mild turbulence faced by the flagship index, the broader markets are displaying resilience, with the Nifty Mid-Cap and Small-Cap indices witnessing a consistent influx of buying interest.

Speaking of buying interest, one mid-cap stock has garnered significant attention recently. This particular stock is associated with the late Shri. Rakesh Jhunjhunwala's wife and has surged by nearly 5 per cent, marking a fresh 52-week high on the stock exchange.

The stock in question is DB Realty, and its impressive performance is evidenced by heightened trading volumes. Even at the early hours of Tuesday's trading session, trading volumes have already surged to over 21 lakh shares, compared to the 30-day average volume of 16.29 lakh shares.

So, what's driving this remarkable upswing in DB Realty's stock price? The catalyst behind this surge is the execution of a Share Purchase Agreement on November 6, 2023. As per this agreement, DB Realty is set to divest its entire 100 per cent stake in equity and preference shares in Real Gem Buildtech Private Limited ("RGBPL") for an approximate consideration of Rs. 231.42 crores. The purchaser in this transaction is Kingmaker Developers Private Limited ("KDPL"), a company affiliated with the Rustomjee Group. Consequently, RGBPL will cease to be a wholly-owned subsidiary of DB Realty. In light of these developments, the previously filed Scheme of Arrangement by RGBPL with the National Company Law Tribunal, Mumbai Bench, for the transfer of the "Rustomjee Crown" project will be rendered redundant and subsequently withdrawn. RGBPL will soon initiate the necessary proceedings to formalize this change.

It is worth noting that Rekha Jhunjhunwala and Rare Enterprises jointly hold a substantial 3.98 per cent stake in DB Realty, equivalent to 2,00,00,000 shares of the company. Over the past year, the Realty stock has demonstrated an impressive gain of 82 per cent, reflecting a highly favorable trajectory amidst these strategic developments.

Disclaimer: The article is for informational purposes only and not investment advice.