Godrej Properties Ltd. has decided to cancel the proposed deal with DB Realty Ltd. amid investor concerns, reflected in Friday's stock plunge.
The company received "substantial feedback and views" from its stakeholders and minority investors raising concern on the proposed transaction, Godrej Properties said in an exchange filing. Taking that into consideration, the board has decided "not to proceed with any further evaluation of potential investment in the equity capital of DB Realty and the Platform".
The decision to abandon the deal is aimed at allaying fears after brokerages including CLSA, Jefferies and JPMorgan called it "unwarranted" and "surprising". Shares of Godrej Properties hit the 10% lower circuit on Friday morning.
The developer planned to invest an aggregate amount of Rs 400 crore to buy around 10% stake in DB Realty via convertible warrants. The proposed partners then would have brought Rs 300 crore each to redevelop slums in Mumbai.
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