D-Mart's Radhakishan Damani buys 8.8-acre mixed use plot from CCI for Rs 500 cr

MUMBAI: D-Mart founder Radhakishan Damani has bought an 8.8-acre parcel close to Sanjay Gandhi National Park from CCI Projects for over Rs 500 crore, two people aware of the development said.

CCI Projects, an associate company of Cable Corporation of India, was earlier looking to develop this land on its own. It will now use funds from this sale to pay the Rs 360 crore it owes Indiabulls Housing Finance, the persons cited earlier said, requesting not to be named.

The land is part of 22 acres owned by Cable Corporation of India, which had mortgaged the entire plot to Indiabulls Housing Finance for a residential-led mixed-use project. The funds remaining after payment to Indiabulls Housing Finance will be used to complete the proposed project, sources said.

Email queries sent to Cable Corporation, Damani and Indiabulls Housing remained unanswered as of press time.

Last month, Noida-based real estate developer Logix Group had raised Rs 540 crore from IndusInd Bank through a lease rental discounting transaction on two of its commercial office space projects. Funds raised through this exercise were also to be utilised to provide exit to existing lender Indiabulls Housing Finance.

Over the last few months, Indiabulls Housing has exited from several of its large loans for projects such as One BKC in Mumbai, Vatika Mindscapes in New Delhi, RMZ Centennial and Nxt in Bengaluru, and Chennai’s Ozone TechnoPark.

In the backdrop of increasing preference for alliances and joint development of land holdings, this will be one of the few instances of an outright purchase.

Over the last couple of years, several realty developers have reworked their business strategies to focus on asset-light models, such as joint development to reduce upfront capital cost and cope with liquidity pressure.

CCI Projects had started phase I of the project in early 2015 and it was expected to be completed in 36 months. As part of the plan, a residential complex was to be followed by retail, entertainment, commercial and hospitality units. The group had planned to invest Rs 1,000 crore in the project which would accommodate about 8,000 people in the residential zone, with a larger transient population in the commercial, retail and cultural zones. It could not be ascertained whether CCI Projects would now go ahead with the previously stated plan.

Billionaire Damani recently bought 270,000 shares of VST Industries at an average price of Rs 4,259.99. According to media reports earlier this month, Damani may be looking to raise Rs 5,870 crore through sale of 5.2% in Avenue Supermarts, owner of the DMart brand. Damani, who sold about 1% earlier this year, has to sell more shares before the end of March to meet a minimum requirement for public float, the reports said.