Real estate developer DLF Ltd will invest approximately ₹3,750 crore to acquire a majority stake in a proposed joint venture (JV) with Everstone Group. The two partners will use the venture to invest in real estate company IREO Group and its Indian entities.
Gurugram-based IREO Group owns substantial land parcels at strategic locations across Delhi-NCR and several other cities. DLF had previously acquired a large land parcel in Gurugram from the group.
In a regulatory filing on Friday, DLF announced that it had entered into a binding agreement with Everstone Group to “strategically collaborate and form a joint venture (JV) to invest in IREO Pvt Ltd and other group companies in India held by the IREO group of FDI funds (IREO Funds), with investments from reputed global investors.”
Under the proposed arrangement, DLF “intends to invest about Rs 3,750 crore for a majority stake in the JV, which will hold economic interest in the IREO India companies.”
However, Everstone Group has not disclosed the amount of its proposed investment.
Separately, the parties have signed a binding and exclusive term sheet with the IREO Funds. Under the agreement, the proposed JV intends to invest in the IREO India companies to acquire a stake of at least 20%, along with certain governance-related rights.
Following the proposed transaction, the JV will hold an overall economic interest of approximately 40% in the IREO India companies, while the IREO Funds will retain the remaining interest.
Upon completion of the transaction, an independent management team will operate the IREO India companies and execute an agreed business plan within a robust governance framework, with guidance from DLF and Everstone.
Commenting on the development, Ashok Kumar Tyagi, Managing Director, DLF, said, “We are pleased to partner with Everstone Group on this strategic investment. Bringing together strong industry experience and global investment capabilities, we look forward to unlocking the growth potential of the IREO India companies.”
Sameer Sain, Co-Founder & CEO, Everstone Group, said the company was pleased happy to partner with DLF, citing its strong capabilities and extensive understanding of the real estate market.
The transaction expects to close next year. The proposed partnership will combine DLF’s real estate development expertise with Everstone’s global investment capabilities to unlock the growth potential of IREO’s Indian business.
DLF is India’s largest real estate developer by market capitalisation.
