The Board of Directors of Mahindra Lifespace Developers Limited (MLDL) has approved a major restructuring involving the ‘Alembic Undertaking,’ a Bengaluru real estate project. This includes transferring the project via a slump sale to its subsidiary, Mahindra Blossom Developers Limited (MBLDL). Subsequently, 49% equity stake in MBLDL will be sold to Mitsui Fudosan (Asia) Pte. Ltd. (MFA), formalizing the joint venture structure. The transaction value, representing the net assets, is capped at Rs. 100 crores.
Key Board Approvals for Project Transfer and JV Finalization
On February 9, 2026, the Board of Directors of Mahindra Lifespace Developers Limited (MLDL) approved a series of related transactions designed to streamline the development of a residential real estate project in Bengaluru, referred to as the ‘Alembic Undertaking’.
Slump Sale of Alembic Undertaking
- The ‘Alembic Undertaking’ (including all assets and liabilities) is proposed to be transferred on a slump sale basis to Mahindra Blossom Developers Limited (MBLDL), a subsidiary of MLDL.
- This undertaking did not contribute to the company’s turnover, revenue, or net worth in the last financial year.
- The consideration received is structured as a net amount not exceeding Rs. 100 crores, subject to approvals. The expected completion date is before March 31, 2026.
- The transaction is classified as a related party transaction, as MBLDL is a subsidiary, but it is confirmed to be conducted on an “arm’s length” basis, supported by an independent valuation report.
Shareholding Restructuring in MBLDL
The transaction establishes the final framework for the joint venture between MLDL and Mitsui Fudosan (Asia) Pte. Ltd. (MFA) within MBLDL:
- MLDL will transfer 49% equity stake in MBLDL to MFA, pursuant to necessary approvals.
- Following this transfer, MLDL will hold 51%, and MFA will hold 49% of the total equity shareholding in MBLDL.
- Both MLDL and MFA will subscribe to any future rights issue of MBLDL equity shares in the agreed ratio of 51:49, respectively. The rights issue shares will have a face value of Rs. 10, aggregating to Rs. 230,30,00,000.
Shareholders Agreement and Governance
The execution of the Shareholder Agreement (SHA) and Investment Agreement (IA) will govern the relationship between MLDL and MFA regarding the management of MBLDL.
The proposed board composition of MBLDL will be:
- MLDL shall have the right to nominate up to three directors.
- MFA shall have the right to nominate two directors.
- One Independent Director will be appointed as required by law.
The rationale for this restructuring is to provide operational flexibility, efficient management, sharp execution focus, and better monitoring of the Bengaluru residential project.
Acquisition Details (Rights Issue Subscription)
To meet funding requirements, MBLDL will undertake a rights issue. MLDL’s proposed subscription is for 11,74,53,000 equity shares (face value Rs. 10 each), aggregating to Rs. 117,45,30,000, ensuring the Company retains its 51% post-subscription. MBLDL is engaged in residential real estate and has nil turnover as of the date of intimation.
Source: BSE
