The Board of Directors of Mahindra Lifespace Developers Ltd. has approved a major restructuring involving the ‘Alembic Undertaking’, a Bengaluru real estate project. The project assets will be transferred via a slump sale to its wholly-owned subsidiary, MBLDL. Subsequently, 49% equity stake in MBLDL will be transferred to Mitsui Fudosan (Asia) Pte. Ltd. (MFA), formalizing a joint venture. The completion target for these transactions is set before March 31, 2026.
Board Approves Key Transaction Structure
On February 9, 2026, the Board of Directors of Mahindra Lifespace Developers Limited (MLDL) sanctioned a significant reorganization concerning its residential real estate development project in Bengaluru, referred to as the ‘Alembic Undertaking’.
Transfer of Alembic Undertaking
The core transaction involves the transfer of the ‘Alembic Undertaking’, including all associated assets and liabilities, on a slump sale basis to Mahindra Blossom Developers Limited (MBLDL), a subsidiary of the Company. It was noted that the Alembic Undertaking did not contribute to the company’s turnover, revenue, income, or net worth during the last financial year. The estimated net consideration for this transfer is not exceeding Rs. 100 crores.
Joint Venture Formation with Mitsui Fudosan
The approval paves the way for formalizing a joint venture arrangement with Mitsui Fudosan (Asia) Pte. Ltd. (MFA):
- Equity Transfer: Pursuant to necessary approvals, the Company shall transfer its 49% equity stake in MBLDL to MFA. Following this, MLD will hold 51% of MBLDL.
- Subscription to Rights Issue: Upon MBLDL undertaking a rights issue of equity shares, both the Company and MFA will subscribe to the new shares in a ratio of 51:49, respectively, at par value. The total value of the rights issue to be subscribed by MLD is Rs. 117,45,30,000.
Details of Agreements and Governance
The execution of a Shareholders Agreement (SHA) and an Investment Agreement (IA) is proposed to govern the joint venture. Key governance terms include:
- Board Composition: The Company (MLDL) shall have the right to nominate up to three directors, while MFA shall have the right to nominate two directors, plus one Independent Director as required by law.
- Related Party Status: The transaction involving the initial transfer to MFA is considered a related party transaction because MBLDL is a subsidiary, and MFA is linked via Mahindra & Mahindra Limited. However, the proposed transaction is supported by an independent valuation report and is structured on an arm’s length basis.
Timeline and Closing Conditions
The Business Transfer Agreement and/or Conveyance Deed are expected to be executed before March 31, 2026. The entire transaction structure, subject to all required statutory and shareholder approvals, is expected to be completed before March 31, 2026.
Rationale for Restructuring
The rationale behind transferring the Alembic Undertaking and establishing the joint venture is to provide operational flexibility, efficient management, sharp execution focus, and better monitoring of the Bengaluru residential real estate project.
Source: BSE
