Dynamix Balwas (DB) Realty, the Mumbai-based realtor, has decided to buy upto 49 per cent stake in its hospitality arm, DB Hospitality Ltd, an unlisted arm where the promoters hold a majority stake. The promoters of the company, Vinod Goenka and Shahid Balwa, own 80.92 per cent in DB Hospitality Ltd while the rest is owned by private equity funds, including IIRF Holdings VIII Limited and Mauritius and IL&FS Trust Company Limited as per a report by Pooja Sarkar in Business Standard.

Last year, Trinity Capital (Seven) Limited, Mauritius, exited its stake from the hospitality business. It was not clear whether funds will exit their stakes or promoters will reduce their share in the company.

R Sridhar, group director, said: “ The board has approved an investment upto 49 per cent in the hospitality business and we will do it in a timely and phased manner. We have already hired a big four international property consultant (IPC) to do the valuations and one of the big law firms to draw the plans. We will not raise any debt for the same.The stake buy out will enable both the funds and the promoter an opportunity to exit.”

According to analysts, the transaction will be fructified in the next 15 days or by the end of the month. DB will also focus on commercial and hotels business. DB Realty does not own any stake in the hospitality arm at present. It had invested around Rs 200 crore last year in D B Hospitality which will now be converted into equity. The company will invest an incremental amount of Rs 500 crore which will be divided into two tranches. In the first tranche, it will spend Rs 300-400 crore and another Rs 200 crore in the final stages. The total investment will be around Rs 700 crore.