Twenty-Five Downtown Realty, earlier known as Joyous Housing, raised Rs 250 crore from global asset manager Oaktree Capital for a little over two years at 18% a year, people with knowledge of the matter told ET.
It raised the money amid an ongoing dispute over its ownership with DLF and Shapoorji group, which alleged that the Hubtown-linked entity connived with Omkara Asset Reconstruction Company (ARC) and PNB Housing Finance to gain control.
Officials from Hubtown, PNB Housing and Omkara ARC have denied the allegations while the matter is being heard by the Delhi High Court.
The funds are raised as secured, unlisted, unrated non-convertible debentures maturing on March 31, 2026, and proceeds will be used for ‘general corporate purpose and project approval cost, as per the National Securities Depository Ltd (NSDL) disclosures.
The bonds are guaranteed by Hubtown promoters Vyomesh Shah, Hemant Shah, Twenty-Five South Realty, Nitant Real Estate and Hubtown Ltd, as per NSDL disclosures.
Hubtown confirmed that it raised funds from Oaktree in an email response. Oaktree and Twenty-Five Downtown did not respond to ET’s request for comments. Twenty-Five South Realty could not be reached for comments.
At the heart of the dispute is allegation by DLF and Shapoorji Pallonji that Twenty-Five South Realty is linked to Hubtown, which has gained control of Twenty-Five Downtown Realty surreptitiously.
Twenty-Five Downtown was a three-way joint venture between DLF and Shapoorji Pallonji promoted Chinsha Property owning 37.5% stake each; and Hubtown with a remaining 25% stake.
The company won the mandate from the Maharashtra government’s slum rehabilitation authority for a 17-acre project at Tulsiwadi (south Mumbai). Under the scheme, it would get 12 lakh sq ft of free sale area valuing over Rs 10,000 crore on providing free homes for slum dwellers residing there.
To finance the project, it availed Rs 800 crore loan from PNB Housing Finance, pledging its stake and land. However, the company defaulted on payments. PNB Housing Finance auctioned the loans in August 2023 after several attempts to recover its dues. Omkara ARC emerged as the winning bidder at an uncontested Swiss auction.
Subsequently, Omkara ARC, as a new lender, informed DLF and Chinsha Property that it had invoked 75% of their equity pledge and sold them to an undisclosed company. In response, DLF and Chinsha appealed at the Delhi High Court that Omkara ARC had conveniently chosen to invoke their shareholding while excluding 25% of Hubtown’s shares.
Last September, DLF also informed the court that it offered Rs 1,450 crore to acquire Hubtown and Shapoorji Pallonji’s stake, but PNB Housing ignored the offer and sold the loans to Omkara.
Following direction from the court, Omkara disclosed that it sold the shares to Twenty-Five South Realty- which was a joint venture between Hubtown and Redfort Capital, according to a rating report by Brickworks. Nitant Real Estate Pvt Ltd acquired 61.2% held by Hubtown and also acquired 100% preference shares held by Hubtown, the rating report dated July 21, 2023 stated.
In a latest twist, Shapoorji Pallonji Group company has withdrawn its objection to the transfer of shares to Twenty-Five South Realty even as the hearing at the Delhi High Court is scheduled in August.
