Mumbai, May 1: The board of Indiabulls Financial Services Ltd today announced the demerger of its real estate business.

The new entity, Indiabulls Real Estate, will be listed on the bourses soon.

Speaking to The Telegraph, executive director Gagan Banga said, “Both businesses had a very different capital structure. Also, we felt that demerging the real estate business will unlock value for our shareholders.”

“The scheme proposes to demerge assets and liabilities of the real estate undertakings of Indiabulls Financial Services Ltd (IBFSL) into Indiabulls Real Estate. The appointed date for the demerger of the real estate undertaking is May 1,” a company statement said.

Indiabulls Real Estate will include IBFSL’s investments in the real estate undertakings.

The Indiabulls arm had stirred up a storm in the real estate business in Mumbai by acquiring 11 acres of Jupiter Mills land at central Mumbai’s Lower Parel area from NTC. Indiabulls had paid Rs 276.6 crore for the property.

The company also acquired 7.8 acres of Elphinstone Mills land in the same area from NTC for Rs 441.75 crore.

Explaining the benefits of the demerger for shareholders, Banga said, “All shareholders of IBFSL will be issued shares of Indiabulls Real Estate in the ratio of 1:1. This means that for each fully paid-up share of a face value of Rs 2 held in IBFSL, shareholders will be allotted one of Indiabulls Real Estate of face value of Rs 2, fully paid-up.”

“The new entity will be listed soon where IBFSL shares are currently listed, thus providing liquidity to all shareholders,” he added.

Last week, the capital market regulator suspended its ban on Indiabulls Financial Services from trading because of its suspected involvement in the IPO scam. It has ordered further investigations into the claims of Indiabulls that the TCS shares reported to have been transferred to it actually were on account of margin trading on client accounts, which is required under Sebi rules.

Indiabulls was among 24 key operators named in Sebi’s 252-page interim report on the IPO scam.