Stock Market

Why the Indiabulls Real Estate-Embassy Group merger is a crown of thorns

Synopsis

The merged entity will be India’s biggest real-estate developer, but the deal comes with its fair share of challenges, the reason why the Indiabulls stock has underperformed the broader market this year.The stock market’s reservation stems from the somnolence in real estate, particularly the residential market, where Indiabulls has a substantial exposure. The concerns are not entirely unwarranted.

With the merger of Indiabulls Real Estate and the Embassy Group, the real-estate market will have a new leader soon — but it promises to be a crown of thorns — for the moment. The response of the stock market, in a way, tells the story. The proposed merged entity’s potential saleable area has risen substantially, but the stock price has seen limited gains and continues to underperform the broader market. Dalal Street’s verdict holds significance

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