Hubtown in demand
Hubtown shares were back in demand today after two days of sharp selling triggered by the withdrawal of its Rs 500-odd crore preferential share issue. The stock, which had closed at Rs 229 on December 11 after falling about 25% over five sessions, rebounded more than 7% intraday to around Rs 245, though it still trades well below its recent 52-week high of Rs 366 and remains highly volatile in a counter with low retail participation.
The cancelled fundraising had been structured as a 1.47 crore-share preferential issue to non-promoters at a floor price of Rs 341, a 14% premium to Hubtown’s December 5 close of Rs 298.5. After securing shareholder and stock-exchange approvals, the company disclosed that proposed investors were no longer willing to participate, citing market uncertainty and the time elapsed since the proposal was first cleared. Management has insisted that the withdrawal will not materially affect operations or financial stability and that it will explore alternative capital-raising options.
Fundamentally, Hubtown is coming off a strong operating quarter: Q2 FY26 consolidated income nearly doubled year-on-year to about Rs 263 crore and net profit rose 65% to roughly Rs 32 crore, though profit margins compressed versus the year-ago period. The company has also cleaned up legacy issues, including a high-profile settlement with DLF over the Rs 10,000 crore Tulsiwadi South Mumbai project, and is in the middle of a broader consolidation of promoter real-estate assets into the listed vehicle to create a larger, more focused Mumbai-centric portfolio.
The market’s nervousness stems less from near-term earnings and more from balance-sheet and execution risk. Hubtown has used multiple preferential issues and structured instruments since 2024 to accelerate debt reduction and fund an ambitious luxury and redevelopment pipeline; calling off this issue delays that equity cushion and raises questions about investor appetite at higher valuations. Today’s bounce therefore looks more like bargain-hunting after an overdone reaction than a clean bill of health: while the withdrawal avoids immediate dilution at a premium price, investors will now track how the company finances its growth plans, whether debt continues to trend down, and how quickly it can convert its large Mumbai pipeline into cash flows.