Orbit's Pujit Aggarwal redeems 23 per cent pledged shares from Edelweiss

Orbit Corporation, the Mumbai based niche luxury realty developer's promoter Pujit Aggarwal has redeemed 23 per cent or 1.22 crore pledged shares from financial institution Edelweiss today. The company notified the same on the Bombay Stock Exchange (BSE).
The promoters Pujit Agarwal and his father Ravi Kiran Aggarwal have pledged 77.22 per cent of their holdings in Orbit as collateral to FI's Edelweiss and Industrial Finance Corporation of India (IFCI) for financing the acquisition of the last palace of Mumbai- the Kilachand House at Napean Sea Road. It had raised a loan of Rs 150 crore for the same.
An analyst tracking the company said, “It has total pledging of 4.06 crore shares between Edelweiss and IFCI, the promoter has pledged around three small chunk of land parcels and released their shares from Edelweiss.”
The company was earlier planning to put the Kilachand property as collateral and release the entire block of pledged shares from both the financial institutions. It has paid Rs 220 crore for acquisition of 50 per cent of the property.
A source close to the development said, “IFCI is not interested in having the Kilachand property as collateral due to the nature of the property as it was entangled in legal battle most of the time and the developer too is not keen to put up anything on that property in next one-two years. Though Edelweiss was ready to accept the deal, IFCI has clearly not given its nod. The promoters will release another substantial chunk soon.”
The promoters earlier had to increase the amount of pledged shares to 77.22 per cent from the 67.67 per cent when initially pledged which meant an additional two million promoter shares were pledged to the FIs. Orbit's share closed today at Rs 44.10 per share, it fell 3.50 per cent at the end of the day on BSE.

The margin of share collateral was thrice that of the loan value, and as its prices collapsed, the developer also faced an increase in interest rate by 100 basis points. Its interest cost for the loan is around 13 per cent.