Will Rakesh Jhunjhunwala be third time lucky in DB Realty?

Jhunjhunwala first picked up a 1 percent stake in the company in October 2012 at Rs 90 per share. That was also the first time he publicly endorsed a real estate company because, till then, he had a dim view of the sector as a whole because of its opaque accounting norms.

At the time of Jhunjhunwala's purchase, the stock had already fallen 80 percent from its peak price two years ago after the promoters and firm got embroiled in the 2G telecom scam.

In an interview with a TV channel a few days before Jhunjhunwala disclosed the purchase to stock exchanges, he said he had made up his mind in half an hour after going through the presentation on the company's financials. He was convinced that the shares were a good bargain because of the company's underlying assets.

DB shares soared to a high of Rs 158 by early January 2013 but soon crashed to Rs 60 by late March and never saw the three-digit mark for almost nine years.

Jhunjhunwala doubled his stake in the company to 2.06 percent during the quarter ended March 2015. The exact price of that acquisition is unknown, but the average stock price for that quarter was Rs 76.

Jhunjhunwala has since maintained his stake at that level, though the stock has been an underperformer in all these years. Not that it would have given the Big Bull sleepless nights because his exposure to the stock was minuscule in the context of his overall portfolio. Jhunjhunwala and his wife are set to be allotted 1 crore warrants each, which can be converted into shares over the next 18 months.

So, will Jhunjhunwala be lucky the third time around?

DB Realty is still incurring losses, and there are plenty of other issues the company is grappling with, as pointed out by CNBC-TV18's Sonal Sachdev in this article here.

Godrej Properties' shareholders opposed their company's proposal to buy a stake in DB Realty and partner it in some of the slum rehabilitation projects in Mumbai.

But other companies are willing to deal with DB Realty. Bangalore-based Prestige Estates has picked up a stake in DB Realty and is partnering it in three commercial and one residential project in Mumbai. And the joint venture is through a promoter firm rather than the listed company.

"…I believe that that also shows the confidence of the family office to see that we are investing in that entity," Prestige Estate's MD Irfan Razack told CNBC-TV18 in an interview. "I do believe there is a lot of potential, and that was the whole rationale behind it. That's why we didn't go the listed entity route, and we said let the family office invest in that."

Between promoters and non-promoters, the company is planning to raise Rs 1,575 crore that will help the company become debt-free, according to the company's communication to the stock exchange.

One of the promoters, Vinod Goenka, has mopped up a little over a couple of lakh shares through open market purchases over two months.