Marathon Nextgen Realty Limited to buy Monte South for Rs 335 crore

Marathon Nextgen Realty Limited plans to pay Rs 335 crore for Adani Group’s 60% stake in Monte South, lifting its holding from 40% to 100% upon completion and allowing consolidation of a Byculla project with approximately Rs 6,500 crore of estimated future gross development value.

What is Marathon Nextgen buying at Monte South?

Marathon Nextgen is buying Adani Group’s 60% interest in Monte South for Rs 335 crore, subject to completion, taking its ownership in the Byculla project from 40% to 100%. The board approved the transaction on October 31, 2026, and management said Rs 200 crore had already been paid by the November 4, 2026 earnings call. Management expected completion during the same quarter rather than presenting the acquisition as completed.

Monte South comprises four 64-storey residential towers and a commercial tower across approximately 25 lakh square feet. Tower A has received a full occupation certificate, Tower B has received an occupation certificate through the 45th floor and has completed its reinforced cement concrete, or RCC, structure, while Tower C had reached the 35th floor. Tower D and the commercial tower had not been launched.

The transaction follows Adani Group’s decision to exit its investment in Monte South as it focuses on larger development across the Mumbai Metropolitan Region, according to management. Marathon said it has executed Monte South from the beginning and that the development includes completed residences in Tower A, work in progress at Towers B and C, and future residential and commercial inventory.

How much business remains at Monte South?

Management said about 15 lakh square feet remained unsold at Monte South, equal to 60% of the project’s 25 lakh square feet, after roughly 10 lakh square feet had been sold. It described the unsold portion as about 70% of the project’s value, reflecting the mix of ongoing residential inventory and future Tower D and commercial development.

Marathon initially put estimated future gross development value, or GDV, at approximately Rs 6,500 crore on a 100% project basis. In the question-and-answer session, management used a rougher estimate of Rs 7,000 crore of future sales, based on a project-wide average of Rs 40,000 per square foot and prior sales of Rs 3,000 crore. These are management estimates rather than booked revenue.

Of the 15 lakh square feet still to be sold, management said approximately 3 lakh square feet was in the current ongoing portfolio, while Tower D and the commercial component represented about 12 lakh square feet. Sales from the launched A, B and C towers can continue alongside future launches, but monetisation of the larger unlaunched portion depends on the planned launches and market absorption.

How will full ownership change Marathon Nextgen’s financial reporting?

Full ownership would allow Marathon Nextgen to consolidate 100% of Monte South revenue after completion, whereas its previous 40% minority interest did not result in revenue consolidation. Management said that, under the former structure, profit appeared as a single line item in the profit statement while project revenue was not recognised in its books. The acquisition changes revenue reporting treatment, not the stated construction timeline.

Management said its economic share of future profits would rise from 40% to 100% when the transaction closes. It also cited an earnings before interest, tax, depreciation and amortisation, or EBITDA, margin of more than 30% for the project in a rough illustration, implying a surplus of about Rs 2,100 crore on Rs 7,000 crore of remaining business over the coming years. This was a management estimate, not a profit forecast in the reported financial statements.

The expected change is material beside Marathon’s reported Q2 FY27 results. Consolidated revenue was Rs 145 crore, EBITDA was Rs 61 crore and profit after tax was Rs 45 crore for the quarter ended September 30, 2026. For H1 FY27, it reported revenue of Rs 362 crore, EBITDA of Rs 127 crore and profit after tax of Rs 98 crore; full consolidation would bring in Monte South revenue that was previously excluded.

What do recent Monte South sales and construction show?

Monte South generated booking value of Rs 58 crore for Marathon’s 40% share in Q2 FY27, compared with Rs 50 crore in Q1 FY27. Its share of area sold was approximately 15,800 square feet and collections were Rs 57 crore in Q2. Management separately said total project sales were around Rs 146 crore in Q2, including the rainy season, and that about 800 of the planned 1,800 apartments had been sold.

Construction obligations remain alongside the remaining sales opportunity. Management put Tower B’s balance construction cost at around Rs 200 crore and said the project was operating at typical EBITDA margins of 30% to 35%. Tower B’s completed RCC structure and occupation certificate through floor 45 support sales of ready or nearing-ready homes, while Tower C, Tower D and the commercial element extend the execution programme.

Marathon said it plans to launch the Monte South commercial project in the next financial year, with estimated GDV of around Rs 3,400 crore. Management said the commercial development could comprise two office towers above retail and parking levels, with completion of one tower normally taking about four years after launch. Tower D, with estimated GDV of Rs 1,800 crore, was scheduled by management for FY29.

Conclusion

The proposed purchase would change Marathon’s role at Monte South from a minority participant to sole owner, while bringing revenue recognition into its consolidated accounts after closing. The remaining 15 lakh square feet includes both current residential stock and a larger future launch pipeline, making execution and sales conversion central to the project’s contribution over the coming years.

The next point to watch is acquisition completion, which management expected during the quarter following the November 4, 2026 call, because that would trigger 100% revenue consolidation. Investors can also track the commercial launch planned for the next financial year, the FY29 Tower D launch plan, Tower B’s remaining Rs 200 crore construction cost, and progress in obtaining approvals for Marathon’s proposed amalgamation.