Shares of Sobha Ltd plunged a little over 6 per cent in Wednesday's trade as the Income Tax Department carried out searches at the real estate developer's registered office and other premises. The stock was trading at 6.19 per cent lower at ₹487.10 apiece at around 1:20 pm on the NSE.

The Bengaluru-based company said it is extending full cooperation to the tax officials. However, it didn't specify the reason behind the searches.

"We would like to inform you that a search by the Income Tax Department is being carried out at the registered office and other premises of Sobha Limited. Further, as a responsible company all the concerned employees/staff of the Company are extending their full cooperation to the Officials," the company said in a filing.

Sobha Ltd Q3

Sobha's third-quarter profit nearly halved, hit by higher land acquisition costs. The company's consolidated net profit fell nearly 48 per cent to ₹31.8 crore for the three months ended 31 December.

The company's total expenses surged 51.7 per cent to ₹863 crore, mainly as land purchase costs rose to ₹532 crore from ₹23.2 crore a year ago.

Sobha's real estate liabilities also increased by nearly 27 per cent to ₹6,545 crore in the quarter.

In contrast, peers DLF reported a near 37 per cent rise in third-quarter profit, while Macrotech Developers' profit gained 41.4 per cent.

However, Sobha's quarterly consolidated revenue from operations rose 39.51 per cent to ₹868 crore, helped by strong demand for new homes.