Real Estate Giant DLF opens IPO in June

The much awaited IPO from India’s real estate giant, DLF Ltd finally opens for sale on June 11, 2007 to raise USD 2.4 billion.

The company has decided on a price band of Rs.500-550 per share after much deliberation on the issue with bankers.

DLF was keen to place it for Rs. 600, it is understood, but
settled for a lower figure on advice from the issue managers.

The company had considered an IPO last year but withdrawn its
plans when stock market conditions were not very favourable.

The company had placed a higher target of USD 3.5 billion at
the time.
As interest rates remain high, and demand for homes plateaus,
observers are doubtful of the IPO’s success.

However, some analysts are of the view that investors are still
confident of stocks in the property market. Moreover, this issue
would be viewed as a safe investment as DLF has withstood the
highs and lows of the industry over the last 30 years to maintain
its lead in Indian real estate.

ICICI Securities further observes that reports of overheating
in some pockets of the real estate are exaggerated, and in any
case, do not reflect the overall real estate scenario in India.

Realty in India has all the ingredients of success, it believes.

As the market leader, DLF is way ahead of its closest rival,
Unitech Ltd in terms of valuation – while DLF stands at USD 23 billion; Unitech is way down at USD 11.3 billion.

DLF has created a total of 220 million square ft. of property
across India, in all segments of the industry – residential,
commercial, retail, hospitality and SEZ.

Earlier this year it
tied up with Nakheel of Dubai to develop 2 townships with an
investment of USD 10 billion
A consortium of lead arrangers is managing the mega issue: Kotak
Mahindra, DSP Merrill Lynch, Citigroup, Deutsche Bank, ICICI
Securities, Lehman Brothers, UBS and SBI Capital Markets. The
issue closes on June 14, 2007.

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