Rupee, Real Estate Stocks Gain as DLF Issue Storms Market
Tuesday, June 12, 2007
The rush for DLF’s stocks in the opening hours of the IPO on Monday morning confirmed the confidence investors have in the real estate industry, despite talks of an overheated market.
40% of the 175 million shares were mopped up in the first 45 minutes, and the institutional portion (104.4 million shares) of its USD 2.4 billion offering had been fully subscribed within an hour.
The frenzy for DLF stocks had its impact on other real estate stocks,
rising overall by 8%. Unitech saw a 4% appreciation, while Parsvnath and
Sobha Developers gained by 3%. Shares of Ansal API appreciated the most,
climbing up by 7.7%. Lok Housing, Mahindra Gesco and Peninsula Land and
Orbit Corporation rose by 2 to 6.5%.
DLF’s performance is encouraging other developers like Omaxe and Godrej Properties to go forward with their IPO plans later this year.
The success of the DLF issue has spilled over to the performance of the
rupee, based on speculation that global investors would invest as much
as USD 700 million in the company’s stocks. The capital inflow will push the rupee up as it did on Monday, by 0.8% to Rs. 40.8025 against the dollar
As India’s largest real estate developer, DLF is well established in all verticals through partnerships with Indian and global players.
Its latest tie-up is with rival Unitech to develop a township in Dankuni,
Hooghly district, on the outskirts of Kolkata and a Special Economic Zone.
Working on a 50:50 revenue-sharing plan and a total investment of Rs.33,
000 crore, the project will cover 5000 acres.
A long-term project spanning
15 years, 2000 acres would be devoted to residential development
to accommodate 8 lakh people.
Investors can look forward to the IPO from Godrej Properties
which will hit the bourses later this year. The company is looking
to expand in Chennai, Kochi, the National Capital Region (NCR) and Goa.
Godrej has a larger proportion of its portfolio in commercial properties,
and a third of it is in residential
properties in Mumbai, Pune, Kolkata,
Bangalore and Hyderabad.
