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 The company had considered an IPO last year but withdrawn its plans when stock market conditions were not very favourable.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