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| India's top real estate firm upbeat on IPO, owner set to join world's billion |
| Friday, June 1, 2007 |
The top real estate india company, DLF Ltd., is confident of a strong response to its initial public share offering - the biggest in Indian stock market history � when it opens next month despite tapering house price rises, it said Wednesday.
A successful listing will propel Chairman K.P. Singh and his family that owns 97.4 percent of DLF into the league of the world's richest, giving them a net worth of more than $18 billion.
DLF is offering 10.26 percent of its equity, or 175 million shares, to the public in a price band of 500 rupees to 550 rupees. If all shares are subscribed, the company will raise between 87.5 billion rupees ($2.1 billion) and 96.25 billion rupees ($2.35 billion) depending on the cut off price.
"We are very, very confident of the response we will get," Singh told reporters. "Those who don't buy (DLF shares) today will realize they lost an opportunity to make money," he said.
The initial public offer of shares will open on June 11.
India's booming economy, which is growing close to 9 percent annually, has seen property prices soar in recent years, bringing windfall gains to companies like DLF that holds large land reserves on the outskirts of New Delhi and other major Indian cities and towns. Most of the land was bought from farmers at rates much lower than the current market price.
Although, the growth in the property market has slowed in recent months because of high prices and a series of interest rate hikes, most analysts and research groups feel the lull is temporary.
The housing shortage in the country is currently estimated at more than 20 million units, while demand for shops, malls and office space continues to outpace supply and has pushed prices of commercial real estate to record levels.
"People say there is an asset bubble (in the real estate). It's a figment of imagination," Singh said. "It's the sunrise industry."
With the mood in the stock market staying upbeat, analysts see DLF's IPO getting subscribed at the higher end of the price band.
"It will sail through easily," said Sujit Jain at Mumbai-based brokerage Pioneer Intermediaries. Jain said the pricing is actually lower than what the market had expected. Pioneer Intermediaries is not involved in the share sale.
A successful listing will make DLF a $23 billion company in terms of market capitalization, nearly twice that of its nearest rival Unitech Ltd., which is valued at about $12 billion.
With Singh and his family owning 87.4 percent of the company after the IPO, DLF's listing will add a new name to the Forbes' list of billionaires. Earlier this year, Forbes rated Mukesh Ambani, chairman of petroleum major Reliance Industries Ltd., as the richest resident Indian with a net worth of $20.1 billion. Ambani came 14 in Forbes' 2007 worldwide rankings.
DLF, the country's largest real estate firm in terms of the area it has developed, first tried to make a public offer last year, but scrapped the plans amid a stock market meltdown and disputes with minority shareholders.
The company plans to spend nearly 70 billion rupees ($1.7 billion) from the IPO proceeds on acquisition of more land and construction of ongoing projects, DLF said in a filing with stock market regulators. The rest would be used to pay up some loans before they mature, it said.
Singh's daughter, Pia Singh, who is a director on DLF's board, said the company is partnering with several international firms to scale up operations.
It has set up a joint venture with the U.S.-based Hilton Hotels Corp. to build a nationwide chain of budget hotels, she told reporters.
Under a similar partnership with Dubai-based real estate developer Nakheel, DLF plans to build two new towns in India, she said without elaborating.
Source://turkishdailynews.com.tr |
posted by India Properties @ 4:22 AM  |
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