Real estate in india

The company's stock is the largest gainer in
the real estate sector.

It has appreciated by 75 per cent from Rs 111.15 to Rs 194.25 on reports that the company was going to raise funds through Qualified Institutional Placements (QIP) issue.

The board of directors of the company has called an Extraordinary General Meeting (EGM) on June 17, 2009.

The Extraordinary General Meeting will consider the increase in the share capital of the company up to Rs 1,500 crore and the increase in the limit of investment by foreign institutional investors (FIIs) in the equity shares of the company up to 100 per cent of the equity share capital of the company.

The Bangalore-based real estate firm that engages primarily in the construction and development of contractual and residential projects, is looking to raise around Rs 1,000 crore via QIP issue.

The company has posted 53 per cent fall in net profit to Rs 107.80 crore (Rs 228.10 crore) for the financial year ended 31st March, 2009, while net sales have declined by 32 per cent to Rs 974 crore (Rs 1,431 crore) during the year.

The counter clocked combined volumes of four million shares in last week as against two million shares were traded in previous week.

The real estate sector has been facing a liquidity crunch for some time now but the situation has improved post the election results.

In fact, many industry players are encouraged by the response Indiabulls and Unitech have received. Indiabulls Real Estate has raised Rs 2,656.50 crore through QIP.

The company issued 14.36 crore equity shares at Rs 185 per share.

Unitech had raised about Rs 1,615.25 crore through QIP.

The promoter’s stake after the QIP has come down in both the cases.

Courtesy:- BS dt:- 24-05-2009

Delhi-based Parsvnath Developers has decided to raise up to Rs 2,500 crore through issuance of securities , including Qualified Institutional Placements. The company has the approval of its board of directors. It will now seek permission from shareholders. “We want to raise money to reduce our debt and expedite our ongoing projects in the hospitality and the SEZ segment,” said Pradeep Jain, chairman.

Courtesy:- BS dt:- 24-05-2009

Liquidity-starved sectors such as infrastructure and realty could be the biggest beneficiaries of the vote of confidence for the UPA.
A clear mandate for the United Progressive Alliance and the continuity of the current government's policies are likely to keep the markets buoyant. Marketmen believe that foreign institutional
investors and domestic institutions, which were not participating aggressively in the markets thus far, are likely to invest for the long term, given the stable government at the Centre.

Opening up of the economy, allowing foreign direct investment and easier interest rates should improve liquidity and are expected to help sectors such as infrastructure, banking, India's largest realty companies--DLF and Unitech --have already raised over a billion dollars in the recent past and chances are that others might follow. Nirmal Jain, chairman, India Infoline, said "indications are that formation of a stable government will trigger flow of foreign capital in equity as well as debt. This would mean appreciation of the rupee and revival of liquidity-starved sectors such as real estate."

Analysts now believe that since the UPA can form the government without the support of the Left parties who were opposed to the idea of foreign direct investment, special economic zone projects, which were stalled, could get a fresh lease of life

Courtesy:- BS dt:- 18-05-2009

Owners Sell 9.9% In DAL For Rs 3,860 Crore In Open Mkt Transactions

DLF, India’s largest real estate company,

is looking to raise Rs 10,000 crore in the next 2-3 years through sale of its

treasury investments, land parcels and real estate projects, said its vice-chairman

Rajiv Singh.

Mr Singh’s family, promoters of the cash strapped DLF, had sold 9.9% stake in the

company on Wednesday for Rs 3,860 crore in open market transactions.

ET Now had first reported on Thursday that DLF promoters were selling stake. Capital

group picked up close to 5% stake in DLF, while HSBC, GIC and Fidelity bought smaller

stakes. The transactions were done at Rs 230 per share. DLF shares closed marginally

down at Rs 234 at NSE on Wednesday.

On the timing of the stake sale, Mr Singh said, “If it was the best or the worst, one

would know only in hindsight, but it was surely the right solution in the current

circumstances.” DLF had mopped up Rs 9,000

crore in an IPO less than two years ago. The company’s shares had peaked in

January 2008, crossing Rs 1,200 but declined to a low of Rs 124 earlier this year.

Mr Singh said he started thinking of the stake sale only a few weeks back, adding a

successful qualified institutional placement (QIP) by rival realty firm Unitech too

played a part in promoter’s decision to sell stake. “Unitech’s QIP did give a positive

signal that investors were interested in buying stocks. It really helped,” he said.

The funds raised through the stake sale will be advanced to privately held promoter

group company DLF Assets (DAL), which purchases properties from DLF. Mr Singh said he

was still working on the form of fund infusion in DAL, as to whether it will be in the

form of equity or some other instrument. The fund infusion in DAL will be used to buy

hedge fund DE Shaw’s $400 million (Rs 2,000 crore) investment in DAL and also to pay

back to DLF around Rs 1,600 crore.

Besides this, DAL is expecting to raise Rs 2,000 crore in debt through securitising

its rental income this year. Together, these fund raising initiatives at DAL will

bring down DLF’s receivables from DAL from Rs 4,900 crore to around Rs 1,300 crore.

A panel of independent directors is working on ways to integrate DLF and DAL. DAL will

continue to exist as an independent entity, but its ownership may change, Mr Singh

said. Therefore, DAL will not be merged with DLF, but may become a subsidiary of DLF.

While elaborating on DLF’s plans to raise Rs

10,000 crore through sale of assets and its portfolio of investments, Mr Singh

did not give details of its portfolio of investments, but said negotiations with

buyers are currently under way. The company will also sell some of its hotel projects

and certain businesses such as wind power to raise the amount.

The sale proceeds will be used to repay part of DLF’s Rs 14,000 crore debt. “Our

target is to halve our debt this year,” he said. The assets that will be disposed off

are “not contributing revenue in the short-term and are not strategic in the

long-term”, he said.

DLF had earlier this month said it would raise Rs 5,500 crore through asset sale in

FY10. The company expects to raise Rs 3,500 crore by the beginning of the third

quarter this fiscal. The sale of promoter’s stake has come just days after the closure

of DLF’s buyback programme, which had attracted criticism from some analysts for not

making the best use of cash. Mr Singh defended his decision saying, “The company

decided on buyback at a time when the economy was still not falling off the cliff.”

On housing market, Mr Singh said the demand has started picking up. “The worst is

over. But I will still be cautious and say that recovery is at least four to five

months away,” he said, adding that he didn’t see scope for further price correction.

Courtesy:- ET dt:- 14-05-09

After suffering a severe slump for almost six months, leading
real estate firms are showing strong signs of revival on the back of affordably priced middle-income homes and flexible payment terms that are fuelling demand.

Bookings for new flats are surging as the price tags are well below the heady highs two years ago, say builders like national leader DLF and the Vatika Group.

DLF `s Capital Greens project in West Delhi launched last month at Rs 4,500-Rs 5,500 per squre foot sold close to 1,400 units within a day. In Bangalore, DLF launched a project with 1,800 flats priced at Rs 1,850 per sq foot. It sold 600 flats on the first day itself.

"As the largest real estate company, DLF took a conscious decision to reduce prices. The correction in prices have ensured that speculators stay out from the market as returns are not galloping," said Rajeev Talwar, group executive director, DLF Ltd.

Earlier this month, the Vatika Group introduced new projects in four Gurgaon sectors, pitching an 850-sq-foot flat at Rs 21 lakh and a 1,450-sq-foot apartment at Rs 43 lakh.

"Till last year, all developers were focused on upper middle class as margins are higher but the markets taught everyone a lesson. Now, players have changed gear to compact units to make up for reduced margins through volumes," Pankaj Pal, president, sales and marketing, at Vatika Group told Hindustan Times.

Unitech has already sold 2.5 million square feet of apartments in new affordable housing projects spanning 9 million square feet in NCR, Mumbai, Chennai and Kolkata. The company plans to launch 40 projects involving 27 million sq. feet by next March.

"There has been a turnaround for well located projects from reputed builders although buyers are still cautious and showing a preference for projects that are ready to move in or nearing completion. Flexible payment terms of developers have also led to some activity in the market," said Sanjay Dutt, chief executive officer at property consultancy Jones Lang LaSalle Meghraj.

Delhi-based BPTP Ltd is selling independent floors in Faridabad, offering1,296 sq feet starting at Rs 16 lakh.

"Within a week, we sold out close to 480 units of the total 600," said Amit Raj Jain, BPTP's vice-president, marketing.

Parsvnath Ltd says it has sold 480 units of its 510-apartment `Royal Floors' project in Lucknow, where a 1,135 square foot floor is priced as low as Rs 12.85 lakh
Courtesy:- HT dt:- 20-05-2009