MUMBAI (Reuters) - Property developer DLF Ltd., which is relaunching an initial public share offer to raise up to $2.4 billion, said on Tuesday there was no property price bubble and its earnings would be a pleasant surprise.
Vice Chairman Rajiv Singh said the company, which had cancelled a planned listing last year, expects strong earnings growth and steady real estate prices.
DLF's offering, India's biggest-ever IPO, was priced at 500 to 550 rupees, which Singh said is an attractive level when compared with the likely earnings in the current fiscal year.
"We have priced it to the benefit of the investors ... It will be seen as an extremely reasonable offering," he told Reuters.
The offer price values DLF at over $23 billion at the upper end of the band and places its above India's top private bank ICICI Bank, valued at $20.6 billion; Wipro Ltd., $19.5 billion; and top lender State Bank of India, $17.1 billion.
DLF is selling 175 million shares, or 10.27 percent of the company. Subscription is open from June 11 to 14.
"I think when our next year results are seen, it will be an extremely pleasant surprise and put things in a totally different perspective than what's being thought of today," Singh said.
The company is upbeat about India's real estate sector although several analysts and fund managers say property prices, may drop up to 40 percent in the short to medium term.
"I don't think there is any bubble, neither will it burst," Singh said.
India's booming market has seen property prices double in the last two years as the economy, growing at more than 9 percent a year, boosted demand for shopping centres, offices and homes.
However, demand for homes has slowed after a sharp rise in interest rates. Singh said he expected prices to mostly hold at current levels, with some variation depending on location.
New Delhi-based DLF, which has developed 220 million square feet of property, expects to spend 35 billion rupees ($864 million) from the IPO to buy land, Singh said.
DLF's IPO would rank comfortably above those from India's top software firm Tata Consultancy Ltd., state-run utility NTPC Ltd. and energy firm Cairn India Ltd., all of which had raised just under $1.2 billion.
Last year DLF scrapped plans for a public offer after a stock market meltdown and some disputes with minority shareholders. At that time the IPO was expected to raise up to $3.5 billion.
Rival Unitech Ltd reported on Monday that its earnings for the quarter ended March jumped more than 10 times as it sold more properties and expanded into new markets.
Unitech is currently India's most valuable listed real-estate firm, with a capitalisation of $12 billion.
Kotak Mahindra and DSP Merrill Lynch are the lead arrangers for the issue, with Citigroup, Deutsche Bank, ICICI Securities, Lehman Brothers, UBS and SBI Capital Markets.
http://in.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2007-05-29T214204Z_01_NOOTR_RTRJONC_0_India-300475-2.xml&archived=False
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment