Mumbai: Real estate developer DLF Ltd’s shares ended on Thursday with a 8.6% premium to its Rs525 issue price on the Bombay Stock Exchange (BSE), in line with recent market expectations for what is now the sector’s bellwether stock.
DLF’s listing boosted the net worth of its chairman K.P. Singh and his immediate family members, who together own 87.4% of the company, to nearly $20 billion (Rs80,000 crore), making them one of the world’s richest families.
“We are very grateful to the investors for trusting us,” said Rajiv Singh, company vice-chairman.
DLF shares soared as high as Rs714 in the initial hours of trading before closing at Rs570.05 a share. As many as 78 million shares were traded on the National Stock Exchange and over 34.2 million shares changed hands on BSE.
With a market capitalization of Rs96,287 crore, DLF joins the top 10 companies trading on Indian bourses. Reliance Industries Ltd, ONGC Ltd, Bharti Airtel Ltd, NTPC Ltd, Infosys Technologies Ltd, Tata Consulting Services Ltd and Reliance Communications Ltd are the only companies to have a higher market capitalization on BSE.
DLF now has the highest market cap among real estate stocks, more than double its rival Unitech Ltd, which is now the second largest real estate developer with a market cap of Rs42,497 crore.
Unitech shares lost 5.21% to close at Rs524.45.
But shares of 10 other real estate firms, led by Unitech, fell between 0.13% and 5.56% as the benchmark index Sensex also fell by 0.12% to close at 14,861.89.
“After reaching Rs600, (DLF) may trade in the range of Rs550-600 for some time,” says Madhukar Sheth, a BSE broker. “It’s advisable to book profits in DLF at Rs600 level,” adds Ketan Malkan, vice-president, high networth individual desk, at brokerage firm India Infoline.
Indiabulls Real Estate Ltd
While DLF’s listing was a quiet affair on bourses, foreign interest in India’s real estate seems to be huge. Indiabulls Real Estate Ltd recently raised $360 million, floating global depositary receipts (GDRs) on the Luxembourg exchange.
According to investment bankers familiar with the matter, demand for the issue was close to $1 billion and the company may exercise a 11.1% greenshoe option, which allows it to raise more money than originally planned.
Merrill Lynch was the sole book running manager for the issue.
This is the first time an Indian real estate developer has raised capital from the international market. Indiabulls Real Estate had originally announced plans to raise a $200 million issue but raised it to $400 million following the success of the DLF issue.
Shares of Indiabulls Real Estate closed at Rs451.75, down 0.26% on BSE.
Attention, meanwhile, is turning to the listing of Mumbai-based realtor Housing Development & Infrastructure Ltd’s (HDIL) shares and the Rs1,600 crore IPO of Delhi-based Omaxe Ltd, which is expected to open early July.
HDIL’s Rs1,485 crore issue, which closed earlier this week, was subscribed 6.6 times. HDIL’s shares will be listed on 22 July, a company official said.
Rajesh Mahapatra of AP contributed to this story.