Some developers awaiting the approval of Securities and Exchange Board of India (Sebi) to raise money through the stock market say the regulator’s plans to strengthen disclosure for realty companies may delay their IPO plans and result in wasted expenses.
Girish Lakhe, group chief financial officer for Pune-based Kolte-Patil Developers Ltd, said the company’s IPO proposal, filed on 5 February, could be delayed by a couple of months. Lakhe said the company had already spent about Rs40 lakh to have its land bank of about 1,000 acres valued on future projections. Kolte-Patil would have to replace that valuation with one that calculates the current value, as per the new guidelines.
“Everybody has to rework everything,” Lakhe said. But not everyone was unhappy with the rules.
Bangalore-based Puravankara Projects Ltd, Mumbai-based Housing Development & Infrastructure Ltd and Delhi-based Omaxe Ltd said they saw the rules as a welcome step. Omaxe said the new guidelines would do little more than cause a delay. “Overall, it’s positive for the sector,” said Arvind Parakh, Omaxe’s CEO for corporate strategy & finance. “They’ve asked for more detail, more realistic valuations, more transparency.”
DLF Ltd, the Delhi-based real-estate giant with the largest IPO in the realty pipeline, declined to comment.
Sarang Wadhawan, Housing Development & Infrastructure Ltd’s managing director, said he doesn’t expect any delay in the approval of his company’s IPO proposal because it included current valuation and land bank ownership information.