Indian property developer DLF Ltd, which is relaunching its initial public offering (IPO) to raise a lower-than-expected $2.4 billion (Rs9,600 crore), expects real estate prices to be steady, a senior company official said.
“I don’t think there is any bubble, neither will it burst,” DLF vice-chairman Rajiv Singh said on 29 May 2007.
India’s booming market has seen property prices double in the last two years, as the economy, growing at more than 9% a year, boosted demand for shopping centres, offices and homes.
However, demand for homes has slowed down after a sharp rise in interest rates, and some analysts and fund managers say prices may drop up to 40% in the short to medium term.
“I think prices will remain steady around levels of today. There could be upward or downward movement, depending on location,” Singh said.
DLF is selling 175 million shares, or 10.27% of the company, at a price band of Rs550-550 per share. Subscription is open from 11-14 June.
The New Delhi-based company expects to spend Rs3,500 crore from the IPO to buy land, Singh said.
The offering will be India’s largest IPO to date, above Tata Consultancy Ltd, NTPC Ltd and Cairn India Ltd, all of which raised just under $1.2 billion.