Real estate is the flavour of the season.
MUMBAI: Real estate is the flavour of the season. On Friday, DLF Universal, a Delhi-based real-estate firm owned by Kushal Pal Singh, filed a draft prospectus with the securities regulator to sell up to 219 million shares to the public and institutional investors.
Though the exact amount of money to be raised hasn’t been disclosed yet, merchant bankers say privately that the target is in the range of Rs13,500-14,400 crore.
This would make it the country’s largest single equity issue. The exact amount raised would depend on how the Rs2 face value share is priced, but that decision will come only after the Securities and Exchange Board of India clears the issue, scheduled for early June.
After the issue, Singh will still hold around 88 per cent of the company and could become the country’s richest resident with net wealth in the region of Rs90,000 crore.
Another real-estate firm, Uni-tech, announced a huge issue of free shares to investors.
The company’s board said shareholders would receive 12 free (bonus) shares for every one held.
Additionally, it announced a 1:5 split in the face value of the share from Rs10 to Rs2.
This means Unitech shareholders will receive 64 new shares of Rs2 each against every one of Rs10 held now.
On the stock exchanges, meanwhile, real-estate shares are having a ball, with almost all giving returns in excess of 100 per cent over the last five months. Lok Housing of Mumbai has been the star performer, with its share rising 1,414 per cent since January 2.
Unitech, having announced the mother of all bonus-cum-stock splits, saw the next highest jump of 760 per cent, closing at Rs9,377 a share on Friday.
A year ago, these shares were available at a throwaway price of Rs365. Investors who had latched on to Unitech then would have multiplied their money 25 times. Unitech’s promoters, who own 60 per cent of the Rs500 crore company, are currently worth over $1.5 billion.
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