Home | Ask Questions | Computer Gupshup | Free Member Diaries | Contact Us - Sanjay @ 98 712 19911

Realty stocks took a tumble on the bourses and many logged their 52-week low on Monday


By Sumit Kumar, Section GN
Posted on Mon Sep 29, 2008 at 11:42:23 PM EST

The BSE Realty Index closed at a 52-week low at 3,407.87, down 5.26 per cent. It had dropped 16.79 per cent over the week from 4,095.50, and 31.78 per cent over the month. In January, the index clocked a high of 13,848.09.

Over the week, almost all real estate company stocks have taken a hammering, dovetailing the Sensex's fall with the negative market sentiment at an all-time high, which this week is compounded by the wait for the US congressional nod for the $700-billion bailout package for bankrupt investment firms there.

Delhi-based DLF Ltd stock closed at Rs 350. 60, 5.12 per cent lower than its previous close. The DLF issue was priced at Rs 525. (52-week high - Rs 1,225, low Rs 329)

Buyback
In July, the company announced its buyback intention of up to Rs 600 a share for Rs 1,100 crore.

On September 18, it informed BSE that its board of directors would meet on September 30 to consider and approve a public announcement with the proposed buyback of equity of the company.

Sobha Developers' stock suffered a 9.59 per cent drop, closing at Rs 171.55. The issue price was Rs 640 (Rs 1,060, Rs 164.50). Puravankara Projects traded at Rs 154.05 at close, down 3.14 per cent. The IPO price was Rs 400 (Rs 535, Rs 132.05). At close, Omaxe stock traded at Rs 96.05, down 4.38 per cent, far below its issue price of Rs 310 (Rs 613, Rs 93.60). Housing Development and Infrastructure Ltd was at Rs 166.05, down 13.72 per cent lower than its previous close (Rs 1,432, Rs 160.20). Parsvnath Developers was down 7.04 per cent at Rs 89.85 (Rs 598, Rs 86.60).

Among the marginal declines, was Ansal Infrastructure at Rs 77.30, down 4.13 per cent, and Unitech, which lost 1.98 per cent at Rs 108.85, but recovered from day's of low Rs 97.5, which is its 52-week low. Of the many investments Lehman Brothers made in India, Delhi-based Unitech received about $175 million (Rs 740 crore).

Click on "Full Story" for more...

Mr Hardeep Dayal of Centrum Broking Pvt Ltd said it was a knee-jerk reaction as the medium and long-term story remains strong. Market sentiments were down and only need-based buying was happening. People have held back their decisions to purchase properties, in anticipation of a price fall which is real. Mr Dayal was however, hopeful of a turnaround in a year.

Liquidity crunch
Enam Securities Researchers pointed out that aggressive land acquisition at peak prices through short-term high cost debt and huge working capital mismanagement (short-term debt used for long-term projects) were some of the ills that plagued the industry. Moreover, developers had stubbornly held on to selling prices and high-cost inventories, hoping for a renewal of demand and hike in prices.

Enam said the realty business model consists of three stages of value creation -- land acquisition/aggregation and conversion, construction and development, and the lease/sale of the property.

The whole business model depended on the ability to infuse cheap monies at the earliest stages, including additional infusion through exits at the end of each stage, to be able to funnel monies back to stage 1 -- land acquisition. Further, as each project funds another in this working-cap intensive business, liquidity is the key exponentiator of the business. This funnelling process has now unravelled. With decreasing options, distress-sale of land parcels was the only option for some.

Source: Hindu Business Line, Sep-30-2008

< HVPNL to spend INR 720 crore in Gurgaon power transmission | Tenants in southern India suffering, Landlords demand high deposit money >

Win A Jeans Twice a Week
&
Win A Kurta 7 Days A Week

Login

Membership has its privileges. Choose a username and provide a working email - that's all it takes to join. Click below to make a new account.
Make a new account

Username:
Password:
Bangkok
BIHARSCOOP.COM
JEWELRYFRIEND.com

Who's Online? (37)

. babu bhai
. Unregistered Visitors (36)

Note: You may cloak yourself from appearing here in your Display Preferences.

Recent Comments

. where is the bottomline. (babu bhai)

. errata (fubar)

. Why Stocks are a better investment than realty (fubar)

. malikboss (babu bhai)

. Awesome! (dheerajmatta)

. Price cuts (dheerajmatta)

. Complete Panick (RigidRock)

. But, where is MalikBoss? (aka)

. glad to see you back (sush)

. jai mata di (sudhirkataria)

Recent Member Diaries

PAYING GUEST ACCOMODATION AVAILABLE
by Freeman - November 14
58 comments


Paying Guest Accomodation for Girls in Sushant Lok
by poonam23 - November 13
38 comments


Skoda Amb 2002 VIP Number for sale
by phugatboy - November 13
5 comments


Unitech's Strategy for coming years
by malikboss - November 2
37 comments


Is there a blind home in Gurgaon?
by SGARG - October 30
8 comments


Traffic Jams on the Roads
by Pradeep - October 16
13 comments


SANTRO XING FOR SALE
by satishcmishra - October 15

Breeding nurseries of mosquitos for DLF city
by RAJKUMAR77 - October 11
1 comment


PREVENTIONS IN THE SEASON OF DENGUE
by sumandua - October 11

KLJ TOWN PLANNERS PVT LTD
by nd - October 4
28 comments



More Diaries...

Front Page

Wednesday November 19th
. HSIIDC to acquire 8709 acres of land, set up 33 projects (0 comments)
. DLF requests Haryana to refund licence fees worth Rs 235 crore In A Bid To Boost Its Cash Reserves (0 comments)
. DLF Creates A New Money Spinner - Converting Residential Plots Into Paid Parking (5 comments)
. CREDAI appeals for reduction in residential property prices (0 comments)
. Haryana's forest department demolishes encroachers' properties (0 comments)
. 'Lending Rates Must Fall By Another 3 Percentage Points', In An Interview With K V Kamath (1 comments)
. High Inflation,Interest Rates, Low Valuations - What Does This Mean to India's Growth Prospects? (0 comments)
. National Housing Bank (NHB) May Help Construct More Roofs For Aam Aadmi (0 comments)
. Emaar MGF looks at lower-priced houses (0 comments)
. Real estate, hotels, best placed to offer discounts (0 comments)
. DHVBN all set to introduce on-the-spot billing and collection system within a month's time (0 comments)
. Underground water table falling by 22 feet in last three years in Gurgaon (0 comments)
. RIL SEZ In Gurgaon And Jhajjar Districts Of Haryana To Lay Off Workers (0 comments)

Tuesday November 18th
. New facility for Delhi-Gurgaon expressway users, "smart tag" through mobile phones (0 comments)
. India's Property Developers Focus on Mid-Income Housing (0 comments)
. Realty Sector Growth 'Unsustainable' and Unaffordable For The Major Chunk Of Indian Population (0 comments)
. Realty players want loans reworked (0 comments)
. India Property Prices, Rents May Fall Up to 30%, Goldman Says (0 comments)
. Unitech to raise funds through stake sale in hotel projects (0 comments)
. Indian executives sound crisis alert (0 comments)
. Raheja Developers Served Legal Notice for False Statements, Coercion & Diversion of Funds (0 comments)
. 4 Engineering Students: Their anxieties in today's slowdown (0 comments)
. 31pc have alarming levels of bacteria; waters of Yamuna, Satluj and Sabarmati not fit for drinking (0 comments)
. Haryana government has started Work on foot bridges on Gurgaon expressway (0 comments)
. Over 250 resident welfare representatives come under one roof to fight for better amenities (0 comments)
. Government should ensure higher supply of housing: K.P. Singh chairman of DLF (0 comments)
. Finance Minister P Chidambaram asks airlines, auto & real estate firms to cut rates (0 comments)
. DLF to fire some employees, wants interest rate at 7 per cent (0 comments)
. Liquidity, not demand main concern: Realty experts (0 comments)
. Haryana asks top officials to pay field visits regularly (0 comments)

Monday November 17th
. RBI allows housing finance companies to raise funds from overseas (0 comments)
. Reserve Bank of India (RBI) Spur Real Estate Lending? (0 comments)
. ICRA revises rating on DLF`s short-term debt/commercial paper (STD/CP) program (0 comments)
. Banks Hike NRI Deposit Rates By 75 Basis Points To Attract Foreign Currency Resources To Country (0 comments)
. Haryana keen to strengthen infrastructure: Minister (0 comments)
. HSIIDC To Acquire 8,709 acrs Of Land, Set Up 33 Projects An Estimated Investment Of Rs 2,000 cr (0 comments)
. Mahindra Lifespace Earmarks Rs 400 crore Budget To Go The Green Way (0 comments)
. Parsvnath ties up with Constructora San Jose (0 comments)
. Banks May Not Ease Lending To Real Estate Developers (0 comments)
. Real Estate Firm Unitech eyes $100m via share sale (0 comments)
. Unitech Puts Its 200-Room Budget Hotel Courtyard By Marriott in Gurgaon Up For Sale (0 comments)
. Indian Property Prices Should Drop More, Godrej Says (0 comments)
. Haryana government launches schemes to empower women (0 comments)
. Realty stocks hit badly despite RBI's revival measures (0 comments)
. Black money still seems to be having a vice-like grip on real-estate transactions in India (0 comments)
. Crisis Forces Special Economic Zone (SEZ) Developers To Review Plans (0 comments)
. RBI sop fails to lift real estate; banking follows suit (0 comments)
. No slowdown in realty projects: Mahindra & Mahindra Ltd Executive Mr Arun Nanda (0 comments)
. DLF Park Place, Gurgaon - Construction Status? A Go / No-Go deal for investment? (5 comments)
. Realty Gloom Trickles Down To Smaller Cities (0 comments)

Older Stories...


All trademarks and copyrights on this page are owned by their respective companies. Comments are owned by the Poster. The Rest (c) GurgaonSCOOP.com and QBTPL.
Home | Ask Questions | Computer Gupshup | Free Member Diaries | Contact Us - Sanjay @ 98 712 19911