DLF Limited IPO Message Board (Page 43)

Ritesh,
Single application is better than spilit. all the best.

whether should we apply in dlf ipo or not.

Can you suggest for DLF IPO which one is better out of these Two
1) Single Application of Rs 1,00,000/-
2) Split into Two Application od Rs. 50,000/-

Thanks

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Edelweiss India Equity Research - DLF IPO
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Currently, we have valued DLF’s existing land bank only and assumed execution period of 15 years for its residential business (versus management expectation of 10 years). We estimate the value of land for sale at INR 436 bn and the value of its rental business (commercial and retail) at INR 460 bn. Thus, we arrive at an NAV of INR 512-517 per share. The IPO at the price band of INR 500 to 550 is at 2 to -6% discount to its NAV.

Upsides to DLF valuation could arise from: a) the 554 acres of land not included in the land bank plus purchase of new land in the next few years, b) tie-up with Hilton to develop hotels on a pan-India basis (evaluating 22 sites), c) construction JV with Laing O’Rourke and d) venture into large SEZs and MoUs with Nakheel for two large projects.

Thus, the IPO provides option value to the new growth initiatives that DLF has undertaken, which are not included in its current land bank. Further, the company has an existing stock of more than 10 mn sq. ft. in commercial space (including plots) on its own books, which gives it visibility on the profit front. We believe that over a period of time, DLF could trade at P/E multiples rather than on NAV basis, as its project visibility starts yielding regular profits.

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We recommend subscribe to the IPO.
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Comparison with Unitech
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Any valuation discussion on DLF veers on comparison with Unitech, one of the largest Indian real estate companies and the only very large listed real estate company in India. Unitech currently has a market cap of INR 461 bn. We expect DLF to trade at a high premium to Unitech as:

* It has a larger land bank of 574 mn sq. ft. compared with 472 mn of Unitech. Further, DLF has not included the additional 10 mn sq. ft. and 554 acres in its land bank as of now.

* A major portion of DLF’s land is highly-priced and there is considerable clarity on its land holdings, given the good disclosure in its prospectus. This gives the investor community a fair idea of the company’s land bank details. This is however not the case with Unitech, as it has not disclosed its land bank details fully so far.

* Around 51% of DLF’s land is in the highly valued NCR region as against 17% in the case of Unitech. Further, 79% of DLF’s land bank is in metros as against 58% for Unitech.

* Based on street estimates, Unitech is already trading at a 15–20% premium to its NAV. We think this could be due to lower availability of quality large cap real estate stocks in the market. We believe that with DLF’s listing, some of the scarcity premium for real estate stocks may come down.

* We believe that DLF has stronger execution capabilities and greater management competence to manage large businesses.

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Anand Rathi Research - DLF Peer Comparison and Valuation:
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Given DLF’s massive land reserve of 10,255 acres, Unitech is the only best comparison in the industry. A look at the table indicates that the type of development for the two players is almost similar. However the two differ in terms of the quality of land bank (refer exhibit 7 and 8). DLF has a better reach in terms of its presence in number of cities, present in 31 cities. However the quantum of land bank in these areas is small but DLF can spread its reach through its strong muscle power. DLF has its land bank in lucrative areas like NCR and Kolkata. Though Unitech is also present in these areas its land area is comparatively lower.

During FY07, DLF recorded 127% YoY revenue growth and 654% growth in adjusted profits at Rs14.04 bn(after adjuting for the one time sale profit of Rs5.4 bn). The company has registered a healthy 47.5% CAGR in revenue and about 93% CAGR in adjusted net profit over FY03-FY07 period. On comparison to its peers, DLF trades at a premium to its peers. At the higher end of the band at Rs550, DLF trades at PE of 66.8x its FY07 earnings and commands EV/ sq ft of USD 44. We believe that DLF commands a premium on an immediate comparison to Unitech mainly owing to its quality of its land, landmark developments and its skillful project execution capability, proven from its past development records.


It must be noted that apart from the 10255 acres of developble land bank, DLF had added 554 acres since April ’07 and has two townships in JV with Nakheel LLC (UAE) each spread over an area 20000 acres and received in principal approval for two SEZ’s totaling to 3587 acres. In addition to this DLF’s joint venture with Hilton to tap the potentialhospitality sector will further boost the company’s performance.

The huge upside potential from DLF’s several SEZ projects and various joint ventures in the fast-growing areas of hotels, insurance, construction, project management and proven developments in the past rightly justifies the premium that it commands to its peers. At the same time we must consider the volatility in the macro economic scenario in India’s real estate sector considering the hardening of interest rates and probable softening of real estate prices which would affect the developer’s profits. We are upbeat on the company maintaining its robust performance in the long run.

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We recommend investors to SUBSCRIBE to the issue with a long term view only.
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grey mkt:65 rs
not bullish but goodwill & bull run will move this stock up.people might avoid because of learnt lesson from akruti nirman.if bullish buy akruti which is available at very less mkt price than issue price fundamental good.high int rate is only major risk

According to smart investment gujrati weekly broker are paying rs.500/-.to sub broker ands rs.300/-.to applicant on application money of rs.99000/-.for dlf ipo. please check.

Remember Cairn india, Reliance Petroleum two biggest ipo issue. both flop after listing. may be reliance get good listing because of its name. but because of such huge ipo it is not give much gain to retailers

because it is very huge IPO it is sure there will be no great listing gain for retail investors. so it is wise to buy after it settle down after listing.

20 to 40 rupees is the premium

Anybody knowing grey market premiun of dlf?

Hi!!! Please any one advice me how to apply in DLF IPO. @ rs. 150/- (partly paid)or Rs. 550/- (fully paid). a roumour in the market that apply @ rs. 550/- it will be list on 600-650 and than after down to 500-550. is it right. WHAT IS THE ACTUAL PREIMIUM??? any one knows???

Hi Rahul
ICICI Direct allowed partial payment in respect of GMR Infrastructure IPO. So, I believe the same option will be available now also. Only thing is, the first payment was accepcted electronically and the second one was to be made by way of issuing physical cheque. This is for your information.

Hi All,

As everyone saying that DLF has been priced very aggressively. I accept it, but it’s just because of their land bank.

Some of the comments were about the history of DLF between FY 2002-2004.
Well I would like to give some fundamental and logical view with respect to current and past real estate scenarios.

As per the history of DLF, I read that DLF did not mark well during 2003 period.
But if you will compare the Indian Market and Real estate between 2003 and current period, then you will realize that the progress of Real estate and Indian economy is more than the expectation. During 2003 not only real estate but many other sectors was also in the financial crunches or not profitable.

Fundamentally DLF is dealing in 3 categories of development like Residential, Commercial and SEZ construction. When we say that the real estate is down that doesn't mean it will affect the entire above all 3 categories. If you will analyze the construction data then overall construction will grow in the same pace.

Now DLF has so many future projects, as recently in past couple of days we heard that DLF is coming up with Fortis as JV for Hospital construction and management for more than 31 cities.

Even DLF has so many other JV for Hotel and SEZ development, fundamentally we can say that DLF has much profitability in future but currently it is highly priced just due to Land Bank, and I think it is true.

As we know that land price is always major factor for any kind of development, so land bank is only the plus point for DLF, no matter what would be the price of land in future.
In the land-bank concerns DLF can give the satisfaction for share holders for the future project development and profit.

So above was the logical thought for DLF with respect to past, current and future real commercial, residential or SEZ development.

Now let’s talk about the DLF as an investor’s point of view:

Well first think is DLF is purely high-risk high-return, for small scale investors they should think for middle term or long term investment. If small investor eagerly investing bunch of money just for listing price profit then I would like to say that they can gain profit between 10 to 15% on listing. But if we consider for middle or long term then definitely you can see the 1200 level.

So long term investors DLF is good but for short term investors, they should avoid and they can invest in some other script which can give the higher return on lower investment.

As we had seen that recently MIC Electronic had given good profit on listing but the same thing will not happen for DLF as the size of IPO is big and I think it will not oversubscribe more than 4 times with compare to 50 times oversubscription of MIC.

Hi Friends,
I am exploring partial pay option of DLF IPO. Here is a fact:

If DLF IPO will not oversubscribed in retail section by more then 4 times, the allotment of shares for applicants who has applied in Partially Paid option will take 4 more weeks then the normal allotment. This includes process of paying remaining amount etc.

There is a huge possibility that issue may not get more then 4 time oversubscribed in retail quota as it’s a huge IPO. In this case people who are looking for listing gains should not apply in Partial pay option.

If DLF public issue oversubscribed in retail section by more then 4 times then all the retail investor who applied through this option will get allotment along with others and may enjoy listing gains.

Partial Payment amount is Rs. 27000 /-

Vikram

Hi Rahul,
I am not sure if you can apply using partial payment method through ICICIDirect.
I don't thing there software support this.

What you can do here is:
1. Call ICICIDirect Helpdesk or send them an email about your query.
2. Apply in traditional way by filling the form and attaching a check with it.

Vikram

hi vikram,
pls tell me , how can we use partial payment via ICICI Direct

DLF IPO Market Lot & Minimum Order Quantity = 10 Shares

You can max apply for 180 Shares * 550 Rs (total Rs 99000).

You can also use partial payment system and pay 180 shares * 150 Rs (Total Rs 27000) for share of Rs 99000.

BRICS Securities have correctly valued DLF at Rs 320-350/Share.

They have also come with schemes like invest Rs 27000 for
investing 1 Lakh which could be sold only after 27 days after paying the remaining due amount when the company demands.

The DLF thinks retail investors are fools or what !!!

For all those who wish to invest in the IPO of DLF some points to remember very clearly:
1.This company is coming out with an IPO when the real estate sector has more or less peaked and the valuations of land and property is the highst in an area where this company has maximum exposure(Gurgaon).If at a bloated price the market value of land is calculated and the NAv comes to a huge figure that does not mean that the amount or value is realisable Would there be buyers if the property is put for sale---NO.
2. In the document filed in May, the company had published valuations made by Cushman & Wakefield (Rs 77,000-85,000 crore) and Jones Lang LaSalle (Rs 85,000 crore).

However, not all of the land bank that it holds now has been fully paid for; DLF still owes Rs 5,537 crore to different parties. The developable area has now been increased to 574 million square feet as against 102 million sq ft declared in the original offer document filed in May 2006. About 29 million sq ft developable area is held through joint ventures with others.
3.This is a company which will fullly defrauded its own shareholders in its previous avatar and is now trying to come back tpo the markets to make its promoter the richest indian using our money for valuations.

plese find below the DLF saga before the previous shareholdrs issue was sorted out through the ministry of company affairs.SEBI had to refer it to the GOVT as it was a sheer case of greed .

THIS WAS BEFORE THIS TIME APPROVAL OF IPO
Here is a look at what DLF’s minority shareholders have to say. The promoters of DLF today own 99.5% of its equity. The remaining 0.5% is held by investors who chose to stay on when DLF delisted the shares. DLF was a listed company until 2002-03, but its promoters increased their holding beyond 90%, admittedly in violation of Sebi’s Takeover Code. They admitted the lapse, paid a fine of Rs 5 lakh and made an open offer to the public at Rs 320 per share to buy out minority shareholders and went private.

Around 1,308 shareholders chose to hang on to their shares. Such shareholders invariably lose many of the privileges available to investors of listed companies, but since DLF intends to raise public money again—that too within three years of its September 2003 delisting—it cannot get away by leaving residual shareholders in the lurch.

These shareholders allege that the company made a rights issue of partially convertible debentures in a 1:1 ratio last year, but omitted to post the offer letter to 90% of the minority investors. The lucky 10% who got the letters and will profit enormously are all closely connected with the company. These debentures have since been converted into 10 equity shares each. Further, the company made a bonus issue in the ratio of 7:1 and then split the face value of shares to Rs 2 each.

Those who did not get the rights offer were thus deprived of 400 shares each against each share held on the record date. Since the promoter holding is 99.5%, it is clear they did not want to share the bonanza emanating from their massive capital restructuring exercise with the 1,308 investors who clung on to their share holding.

DLF’s vice chairman Rajiv Singh insisted to us that the Offer Letters had been posted and that investors failed to apply for debentures because they did not see value in the company. He also says that several of these investors are brokers who simply misjudged the rights offer.

But the company took care to build-in serious disincentives. The partly convertible debentures carried a 2% interest and were to be convertible anytime over the next 20 years. The letter also made the misleading claim that the company had no plans to re-list its shares on the stock exchanges. Naturally, minority shareholders have written to Sebi alleging breach of trust.

DLF’s claims about having sent the Offer Letter are also debatable since I have received several letters from genuine investors such as Kiran Parghi who holds 40 shares or Major Jasbir Singh (retd.) who are ordinary investors who have not received their offer letters.

The Midas Touch investors’ association has a different allegation. It has written to Sebi saying that DLF’s Earning Per Share (EPS) stated as Rs 12.84 is misleading and it ought to be Rs 1.32 as per Sebi guidelines.

It may well be that allegations against DLF are extra shrill because the incredible post-listing valuations reported by the media has heightened the sense of loss. Clearly, if the offers were not posted investors have a right to demand restitution.

The speed with which the IPO has been finalised shows that listing was part of the agenda even when the rights offer was made.

Companies such as Infosys have made millionaires out of thousands of investors, while DLF’s promoters want a place in the global rich list while depriving 1200 of its die-hard investors their claim to justifiable profits.

Please look before putting ur money.