Emaar MGF Land Ltd IPO Message Board (Page 22)

83% land is agricultural and controvertial

Rediff.com.
November 01, 2007 08:19 IST
A disclosure on its land reserves by the joint venture firm Emaar MGF has sparked off a debate on whether a real estate company with foreign investment can own agricultural land in India.

Dubai-based Emaar holds around 41 per cent in the joint venture that is expected to raise Rs 5,000 crore (Rs 50 billion) from an upcoming maiden public issue.


In its draft red herring prospectus that was recently filed with the Securities and Exchange Board of India, Emaar MGF has said 83 per cent of its 12,544-acre nationwide reserves consists of agricultural land.


But the Department of Industrial Policy and Promotion (DIPP) under the ministry of commerce has, on its website, clarified that a real estate company with foreign investment cannot acquire agricultural land.


The DIPP clarification was given in response to a query on its online bulletin board on October 29, 2007. It shows the department has clarified that foreign direct investment (FDI) cannot be used to buy agricultural land, either directly or indirectly through a special purpose vehicle.


The question and answer did not, however, mention Emaar MGF. The company asserts that its land bank is within the ambit of current government policy on the real estate sector and not in contravention of the rules.


In response to a BS questionnaire, an Emaar MGF spokesperson said: "The company is engaged in the business of real estate development and not in any activity in the agricultural sector.

Press Note No. 2 (2005 Series) of the Ministry of Commerce and Industry, DIPP, relates to FDIs in townships, housing, built-up infrastructure and construction-development projects and imposes certain restrictions for such investments, including minimum capitalisation, repatriation of investment and time period for development of the project.

Press Note 2 of 2005 does not relate to acquisition of land and the company does not believe that FDI norms have been contravened."


This interpretation, however, appears open to debate.


PricewaterhouseCoopers Executive Director Akash Gupt broadly agrees with Emaar MGF, saying: "The intention of a real estate company is to develop the land and not to do agriculture."


But another DIPP document says any such land-holding would not conform to the Rules of the Foreign Exchange Management Act (FEMA), 1999. "Forget a non-resident, even a non-resident Indian cannot buy agricultural land," said a well-known lawyer who requested anonymity.


The department, however, has also said that FDI can be brought in once the change in land use occurs, which lawyers confirmed.


Emaar MGF has said it is currently converting another 10 per cent, or around 1,254 acres, of its reserves to non-agricultural land.


"The approval process is a well-defined one and the approval for change of land use is normally obtained within three to six months of application," the spokesperson said. "There is no uncertainty on the change of land use, it is only an issue of timing," he added.

There is one very very solid argument about Emaar. They have over 80% of thier land in agri belt. Land conversion happens in between 6-9 months and that also with a lot of hanky panky. Everybody knows about it.

These guys have very good project reports but nothing as of now in physical form except for one measly golf course, where they are entertaining all of us. Imagine if this company winds up in India and goes back to Dubai. Where does our 6400+ crores go ??

Presently Emaar is constructing world's tallest building in Dubai and many more projects are running worldwide. So, Emaar IPO is good one.

rel power listing price 810.00

DONT APPLY FOR THIS IPO. IT IS HIGHLY VALUED.

AVOID THIS IPO AND BUY PARSVNATH AND BRIDAGE AT CMP TO DOUBLE YOUR MONEY IN 20 DAYS

to all investors.
applying to this issue is your personal choice, but a word of caution for those interested.
even though its overpriced one major argument for supporters is that EMAAR has the second largest land bank after sahara. i can even see people quoting emaar above DLF. agreeed it has huge land bank. but consider this too
80% of its land is agricultural(read not in cities)
it has not even constructed a single plot of sellable property in India. ( a golf course in hyderabad is its achievement, but to fair to the company it is planning to build houses around the golf course - a marketing strategy)
it does not have an inch of land in the retail capital of India -MUMBAI

Think well before investing since the market is so volataile these days. invest in stocks that will give good returns in 6 to 8 months. since DLF is available at 850 these days, i think its a safer bet.

*Repost of earlier message*

Hi all,

This is regarding the Emaar MGF IPO which is being launched. Emaar is a major property developer in the UAE. They buy land dirt cheap, develop it and sell it with huge, and I do mean huge profit margins. The guys are raking in billions. Which leads me to confusion as to why they need to raise an IPO when they can easily pump inhuge amounts of money from the middle east.

Points to be considered:

1) The public issue price is way overpriced and doesnt deserve to be so.

2) The company is facing several litigations in the middle east mainly poor quality of work (focussing on speed of completion and compromising on quality and safety). Purchasers of estates developed by Emaar have complained of poor workmanship, poor quality post-development service. Litigations in progress. Several workers (especially Indians) have died during construction work on their developments. Their familes were not provided any compensation. Emaar and other similar developers are slave drivers who force Indian workers to slog 24 hours a day and of somethign happens to them (death or injury) they are neglected/thrown out. Emaar is interested in making money and Indian workers are paid peanuts - some are paid a measly 2000 to 3000 rupees. Recent labour strikes in Dubai several times in the last year and in protest of this.

It mught be prudent for all to do their own studies, read the news and decide well before jumping into this IPO. This IPO has zero value. Futhermore, it should be boycotted by all indians for the way they treat Indians in Dubai. Invest in indian companies not in outsiders coming to India to rip off the Indian people.

According to Analyst's:

Edelweiss Securities - Subscribe.
Smart Investment - 48%(Good for long term).
R S Iyer (KR Choksey)- Don’t Apply.
Manish Bhatt - Apply.
SP Tulsian - Don’t Apply.
BusinessLine - Invest at Cut off.

Dear Investors,

As I has reported earlier, this IPO is way overpriced. This fact was proven true when they actually revised and reduced the price band last week to invite greater participation from investors (540 to 630 is the revised band). Still I say this is much overpriced.

Capital Market has sumamrized all the information on its website. Even at this price, It has the highest P/E amongst any Indian company. The question is - does it deserve to be so? For a company that has not had started and is currently showing losses. I think this is just a rip-off. Place your hard earned money in much more valued stocks that have proven their worth.

All the best

Arjun

I saw the IPO rating page...and i am agree with Mr Jindal....it looks like good company to me.

on the basis of 4 star rating and after revision of price it is worth subscription

Instead of Emar MGF invest in parsvnath 271 current Price recent High price is 598 and other scripts like GMR infra

hai,i do agree with garg/the issue will open below price like brigade ipo/so avoid

company might be good.. But i feel that all current issues are heavily overvalued. This will not even go for 1 time subscription as it is a big issue.Just imagine more than the half size of rpl issue.

All retailers dont invest for sometime and automatically the premiums for the upcoming issues will come down.

h is this issue of emaar mgf

dear investors, good afternoon emaaar mgf ipo is good ipo, invest in it. good return at the time of listing & also future. in priority fisrt is EMMAR MGF, SECOND DLF, THIRD HDIL,..........ETC.
everybody know position of dlf ltd co.

chak de india

Dont go for it....It is overvalued...Instead u can go for other groups as....omaxe,HDIL,DLF and unitech

I AM NEW TO THIS BUSINESS. CAN SOMEBODY GUIDE ME ABOUT EMAR MGF IPO IN PRESENT MARKET SITUATION. SHOULD I APPLY FOR IT OR NOT.?

Dear investres,
All who apply for this IPO will get full allotment.In addition, the listing gain will also be very less. Avoid this IPO, considering the volume of this IPO and the current market conditions.
Dr PAB