DLF Makes Sizzling Debut on Bourses

July 9, 2007	(Be the first to rate this story!)  Loading ...
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India’s top real estate company, DLF Ltd. has come out with flying colors on the exchanges which is indicative of growing importance of the country’s real estate market.

The property market in India is believed to grow from a $12 billion to $50 billion by 2010. And, with the successful completion of DLF equity shares, the sector has certainly made a quantum jump.

DLF mopped up $2 billion plus (Rs 918.75 crore) and post listing its market capitalization is nudging Rs 100,000 crore. With this, the company has fetched a total market capitalization of around Rs 1, 70,000 crore. This constitutes for 4% of the country’s total capitalization, but the real estate will play big role in both domestic and international market.

At present, the penetration in both the commercial and residential segments remains low. Data showcased by the Planning Commission places the shortage near to 22 million accommodation units. The demand for residential units is primarily driven by a younger population with higher disposable incomes.

Indian real estate has great potential for growth which is bringing great money, says Abheek Barua, chief economist, HDFC Bank. The market is sure to attract attention of Private Equity (PE) players and prospective cross-border investors through the route of Foreign Direct Investments (FDI).

Also, corporatisation of the space will help Indian builders to woo funds. An increase in number of companies being represented on the bourses will bring greater transparency, accountability, and corporate governance.

Around $15-$18 billion is likely to have been invested in projects, with the government relaxing the FDI norms in March 2005. Many prominent foreign investors such as Blackstone, Morgan Stanley, and Emaar have parked heavy funds, says Sanjay Dutt, deputy managing director, Cushman & Wakefield.

Our property market actually needs to develop to encourage an active participation from players like pension funds, endowment funds and insurance companies, adds Dutt.

News Published Under:   Real Estate Developers |