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DLF’s KP Singh Becomes Third Indian Trillionaire

Comments Off on DLF’s KP Singh Becomes Third Indian Trillionaire   |   July 24, 2007    02:10pm   |Contributed by Indian Realty News

Kushal Pal Singh, Chairman of DLF Group, has become India’s third trillionaire in rupee terms as the share price of DLF, his flagship company, increased and witnessed stunning profit numbers.

DLF made a net profit of a whopping Rs 1,524 crore in the first quarter. However, the figure stands for only ‘accounting profits’ and have not been translated into an equal amount of ‘cash flow’ into company’s books. And, the company continues to work on negative cash flows.

During the quarter, DLF reported a negative cash flow worth Rs 2,270 crore, on account of sundry debtors and rise in inventory.

As per the company’s quarterly filings, sundry debts rose to as much as 150% during April-June in 2007 and stood for over nearly three-fourths of its consolidated net sales during three month period.

This clearly underlines that the DLF has been following a policy of advance booking for its properties. As such, almost all builders take up the same strategy to show a higher top line. In case of DLF, the range seems to have exceeded the normal limit.

DLF’s IPO has actually come to its rescue as the proceeds compensated for almost the company’s complete closing cash balance at the end of the first quarter. The company had raised Rs 9,625 crore from the primary market in June’07.

DLF averred a 100% dividend for all its shareholders as well as the new IPO allotees. Sundry debtors and the rise in inventory account for around 85% of the reported net sales of Rs 3,074 crore. Now, the question is whether DLF has been managing the payout from the IPO proceeds.

In the meantime, the stock continues to make headlines. DLF’s successful bid for the Dwarka convention centre gave a push to the scrip by about 5%. It would account for the growth by the fiscal years 2010 and 2011.

DLF enjoys the status of being India’s largest real estate company and owns development rights to 574 million square feet of real estate. Of this, 51% falls in the NCR and 23% in Kolkata.

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