Click to play videoNew Delhi: India's leading real estate company DLF is open for subscription with an initial public offer of Rs 17.5 crore shares. On the first day, the issue was subscribed 70 per cent, while the reserved portion of QIB or qualified institutional buyers was fully subscribed within an hour of opening, the company said.
Qualified institutional buyers constitute banks, mutual funds, foreign institutional investors and venture capital funds.
Most of the bids came in at a higher end of the price band at Rs 550. With a price band set at 500 to Rs 550 per share, the IPO opened Monday and will be closing on 14th June.
Retail investors were slow to put in applications by mid-afternoon on concern the offering was pricey at an indicated band of 500-550 rupees each, but bankers said they were expected to bid before subscription closes on Thursday.
"I am a bit hesitant, but that does not mean I would not invest. DLF is a good company, but the pricing is high and one has to stay long term to get enough returns," an investor was quoted by Reuters.
DLF said it had received bids for the full institutional portion of 104.4 million shares. The real estate giant, which built much of the outsourcing hub of Gurgaon on the outskirts of Delhi, merits a premium given its track record and earnings potential with land holdings of more than 10,000 acres (4,000 hectares), analysts said.
Analysts have estimated DLF's price band shows a 9-20 percent premium on its "net present value", or NPV, based on its land holdings and prospective earnings.
"A majority of the global real estate stocks in Hong Kong and Singapore trade at a 10-30 percent discount to NPV," said First Global Securities before the IPO, adding that each DLF share was worth Rs 413 on an NPV basis.
(For updates you can share with your friends, follow IBNLive on Facebook, Twitter, Google+ and Pinterest)
More on IBNLive Right Now
MOST SHARED
PHOTOGALLERY
