With first PE infusion, DLF is rightly betting big on mid-housing
In July 2007, DLF expectedly shook up quite a few foundations with its public listing, through which it raised a whopping $2.25 billion. It’s almost six months since & memoirs of the event may be on the wane, but what simply refuses to fade is the motive that swayed DLF to shun its traditional unlisted identity. Of course, what else than its mounting urge to be at the helm of Indian realty!
On the heels of its tie-ups with US based Hines
for a multi-million dollar project in Gurgaon and Dubai’s Limitless Holdings for a gigantic $15-billion township near Bangalore, DLF, which posted robust revenues of Rs.32.5 billion for the quarter ending September 2007, has just diluted 49% equity stake in eight of its residential projects to Merrill Lynch & Brahma Investments. That’s well in sync with its strategic objective to focus on home business & of course, to grasp a whopping Rs.16.85 billion (interestingly, the exact value, which it had locked while acquiring a 38-acre land from DSCL recently). While the company is observing a silent mode on these moves, R. K. Gupta, MD, Taurus MF told B&E, “DLF is now leveraging its huge land bank across top-tier growth cities for equity sharing. Definitely a move that will not only add to its growth story but will also mitigate the risk involved with the projects.”
Indeed, DLF now seems to maximise its margin by developing constructed units rather than just accumulating land or developing plot sales. And it has decided to enter into the highly lucrative mid-housing market (Rs.4-5 million bracket); as opposed to the hitherto focus on luxury & super luxury housing. Considering that Indian realty is poised to grow over seven times to $90 billion by 2015 (Moody’s Investors Service) and the massive housing shortage of about 90 million housing units, this should definitely prove beneficial for the company in the long term.
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Source : IIPM Editorial, 2008
In July 2007, DLF expectedly shook up quite a few foundations with its public listing, through which it raised a whopping $2.25 billion. It’s almost six months since & memoirs of the event may be on the wane, but what simply refuses to fade is the motive that swayed DLF to shun its traditional unlisted identity. Of course, what else than its mounting urge to be at the helm of Indian realty!
On the heels of its tie-ups with US based Hines
for a multi-million dollar project in Gurgaon and Dubai’s Limitless Holdings for a gigantic $15-billion township near Bangalore, DLF, which posted robust revenues of Rs.32.5 billion for the quarter ending September 2007, has just diluted 49% equity stake in eight of its residential projects to Merrill Lynch & Brahma Investments. That’s well in sync with its strategic objective to focus on home business & of course, to grasp a whopping Rs.16.85 billion (interestingly, the exact value, which it had locked while acquiring a 38-acre land from DSCL recently). While the company is observing a silent mode on these moves, R. K. Gupta, MD, Taurus MF told B&E, “DLF is now leveraging its huge land bank across top-tier growth cities for equity sharing. Definitely a move that will not only add to its growth story but will also mitigate the risk involved with the projects.”Indeed, DLF now seems to maximise its margin by developing constructed units rather than just accumulating land or developing plot sales. And it has decided to enter into the highly lucrative mid-housing market (Rs.4-5 million bracket); as opposed to the hitherto focus on luxury & super luxury housing. Considering that Indian realty is poised to grow over seven times to $90 billion by 2015 (Moody’s Investors Service) and the massive housing shortage of about 90 million housing units, this should definitely prove beneficial for the company in the long term.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
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