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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that “there are huge inequities in the world. Even better-off citizens in most of the developing world face worse opportunities than the poor in rich countries. The fact that the country of birth is a key determinant of people’s opportunities runs counter to our view of equity.” Whatever the WB thinks of equity, it is at best only half-true. A close scrutiny will clearly exemplify that inequality has helped less developed nations to achieve economic growth and prosperity. Had it not been for the fact of inequality of income and cost of living, none of the billions of dollars of investments that has been pouring in China and India for over a decade now would have come. It is because of the relative backwardness and the consequent low cost that inspired the Western world to outsource most of its IT related work and production to India. It not only has helped India climb up the ladder faster than otherwise but also allowed it the leeway of time and energy to learn from such technology and business models to develop its own version of multinational companies. All this, thanks to the sheer inequality that existed, and is still existing between the First and the Third World. After all, even water doesn’t flow from a waterfall unless there’s difference in altitude. Hail inequality at times.
laptops have revolutionised the concept of working from home as well as working on the move? Year wise, the growth that the Indian PC market is experiencing is tremendous – across all form factors in the IT industry, fuelled by robust demand from large enterprise, SMBs, government & education segments. “2008 will see more escalation in the demand for notebooks”, avers Rajan Anandan, VP & GM, Dell India.
10% of the industry’s retail profits are realised from just 10 big cities across the country. “There are less than 1,500 offices of all AMCs put together while SBI alone has over 10,000 branches. Moreover, with only around 60,000 ARN holders (persons authorised to sell MF Units) as compared to 20 lakh insurance agents, the situation is really poor,” agrees Sudip Bandopadhyay, CEO, Reliance Money. No doubt, the margins are less from rural business but it’s indeed one area from where the growth would be flowing in. As such the industry now needs to focus on increasing the touch points with the customers in rural areas along with Tier-II and Tier-III cities in order to tap in the real growth. Nevertheless, with mounting competition, tapping the untouched avenues is now a matter of compulsion rather than choice! The industry experts too believe that until fund houses realise this, it’s very hard for them to sustain in the long run. And why not? With more and more players biting into the same pie of urban investors, the industry definitely seems heading towards a deadly war zone.
are out there buying assets and brands in the name of M&As. As compared to even the first two months of 2008, the price per deal during March-April 2008 has fallen by a heavenly 11.18% to touch $46.40 million with even the total deal count falling by a huge 22.53% to just 141 (as per Grant Thornton’s DealTracker) – a clear antithesis of inflation in recent times.