Mumbai: A couple of real estate IPOs may
falter from around 15 lined up in the next few months if the
issues are not reasonably priced, a realty consultant said.
"Around 15 real estate IPOs have been lined up. They
plan to raise in excess of USD six billion. I don't think that
all of them are going to have a smooth journey. One or two may
falter, as well," Anuj Puri, Chairman, Jones Lang LaSalle
Meghraj, told reporters here.
Puri said unlike previously, when investors lapped up
issues at any price, this time, investors would like to see
the pricing, the credibility of the developers and their
ability to execute the undertaken or proposed projects, before
subscribing.
"This time, the market will differentiate on three
factors - what's the price, credibility of the developer and
the delivery capacity of the developer."
Investors would like to see how transparent is the
developer, the level of corporate governance in the company,
the brand, the pricing of the issues and how much is left for
the investors to be benefited, Puri said.
"The capacity of the developers is going to be viewed
under the microscope. If one says that he is going to develop
50 million square feet and has completed only five million,
investors are not ready," Puri said.
The market also, he said, does not have the appetite
for USD six billion real estate IPOs as the problem of
liquidity still persists with the real estate sector, which
had been badly hit by the economic slowdown.
"There is no liquidity problem as such in the market.
But, it is a problem for the real estate sector. The market
does not have appetite for so much," he said.
Among the upcoming public issues, Sahara plans to
raise Rs 3,450 crore, Lodha Developers Rs 3,000 crore, Godrej
Properties Rs 600 crore, DB Realty Rs 1,500 crore and Kumar
Builders Rs 450 crore, among others.
Emmar MGF has also filed a draft red herring
prospectus (DRHP) with the market regulator SEBI and plans to
raise Rs 3,850 crore.
Bureau Report
First Published: Sunday, November 15, 2009, 10:13