Big investors swarm DLF IPO

New Delhi: DLF IPO has wrapped up its issue. The subscription numbers are 3.47 times overall, while the qualified institutional buyer, or QIB, category was subscribed 5.13 times. And the high networth individual, or HNI, category was subscribed 1.17 times. However, retail was subscribed only 0.97 times.

Analysts feel that the numbers are inline in terms of how the overall and QIB picture panned out. But on the retail front, they find the numbers dissappointing as it did not get subscribed even once as was expected.

A lot of big investors came and put in money in the issue. Deutsche AMC put in bids of USD 500 million, while HSBC pumped in USD 650 million, the Dubai Investment Group put in USD 550 million, TPG Axon brought in USD 250 million,

Aberdeen put in USD 100-150 million. Three firm, Blackstone, Blackrock and Nomura brought in together in between USD 50 and USD 100 million.

LIC has put in a bid of roughly Rs 500 crore, while SBI has bid with Rs 500 crore. RIL, Reliance Capital and Reliance MF put in bids of Rs 200 crore each.

Considering an issue price of Rs 500, at an interest rate of 15% (Rs 21 per share), the breakeven comes to Rs 521. If the issue price is Rs 515, with the interest rate remaining the same, the breakeven comes to Rs 536. Similiarly, if the issue price is Rs 525, the breakeven is at Rs Rs 547 and in a best case scenario, at an issue price of Rs 550, the breakeven comes at Rs 573, with the interest rate at 15%.

Analysts say that if retail investors have DLF shares, they cannot expect anything exciting in terms of listings and if it does it does it will be unexpected. They feel that there is not much to play on lsitings in terms of how subscriptions panned out and real-estate companies have done, in terms of how they listed vis-a-vis subscription numbers.

With 575 million sq ft of land to be developed over the next 10 years, DLF is one company to be held over a longer period of time, feel analysts.

The positive factors for DLF are its brand value, execution capabilities and its large land bank. The concerns are its concentration of land bank in Gurgaon and NAV per share value of Rs 475. Most South East Asian real estate giants trade at 1-1.3 times market cap per NAV.