Real estate IPOs - the emerging trend - Indian Real Estate Forum

07-11-06

Real estate IPOs is the emerging trend in the Indian real estate sector. There have been several instances when Developer groups have launched their IPO; but without much success.

Here is the latest addition, as Parsvnath Developers Ltd joins the IPO bandwagon.Your say on this issue.....

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Parsvnath Developers Ltd come out with IPO

The IPO of Parsvnath Developers Ltd opened on November 6, 2006. The company is issuing 33,238,000 equity shares of Rs.10 each at a price band of Rs.250 to Rs.300 per share to be decided through 100% Book Building process. The issue also has a green shoe option of up to 30,87,800 equity shares to be offered by Parasnath and Associates Pvt Ltd, one of the promoters at the issue price. The issue and the green shoe option if exercised in full, will aggregate 36,325,800 equity shares.

The issue comprises a net issue to the public of 33,038,000 equity shares of Rs.10 each and a reservation for eligible employees of up to 200,000 equity shares of Rs.10 each at the issue price. The issue will constitute 18.30% of the fully diluted post issue paid-up equity capital of the company assuming that the green shoe option is not exercised and 19.67% assuming that the green shoe option is exercised in full.

The issue opens on November 6, 2006 and closes on November 10, 2006. The minimum order quantiy is 20 shares and further lot should also be in multiples of 20 shares.

The book running lead managers to the issue are JM Morgan Stanley Private Ltd, Enam Financial Consultants Private Limited, DSP Merrill Lynch Limited. The registrar to the issue is Intime Spectrum Registry Limited.

Parsvnath Developers Ltd is one of the leading real estate development companies in India with operations in 41 cities and 14 states of India. As of October 15, 2006 the company directly owned or held development rights for an estimated 108.64 million square feet of saleable area.

Source: Equity Bulls

Bingo · 08-11-06

As we all engage ourselves in the hullaboo about the Parsvnath IPO, Here's what the industry experts have to say:

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Though the Parsvnath Developers IPO is aggressively priced, it could bring listing gains and can also be a rewarding long-term story, say experts

The real estate developer plans to raise funds in the range of Rs 826 crore to Rs 991 to fund its eleven residential and commercial projects spread over the next four years. While money raised through the issue will fund a large part of the total requirement of Rs 1,428.5 crore, the rest will be financed by borrowings and customer advances. As the speedy pace of new construction continues in towns and cities across the country, real estate stocks are attracting a lot of investor interest.

Valuations
The Parsvnath stock is valued at 41.6 times its pre issue FY06 earnings per share at the cap price and 34.6 times at the floor price. The price multiples of comparable players like Ansal Housing and Unitech stand at 19.3 times and 391 times their FY06 earnings.

According to analysts, the stocks seems to be aggressively priced, however they advise investors to subscribe to the issue as Parsvnath Developers is likely to bring substantial returns in the long term.

Though going by the historical earnings, the issue looks to be dearly priced; land bank value and future earnings visibility do make Parsvnath a good investment opportunity.

- Business Standard

14-11-06

Real estate IPOs have always been the sceptical issue which people would think and rethink before investing. But maybe the good response from Parsvnath IPO will bring changes in the business plans......

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The huge over-subscription of the Parsvnath issue has set the sparks flying for real estate stock investments.

Industry analyst believe that real estate IPOs will definitely see significant response from investors and that Parsvnath Developers definitely has paved the way for that. This particular offering has definitely paved the way for other IPOs from the real estate sector. DLF will be coming in but even before DLF, we are bringing in Sobha Developers to the market and other real estate IPOs will definitely see significant response from investors and Parsvnath definitely has paved the way for that.

Experts at JM Morgan Stanley believes that markets are supportive, people are supportive, corporates are showing the performance and hence, this is the right time to raise capital.

The other issue is that this is the first real estate IPO in the market and the first one sets up the tone and the pace. The matrix for valuation will be decided over the period of time but this sets the tone.

- moneycontrol

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