India -- Shares of Indian property company Housing Development & Infrastructure Ltd. made a modest debut, buoyed by hopes of growth prospects in the country's real-estate sector over the next few years.

HDIL's shares closed on the Bombay Stock Exchange yesterday at 558.60 rupees ($13.92), up nearly 12% from the initial public offering price of 500 rupees and outpacing the benchmark Bombay Sensitive Index's 0.4% rise on the day. Almost 15.7 million shares were traded.

Analysts expect the company's shares to reach 620 rupees to 645 rupees in a year, driven by strong demand for housing, office and retail space in India.

National Stock Exchange member S. Tulsian said that while HDIL doesn't look expensive in comparison with its peers, the valuation seems stretched when HDIL's inferior land bank is taken into consideration.

At current levels, HDIL trades at 31.3 times its earnings per share in the year ended March 31, 2007. In comparison, Parsvnath Developers Ltd. trades at 26.2 times earnings, Sobha Developers Ltd. at 42.9 times earnings and Ansal Properties & Infrastructure Ltd. at 31.6 times.

The property company said it had about 10.09 million square meters of land reserves as of May 31. Of this, almost 83% is in the Mumbai metropolitan region, while the rest is spread in pockets across the country.

HDIL Managing Director Sarang Wadhawan said in a television interview that the company expects to complete development of between 720,000 square meters and 810,000 square meters in the fiscal year, which ends March 31, 2008. He added that analysts have forecast the company's revenue would be between 20 billion rupees and 22 billion rupees this fiscal year, "and we hope to make that figure."


Source: The Wall Street Journal
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