With the DLF issue to open for subscription, things are getting heated up as investors have more options to invest in this burgeoning sector, which is expected to grow fourfold in next 3 years to $45billion. Precisely with this reason DLF’s nearest competitor, Unitech declared a 1:1 bonus for its shareholders. In the past year, no other company has come as close as Unitech in increasing exceptional shareholder wealth, a testimonial to the rising strength of Indian property space.
The FY07 results of the company showed revenue of Rs. 3300 crores and net profit of Rs. 1300 crores which was largely due to one-time profit of Rs 650 crores from 60% stake sale in six IT Parks to Unitech Corporate Parks (UCP). With its positive guidance and above expected numbers, the scrip rose to an all time high, putting the market capitalization of Unitech at above Rs. 50,000 crore mark. It’s cash reserves of Rs 1,400 crores gives it liberty to expand without putting strain to its numbers.
As compared to its peers, Unitech gains on certain counts – 1) Geographically diversified land bank of 10,500 acres with a developable area of 500 million sq.ft, 2) Most diversified product mix – Residential, Office/IT Parks, Retail Malls, Amusement Parks, Hotels/Convention Centre and SEZs, 3) Reduced focus on NCR, now concentrating on Tier I and Tier II cities, 4) Quick recycle of capital to maximize returns and 5) strong brand positioning and proven track record.
Though there is a wide valuation gap between the two as DLF market cap post listing may be around Rs. 90,000 crores. But they two would be like Infosys and TCS of the real estate sector and If DLF issue receives good demand, then Unitech is sure to get benefited, as people believe that it would then command higher valuations. Ask an investor who bought Unitech’s share in the IPO, he would surely not be complaining, for those who don’t know. his wealth has multiplied a mind boggling 150,000 times from its IPO in 1990. To make it simpler, an investment of Rs. 1,000 in Unitech in 1990 would be worth Rs. 15 crores today (dividends excluded) – Believe it or not.
Find this article at: http://www.labnol.org/india/corporate/will-unitech-gain-from-listing-of-dlf/118/
Tags: dlf, gurgaon, ipo, listing, malls, ncr, noida, property, real estate, retail, sez, unitech, Corporate, India
