D B Realty is entering the capital market on 29th January, 2010 with a public issue of Rs. 1,500 crores in the price band of Rs. 468 to Rs. 486 per equity Share.
The present equity of the company is at Rs. 211.20 crores, which is likely to get raised to Rs. 243 crores, considering issue made at the lower price band of Rs. 468 per share. This will result in a 13.20% equity dilution and expected to have a market capitalisation of close to Rs. 11,500 crores.
The strong point goes in favour of the promoters of the company are, its strong presence in Mumbai City, especially in Central Mumbai, where selling price rules between Rs. 18,000 to Rs. 25,000 per sq. feet, coupled with almost debt free status and strong execution capability.
The company as on 31st December 09, has 11 ongoing projects with saleable area of 19.51 million square feet, 8 forthcoming projects with saleable area of 19.28 million square feet and 6 upcoming projects of 22.24 million square feet of saleable area. The total area of 61.03 million sq. feet, represents the share of the company. Also, the company has presence in pockets of Mumbai like
The promoters of the company have the track record of developing composite housing complexes in the period of 1985 to 2005. About 37 lakh sq. ft. has been developed at Kandivali (West) with about 42 lakh sq. ft. in Goregaon (East). All these projects and complexes are equipped with school, shopping malls, commercial and shopping complexes, multiplexes, community hall, temples, medical centres etc., which has resulted in better saleability and preferred locations of the buyers.
Presently, HDIL has good presence in Mumbai, of which over 50% is in distant suburbs of western Mumbai at Vasai Virar. Also, redevelopment of
The company also has its forthcoming projects coming up at Goregaon, Dahisar, Malad, Mumbai Central, Byculla, Bandra, Kurla Complex and
Considering all this, due to strong presence in Mumbai coupled with debt free status, issue looks good and recommended even at the upper band of Rs. 486. The issue should be able to give good returns, if held with 6-12 months view, as also listing gains, as it is found to be reasonably priced while comparing it, with its listed peers.
One can subscribe the issue even at the upper band.