| Realty show spices up |
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Economictimes.com, August 13, 2007
It’s raining realty in IPOS: The June ’07 quarter was an active one and probably saw a deluge of IPOs from real estate companies. Starting with reality major DLF, the quarter saw close to five companies tap the primary market. Around Rs 13,000 crore has been raised through the primary market route. However, the Puravankara experience reveals the market’s fatigue with realty IPOs. Investors now have enough variety to invest in real estate companies. Realty continues to be a regional play, and is yet to see the emergence of pan-India builders. Most builders are city or region- specific, with each market having its characteristics dynamics.
In the South, players like Sobha, IVR Prime and Puravankara are dominant. While Puravankara and Sobha are primarily Bangalore-based, most of IVR Prime’s projects are in Chennai and Hyderabad. Similarly, DLF, Unitech, Parsvnath and Omaxe are among the larger players in the National Capital Region. There are other specialty players like HDIL and Akruti Nirman, which are basically involved in slum rehabilitation projects in Mumbai. Other examples include Orbit Corporation and Marvel Realtors, which provide an exposure to the high-end luxury apartment space. However, each player has a different business model and the execution skills are incomparable. The quality of land bank and scalability are key to a company’s profile and investors need to closely study them before taking investment decisions.
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