Two issues namely Parsvnath Developers and Lanco Infratech are open for subscription. Even though both are good companies, subscription figures are not satisfactory till date. Parsvnath has been oversubscribed by 5.16 times while Lanco subscribed just 1.87 times. Why is there so much difference between them?

Experts like RS Iyer of KR Choksey, SP Tulsian, Investment Advisor and Manish Bhatt of Prabhudas Lilladher give their views on both issues:

Experts believe that both are excellent companies but differ in returns.  They feel that Parsvnath is good for the short term as well as for the long term but Lanco is good only for the long term.

Parsvnath Developers

Parsvnath Developers is one of the leading developers in real estate industry with a pan India presence. The company has completed nine housing and eight commercial projects spread over 3.5 million sq ft till date. PDL currently has development rights for an estimated 108.6 million sq ft of saleable area spread across 90 projects with an estimated cost of about Rs 132 billion.

RS Iyer: Parsvnath Developers is one of the leading real estate plays. It is an excellent issue. It is good for short term as well as long term.

The fundamentals are also good. Its counter demand is very attractive. It has good brand than Unitech in the market. The price is very good and attractive. It should list above Rs 440-450.

Manish Bhatt: Parsvnath is an excellent issue. Investors should apply for this issue. They should get good returns over long term.

SP Tulsian: It is a good issue. Investors should apply for this issue at higher price band. It is a good experience. Its profitability is on increase. As compare to its peers like Ansal Properties, Peninsula Land, Anant Raj etc, its price band is reasonable and cheap. It has a land bank of 11 crore sqft, which is saleable.

Keynote Capitals suggested that investors may subscribe to the issue with a medium term perspective.

ASK Raymond James is positive is positive about Parsvnath's diversified real estate portfolio; strong PAN India presence and management ability and thus recommend investors to subscribe to the issue.

India Infoline could see some value on listing, there is much more in store for the long term. So the firm advised investors to subscribe to the issue with a 1-2 year time horizon.

Comparison with listed peers

Lanco Infratech

Lanco is an infrastructure development company. The company has primary interest in segments like power, construction and property development within the construction space. The current order book with the company is Rs 16.2 billion.

RS Iyer: Lanco Infra is a good issue but counter demand is not that great as Parsvnath has. Investors can apply for this issue. Its price band is very expensive.

Manish Bhatt: Lanco Infratech is an excellent issue. It has a benefit of land bank. Price band is good. Investors should subscribe to this issue. They should get good returns over long term.

SP Tulsian: Lanco Infratech is a good issue for institutional investors because its projects, which have long gestation period. The benefits of these projects will start reflecting in the balance sheet from FY10 onwards. They are into properties and power projects. Even though retail investors want to apply, then they can go for lower price band.

Finquest Securities feels that the model of Lanco’s looks attractive from a long term view. The issue is priced at 142x the upper band of diluted FY2007 annualized EPS of Rs 1.7. The firm is positive on the company’s future prospects.

Parsvnath Developers, the Delhi-based real estate developer, is open for subscription with an initial public offer, IPO of 3.32 crore equity shares of Rs 10 each through 100% book building process.

The funds raised from the equity issue are to be deployed in various ongoing projects across India.

Lanco Infratech, an infrastructure development company with interests in power generation, construction and property development, is entered the capital market with an initial public offering of 4,44,72,381 equity shares of Rs 10 each for cash at a price to be decided through the 100% book-building process.

By Sunil S Matkar