DLF hits new life low of Rs 475, Realty Index down 58%

DLF BSE | NSE 10/02/12 Are Mutual Funds betting on DLF?

Markets have taken huge beating in last few sessions due to rise in crude, some subprime crisis, inflation concerns, RBI not softening interest rates etc. The Sensex has slipped below 15000 mark while the Nifty breached 4500 level during the day.

Amongst sectors, Realty Index has hit hardest, slipped by 7.05% or 437.65 points to settle at 5,772.65. If we see since this correction started in January 2008, it has corrected over 58% from its high of 13848.09.

DLF has hit new life low of Rs 475 and closed at 481.55, down 7.39% over previous close. The stock is down over 8% from its issue price of Rs 525. It has lost over Rs 1,25,000 crore in market cap from its high.

Seven out of ten real estate stocks are trading below issue price, which includes Brigade Enterprises, Puravankara, Omaxe, Kolte-Patil etc.

Mr Suman Memami, Research Analyst at Religare Securities said, "The realty market is expected to face further pressure in the short term on account of slackening demand in both the residential and commercial segments, downward trend in realisations across markets, deepening discounts offered by builders despite which builder rates are at a significant premium to investor flat rates.

She also mentioned some other factors, which affect real estate market like liquidity crunch which is causing builder to postpone new launches, the cost of under-construction property is rising as commodity prices head north, pile-up of inventory with builders or developers, EMIs are getting dearer as interest rates move up, banks are offering home loans for 75-80% of the property value as compared to 85-90% previously, PE players are also in a wait & watch mode,  NAV of realty stocks will shrink because of the slowdown in execution, fall in realisations and rising costs etc.

"A move to 14,200 on the Sensex and 4,100 on the Nifty seems on the cards in the near future. We are underweight on interest rate sensitives like Automobiles, Real Estate and Banking. The only major risk to our view is a sharp reversal in oil prices in the near future, which appears unlikely", Amar Ambani, Vice President - Research, India Infoline said.

Date of listing	Equity	Issue Price	Current Price	%Gain / Loss
31st Dec 07	Brigade Enterp	390	175.2	-55.08
30th Aug 07	Puravankara Pro	400	210	-47.5
9th Aug 07	Omaxe	310	174.05	-43.85
30th Nov 06	Parsvnath	300	169.15	-43.62
13th Dec 07	Kolte-Patil	145	88.7	-38.83
20th Dec 06	Sobha Developer	640	409.85	-35.96
5th Jul 07	DLF	525	481.55	-8.28
24th Jul 07	HDIL	500	573.65	14.73
7th Feb 07	Akruti City	540	840.15	55.58
12th Apr 07	Orbit Corporati	110	408.05	270.95