Realty to see value buying soon

DLF's market capitalization to NAV as per the closing price on January 15 was 1.7 times. On January 22, it fell to 1.2 times. Even with a slight bit of recovery, over the past couple of days, it still stands at about 1.3 times.

Unitech was about 2.1 times as per its closing price on January 15. That has gone to 1.4 times. Post the recovery of the last couple of days, it is just about 1.6 times. So, these stocks are significantly off their closing prices of January 15, forget their life-time highs.

Parsvnath was about 1.8 times on a market capitalization to NAV on January 15. That has fallen to 1 times and has come up to just about 1.2 times. In terms of price movement, DLF is still 22% away, Unitech about 31%, and Parsvnath 35% from their closing prices of January 15, forget their all-time highs. So, there has been absolute carnage across the board.

The IVR Prime stock has actually fallen 53% from January 15-22. Its market capitalization to NAV actually fell from 0.5 times to just about 0.1 times. It has bounced back a bit and is currently close to about 0.25 times, rounded off to about 0.3 times. The pain has continued across the board. Similarly, Puravankara from 0.8 times to 0.5 times. Right now, it is trading at just about 0.5 times and has not moved as much.

But one case in point is Peninsula Land . The stock had moved about 30% day after day. Even on the way down, it moved in 20-30% circles. Peninsula Land was trading at 0.8 times, it dropped all the way to 0.3 times. After retracing over the last couple of days, it has just come back to about 0.45 times, rounded off to 0.5 times. It is still about 34% from its January 15 closing.

So, one can see that with USD 31 billion of market capitalization eroded, a lot of these counters, both heavyweights as well as some of the momentum boys, are still away both in terms of market capitalization to NAV as well as on a price differential, when compared to the closing prices of January 15.

Akruti Nirman seems to be have bucked this trend, because its market capitalization to NAV has just about dropped from 1.3 times to about 1.2 times. Even today, it is trading at about 1.2-1.3 times. That is probably the only outlier in this entire scenario.

The entire real estate sector seems to have been pretty much pasted out of shape. So, one may see some value buying come into this sector over the next few days as we go along.