Sunil Dahiya: I will share a very personal experience. There was an IRS officer who was monitoring these IPOs at some level and said to me ‘Sunil you watch these IPOs, these are going to be windfall IPOs and then you will see watershed.
Ravi Sinha: One issue which Sunil raised on funding mechanism that it was a strategic mistake by certain developers to raise money through IPOs. I would like to rake this issue again and seek the panel’s view.
As far as IPOs are concerned, out of the 132 IPOs lined up, the largest number -15 -are from the real estate sector.
Analysts are worried and do not see a rosy picture ahead in 2012. According to them real estate companies planning IPOs in 2012 may experience a lack of enthusiasm on the part of investors.
In 2011 six big ticket real estate IPOs was expected to raise over $2.9 billion or Rs.13,000 crore. Emaar MGF, which could not raise money in the capital market in consecutive attempts even when market conditions were conducive.
Once a happy hunting ground, real estate sector has suddenly woken up to the reality that raising money through Initial Public Offerings (IPOs) is getting harder with investors being lot more discerning today.
Fitch Ratings’ outlook for 2012 for the Indian real estate sector is negative due to weak overall demand and higher construction costs, which are likely to continue to squeeze margins.
DTZ Research estimates that US$316bn of capital will be available to invest in global real estate in 2012, a 4 per cent decrease on its previous estimate at the end of 2010.
While the real estate carries home the point that the very nature of business has gone for a change with second generation taking over the business, professionals driving the show and efforts for an overall image makeover.
The only constant is change. This has been an axiomatic truth for the Indian real estate market over the last 24 months, with volatility having become a byword to describe it.