Realty IPOs await a game changer move-III
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.
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.
Hindustan Construction Company Ltd plans to sell part of its real estate and infrastructure units, as well as aggressively chase outstanding payments with state-run companies to reduce its debt, a senior executive said.
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.
The Supreme Court on Friday, Jan 20, gave two Sahara group companies three weeks to choose between two courses to secure investments made by the public in their controversial Optionally Fully Convertible Debentures (OFCD) scheme.
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.
Shobhit Agarwal, Jt. Managing Director – Capital Markets, Jones Lang LaSalle India, believes market may be sluggish at the moment, but eventually India stands as a destination for investment.
Indian developers will borrow about $1 billion from private equity funds this fiscal year at rates higher than banks, which are cutting loans to builders, Knight Frank assessment suggests.
A recent industry report shows that FDI in 2010-11 was the lowest in the last four years. According to the FICCI-Ernst & Young real estate report, the FDI in the sector declined to 6 per cent of the total direct investment coming to India in 2010-11.
With the market set to bottom by out by the second quarter of 2012, we will see the beginning of a recovery in the city’s residential real estate fortunes by the second half of the year.