MAX. ISSUE SIZE (Rs): 1,500 Crores
PRICE BAND (Rs): 430 to Rs.500
ISSUE OPENS/CLOSES: 28th June/3rd July 2007
LISTING : NSE, BSE.
HDIL undertakes residential, commercial and retail projects, besides Slum Rehabilitation Schemes in the metro of Mumbai. The USP of this company, clearly, is its presence in the potent Mumbai Metropolitan Region (MMR) market.
Its IPO proceeds of Rs.1450 crore have been earmarked primarily for ongoing projects, with a small percentage set aside for further land and development rights.
In land bank terms, HDIL holds the equivalent of 112 million square feet of saleable area, of which40 per cent is under construction or development. Notably, 83 per cent thereof is in the lucrative MMR area where the demand-supply situation remains favourable.
On the flip side, a closer look at the RHP suggests that less than 50 per cent of what the company has done so far can be termed as core real-estate development.
Furthermore, while SRS projects boost margins, they are inherently beset with risk and uncertainty since it involves evacuation of slum-dwellers and providing them with alternative housing.
Another weak link is the high likelihood of lumpy revenues, which might impact cash flows and operating margins. This also explains the significantly better financials and quantum jump in its operating margins during FY07 .
With the scales equally tipped, it now boils down to pricing. While a P/E demand of around 20 on the diluted equity base is not over-attractive, punters might just play it for the listing pop. Long term investors though, might look elsewhere.
PRICE BAND (Rs): 430 to Rs.500
ISSUE OPENS/CLOSES: 28th June/3rd July 2007
LISTING : NSE, BSE.
HDIL undertakes residential, commercial and retail projects, besides Slum Rehabilitation Schemes in the metro of Mumbai. The USP of this company, clearly, is its presence in the potent Mumbai Metropolitan Region (MMR) market.
Its IPO proceeds of Rs.1450 crore have been earmarked primarily for ongoing projects, with a small percentage set aside for further land and development rights.
In land bank terms, HDIL holds the equivalent of 112 million square feet of saleable area, of which40 per cent is under construction or development. Notably, 83 per cent thereof is in the lucrative MMR area where the demand-supply situation remains favourable.
On the flip side, a closer look at the RHP suggests that less than 50 per cent of what the company has done so far can be termed as core real-estate development.
Furthermore, while SRS projects boost margins, they are inherently beset with risk and uncertainty since it involves evacuation of slum-dwellers and providing them with alternative housing.
Another weak link is the high likelihood of lumpy revenues, which might impact cash flows and operating margins. This also explains the significantly better financials and quantum jump in its operating margins during FY07 .
With the scales equally tipped, it now boils down to pricing. While a P/E demand of around 20 on the diluted equity base is not over-attractive, punters might just play it for the listing pop. Long term investors though, might look elsewhere.
