India's biggest IPO is launched

SECOND ATTEMPT: DLF Ltd, the nation's largest real estate firm, first tried to go public last year, but scrapped the offer amid a stock market meltdown

AP , NEW DELHI

Tue, Jun 12, 2007 - Page 10

India's top real estate company, DLF Ltd, began taking orders from investors yesterday for its initial public offering (IPO) of shares in what will likely be India's biggest IPO ever.

DLF is offering 175 million new shares to the public in a price band of 500 rupees to 550 rupees. If all shares are subscribed, the company will raise between 87.5 billion rupees (US$2.1 billion) and 96.25 billion rupees depending on the cut off price.

A successful listing would boost the net worth of chairman K.P. Singh and immediate family members, who together own 97.4 percent of the company, to more than US$18 billion.

The sales end on Thursday, and the stock is expected to list on the Bombay Stock Exchange as well as the National Stock Exchange by the end of this month.

India's largest IPO until now was that of Britain's Cairn Energy, which listed its Indian subsidiary on the local stock exchanges last December.

India's booming economy, which is growing at close to 9 percent annually, has seen property prices soar in recent years, bringing windfall gains to companies like DLF that hold large land reserves on the outskirts of major Indian cities. Those were bought from farmers at rates much lower than the current market price.

The growth in the property market has slowed in recent months because of high prices and a series of interest rate hikes, but most analysts and research groups feel the lull is temporary.

DLF's IPO is expected to be subscribed at the higher end of the price band, making it a US$23 billion company in terms of market capitalization.

DLF, the country's largest real estate firm in terms of the area it has developed, first tried to make a public offer last year, but scrapped the plans amid a stock market meltdown and disputes with minority shareholders.