CRISIL has assigned IPO Grade 2/5 to the proposed initial public offer (IPO) of D B Realty (DBRL), in its report dated January 14, 2010. The company plans to raise Rs 1,500 crore via the IPO.
The report says, This grade indicates that the fundamentals of the IPO are below average relative to the other listed equity securities in India. However, this grade is not an opinion on whether the issue price is appropriate in relation to the issue fundamentals. The grade is not a recommendation to buy/sell or hold the graded instrument, or a comment on the graded instrument’s future market price or its suitability for a particular investor.
The report also says, The grading reflects DBRL’s lack of operating history in real estate development. However, the presence of its experienced promoters, Mr Vinod Goenka and Mr Shahid Balwa, in the real estate development business for more than a decade provides execution track record comfort. The promoters have jointly developed nearly 15.9 million sq ft of residential, commercial and retail real estate projects in and around Mumbai. The grading has considered the highly fragmented nature and severe competition in the real estate industry. However, DBRL’s concentration in and around Mumbai is a key positive. Mumbai real estate market is expected to recover faster compared to other markets.
More : moneycontrol.com
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