Public RelationsSome of upcoming realty IPOs may falter: consultant
A couple of real estate initial public offers (IPOs) may falter from around 15 lined up over the next few months if the issues are not reasonably priced, a realty consultant said.
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"Around 15 real estate IPOs have been lined up. They plan to raise in excess of $6 billion. I don"t think that all of them are going to have a smooth journey. One or two may falter," Jones Lang LaSalle Meghraj Chairman Anuj Puri told PTI here.
Puri said unlike previously, when investors lapped up issues at any price, this time, investors would like to see the pricing, the credibility of the developers and their ability to execute the proposed projects, before subscribing.
"This time, the market will differentiate on three factors - what"s the price, credibility of the developer and the delivery capacity of the developer."
Investors would like to see how transparent is the developer, the level of corporate governance in the company, the brand, the pricing of the issues and how much is left for the investors to be benefited, Puri said.
"The capacity of the developers is going to be viewed under the microscope. If one says that he is going to develop 50 million square feet and has completed only 5 million, investors are not ready," Puri said.
He said the market also does not have the appetite for $6 billion real estate IPOs as the liquidity problem still persists with the real estate sector, which had been badly hit by the economic slowdown.
"There is no liquidity problem as such in the market. But, it is a problem for the real estate sector. The market does not have appetite for so much," he said.
Emmar MGF has also filed a draft red herring prospectus (DRHP) with the market regulator Sebi and plans to raise Rs 3,850 crore.