The Hindu Business Line : Realty stocks take a battering

Mumbai, March 13 Realty stocks continued to dovetail the Sensex fall with Delhi-based real estate major DLF losing 14.87 per cent on Thursday to close at Rs 606.75.

The BSE realty index opened a 7,989.21, touched a high of 8,082.14 before losing ground to close at 7,362.42, shedding 11.59 per cent over previous close.

Mumbai-based Housing Development and Infrastructure Ltd stock was down 13 per cent at Rs 616.40, Unitech Ltd closed at Rs 265.95 minus 9.71 per cent from Wednesday’s close of Rs 294.55 and Omaxe Ltd was down 7.77 per cent at Rs 205.40.

Parsvnath Developers was 8.23 per cent in the negative at Rs 207.50. The pick among the losers was Bangalore-based Puravankara Projects Ltd, which was down 3.69 per cent at Rs 287.15, while Sobha Developers dipped 1.38 per cent and ended at Rs 673. 90.

Pull out

While many brokerage firms were near unanimous in pointing to the market slide, which had lost 770 points or 4.78 per cent on Thursday to close 15,357, some like Mr Sanjay Someshwar, sub-broker, Ventura Securities, said basically realty companies have high private equity and the decline is more as investors are pulling out.

“The market that is around 15,300 levels saw a lot of panic selling by investors. People are selling off those stocks, which have a high PE now,” Mr Someshwar added.

“The companies in the real estate space are high beta companies. Supply is not meeting the demand, which led to many of these companies facing liquidity problems,” said Mr Shailesh Kanani, real estate and infrastructure analyst, Angel Broking.

Mr Kaushal Shah, deputy head of research, LKP Securities Ltd, however, tended to strike to the valuations of these companies.

bear market

“IPO pricing in bull time of many of the real estate companies was at a premium valuation and in bear market the valuations seem very high and hence the battering. Importantly, there is no correction in the real estate prices though the number of deals have come down now,” he added.

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