The Hindu Business Line : Realty, textile stocks spin into top gear

Shares of real estate and textile companies including Bombay Dyeing & Manufacturing, Century Textiles and Industries, Indiabulls Financial Services, Morarjee Realties, Dawn Mills, Ansal Properties, Mahindra Gesco, Ruby Mills and NRC Ltd rose on Tuesday following the Supreme Court order allowing National Textile Corporation to sell surplus land.

Dealers said investors rushed to buy shares of these companies, expecting real estate developers to make significant profits through construction and sale of residential and office properties. "Most of these companies, including Bombay Dyeing and Morarjee Realties, own substantial land banks in the heart of Mumbai city, which they are now free to develop and sell. The assets of these companies have gone up following the SC order," said Mr Nitin Bhasin, Research Analyst (Construction), Emkay Share & Stock Brokers.

Bombay Dyeing's share price hit the upper circuit limit (20 per cent) on Tuesday at Rs 472.90 with over 1.27 crore shares traded on the BSE. Century Textiles was up 7.98 per cent at Rs 421.65. Indiabulls Financial Services shot up 11.32 per cent to Rs 224.30.

Other stocks that attracted investors' attention on an otherwise flat trading day were NRC Ltd (up 4.93 to Rs 43.65), Morarjee Realties (up 15 per cent to Rs 499.95), Dawn Mills (upper circuit of 5 per cent at Rs 4,436.75), Mahindra Gesco Developers (up 3.4 per cent to Rs 400.45), Ansal Properties (up 3.44 per cent to Rs 666.80), Suryalakshmi Cotton Mills (up 2.11 per cent to Rs 208.50) and Nesco (up 5 per cent to Rs 1,593.95).

Dealers said the SC order would free up property in Mumbai's highly valued real estate market.

Mr Gagan Banga, Executive Director, Indiabulls Financial, said the company would now go ahead and execute projects through its real-estate arm Indiabulls Infrastructure Ltd. US-based Farlorn Capital Management owns 60 per cent in Indiabulls Infrastructure. "The asset value of Indiabulls has gone up after the court order," he told Business Line. Mr Banga said the construction projects would be executed in the next two years.

The Court order, which lifted a stay on the land sale imposed by the Bombay High Court in October 2005, will allow defunct textile mills to sell their land to developers. Dealers said share prices of the beneficiary companies, which were lying low after the Bombay High Court order, looked attractive now.