Thursday, February 15, 2007

Realty scrips hit 3-mth low

Business Standard reportd
Realty and construction stocks fell to three-month lows on the BSE, with investors offloading the scrips in the last few trading days.

Public sector banks' proposed move to raise prime lending rates and the RBI's hike in cash reserve ratio (CRR) led to a steep fall in realty and construction shares, many of which fell over 30 per cent from their all-time highs.

The weak sentiment saw Sobha Developers (Rs 754), Akruti Nirman (Rs 415), Parsvnath Developers (Rs 276), Lok Housing (Rs 236.55), DS Kulkarni Developers (Rs 239), Ansal Buildwell (Rs 109.45), Unitech (Rs 373), HCC (Rs 110.15) and BL Kashyap (Rs 1,215.60) etc hit their three-month lows on the bourses today.

Rahul Rege of Brics Securities said it was a case of exuberance becoming rational now. Rise in share prices on the basis on land bank was justified only up to a point. If an investor had bought a realty stock influenced by the momentum, he was in trouble. But, if the decision was based on fundamentals, they could still stay investments, he added.

He said the squeeze in bank credit to realty sector might also have contributed to the sudden dip in valuations. "I think there was too much excitement over realty stocks based on their future earnings," he said.

Ansal Buildwell, Lok Housing, Tantia Constructions and Peninsula Land fell over 50 per cent each, while prices of PBA Infrastructure, DS Kulkarni, HCC, Patel Engineering, Ansal Infrastructure, Sobha Developers and Unitech fell in the range of 30 per cent to 50 per cent from their all-time highs.

The stocks of the newly listed realty and construction firms such as Parsvnath Developers, Akruti Nirman, Lanco Infrastructure and Unity Infraprojects fell below their offer price.

Akruti Nirman was trading at Rs 420.25, 22 per cent lower than its issue price of Rs 540 on the BSE. Unity Infraprojects traded at Rs 562.20, 17 per cent below its offer price of Rs 675, Lanco Infrastructure was down 16 per cent at Rs 202.05 against its issue price of Rs 240. Parsvnath was trading just above its issue price of Rs 300.

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