DLF IPO up 8%

123jump.com Staff
05 Jul, 2007
New York City

Sensex edged lower on firm trading in rupee, lower closing in Asian markets, and a decline in cement and software stocks. Property developer DLF Limited priced its $2.2 billion IPO, largest-ever IPO in India valued at 29 times earnings. strong economic growth and rising properties has propelled several realty stocks to a record high. Autos and banks gained for the second day in trading.

[R]6:30PM Mumbai, 8:00AM New York – DLF priced largest IPO in India and closed up 8.5% on its first day of trading.[/R]

The BSE 30-stock Sensex Index declined 18.35 or 0.1% to 14,861.69. The index had opened higher and quickly gained 70 points but faced selling in the afternoon trading in the face of 5.5% decline in Shanghai. Nifty index declined 5.35 to close 4,353.95. Of the 30 stocks in the Sensex 12 gained and 18 declined. Broader market declined with 1,656 stocks declining, 997 advancing, and 71 remaining unchanged.

DLF Ltd, IFCI, and Reliance Natural Resources topped the most active list.

IPO News

DLF Ltd priced 17.5 crore (175 million) share issue at Rs 525 per share. The issue was oversubscribed by 3.5 times and Kushal Pal Singh and his family will control 88.3% of the listed company. Institutions will hold 6% and the rest will be held by retail investors. The issue opened at Rs 582 and traded as high as 714 before settling at close to 570.05, up 8.6% from the listing price. The largest IPO offering raised $2.2 billion or Rs 9,200 crore valuing its current year earnings at 29 times, at high end of the range in the industry.

Other retail stocks fell as most investors adjusted their holding to make room for DLF, led by a decline of 5.2% in Unitech, 4.7% in Ansal Properties, 4.4% in Parsvnath, and 4.2% in Sobha Properties. Other smaller companies in the sector declined as well.

Gaines of the Day

Top gainer in the Sensex, ICICI Bank closed up 1.8% to Rs 1,003 on the news that the bank has received government approval to sell 24% stake in its financial services subsidiary. Other banks in the sector also participated in the rally. UTI Bank gained 2% to Rs 630, Union Bank edged up 0.4% to Rs 130, and Indian Bank surged 6.9% to Rs 140.

Britannia Industries surged 5% to Rs 1,703. Danone, The French partner of Wadia Group, agreed to sell its biscuit and cereal global business to Kraft Foods excluding its business in India and Latin America.

Larsen & Toubro rose 1.4% to Rs 2,325 after the company said that it plans to form five new companies in power projects, shipbuilding, boiler and boiler and turbines, and water purification.

BHEL gained for the second day in a row. The heavy engineering company has a order backlog of three years. The stock gained 1.3% to Rs 1,565.

Auto stocks rallied for the third day in a row. Tata Motors reported 2% decline in unit sales to 44,317 in June. The stocks increased 1.5% to Rs 708. Hero Honda edged up 0.4% to Rs688. TVS Motors jumped 3.4% to Rs 60 on June sales decline of 15% to 1,07,117.

Decliners of the Day

Among Sensex stocks Reliance Energy led the decliners with a loss of 3.25% to Rs 591. Ranbaxy lost 2.3% to Rs 359, HDFC Bank fell 2% to Rs 1,941, and Hindalco fell 1.3% to Rs 154. Reliance industries lost 0.3% to Rs 1,680.

Cement stocks fell after rallying for two days. UltraTech fell 5% to Rs 899, Ambuja Cements lost 1% to Rs 128, and ACC closed a fraction lower.

Arvind Mills fell 4.7% after National Stock Exchange banned additional derivative contract in the stock.

Firm but elevated trading in rupee against dollar left software exporters lower. Infosys, Tata Consultancy, Wipro and Satyam declined nearly 1%.