Angel Broking, stock trading broker, has come out with an IPO research report on DB Realty IPO.
The stock investment research team of Angel has recommended to avoid the issue. The issue of Mumbai-based DB Realty has opened for subscription. The company plans to raise around Rs 1,500 crore from the issue. The price band is at Rs 468-486 per share and the issue will close on February 2, 2010.
DB Realty (DBRL), a leading realty player in the Mumbai Metropolitan region, has firmed up development plans for 100mn sq ft with a total saleable area of 60.9 million sq ft (DBRL's share). Around, 65% (40 million sq ft) of its total saleable interest is concentrated in the outskirts of Mumbai (Dahisar, Mira Road, Mahul, Mankhurd, Pune), 6.6% in South Mumbai, 21% in Western Suburbs and rest in Central Mumbai.
We have assumed average realisation of Rs 6,000 per sq ft on DBRL's salable interest based on its geographical presence, which gives us a Fair NAV of Rs 412/share. Hence, we believe that the IPO is expensive and recommend an Avoid. However, investors could consider alternate, existing listed realty players like Anant Raj and HDIL.
