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Tuesday, March 13, 2007

Realty firms' IPOs under Sebi scanner

Market regulator Sebi seems to be concerned about the spate of real-estate company IPOs on the market, reports CNBC-TV18.

Sebi seems to be worried about property public issues. Sources say it has stalled several IPOs from real estate firms apparently because it is concerned by the number of such companies floating issues. Sources say Sebi questioned many companies regarding the valuation of development rights and the their land banks. Sebi is also learned to be scrutinising their financials.

Some of the delayed issues are from companies such as DLF, HDIL, Orbit and IVR Prime, a subsidiary of IVRCL Infrastructure.

The Reserve Bank also attempted to cool the real-estate market by increasing the risk weightage for developer loans last year.To top it all, rising home loan rates have slowed disbursals in the past few months and property companies are feeling the pinch. Most real estate counters have been hit in the past few months and many new listings are trading below their issue prices.

That's probably why SEBI seems to be advocating caution and is in no hurry to clear dozens of IPO applications pending before it.


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