Share price of DLF, realty major, dipped on stock exchanges on Tuesday following a ban by the capital market regulator, the Securities and Exchange Board of India (SEBI) on DLF and its top executives from accessing the capital markets for three years.
“Sham transactions” The ban was for suppressing information in its initial public offering (IPO) prospectus and for “sham transactions.”
On the Bombay Stock Exchange (BSE), DLF tumbled by 28.46 per cent or 41.75 points to close at 104.95 compared to its previous day’s close of 146.70.
On Tuesday it touched an intra-day low of 102.70, which is also recorded as its 52-week low. The 52-week high, which was at 242.80, was recorded on June 9, this year. Today the scrip opened at 132.05.
The SEBI barred DLF and promoters, including K.P. Singh, Executive Chairman of DLF Ltd on Monday, from participating in the securities market for 3 years on the grounds that the company failed to reveal material information in its 2007 listing prospectus.
“While DLF can appeal this order, we believe this along with other recent adverse regulatory rulings and weak demand environment does not augur well for DLF. While valuations appear cheap, we maintain EW rating and reduce our price target to Rs.159 due to macro and regulatory headwinds,” said Saurabh Mishra, Analyst, Barclays India in a report. Meanwhile realty stocks lost its sheen on bourses as the sectoral index dipped by 9.24 per cent on BSE.
“DLF's inability to access capital markets could impact its fund-raising program, both at the listed company level and potential listing of its commercial assets such as Real Estate Investment Trusts (REITs),” said Macquarie Research, adding, “DLF, in this case, would have to resort to large asset sales to reduce debt in the future.”
