Oh! How the mighty have fallen. Realty major DLF's chairman Kushal Pal Singh probably wasn't expecting such a turbulent start in the lead up to Diwali. But Sebi had other ideas.
On Monday the markets regulator barred DLF, Singh and other top executives from accessing markets for three years for failing to provide key information on subsidiaries and pending legal cases at the time of its record-breaking 2007 initial public offering. DLF's IPO in 2007 had fetched Rs 9,187 crore -- the biggest IPO in the country at that time.
KP Singh's problems are multiple - plunging stock prices, massive withdrawal of investor wealth and a substantial debt xxx. But there's more.
An article inForbes saysthat in the aftermath of the Sebi order, Singh lost his spot as the richest real estate baron in the country. That honour now goes to Mumbai's Mangal Prabhat Lodha.
According to the article, DLF shares have plummeted 38 percent since January 2014, as opposed to the 25 percent rise of the stock market during the same period. "Singh, who owns 75% of DLF and was ranked at Number 22 with a fortune of $3.9 billion inForbes Asia's recently published list of India's 100 Richest, is now worth a mere $2.4 billion," wrote Naazneen Karmali.
Compared to that, Lodha's fortune comes in at $2.9 billion. The real estate magnate is best known for his political activities (he is contesting the current Maharashtra state elections) and his upcoming realty projects that will give Central Mumbai two signature projects: World One, a 117-story tower of luxury residences and a 75-story Trump Tower being built in collaboration with Donald Trump.
Yesterday, DLF stocks plunged 28 percent, wiping-out Rs 7,439 crore from its market valuation. On the volume front, 168.10 lakh shares of the company changed hands at the BSE, while over 8 crore shares were traded at the NSE during the day.
DLF had debt of more than Rs 19,000 crore as on June 30, 2014, while its already-proposed fund raising plans include nearly Rs 3,500 crore through issue of certain bonds to lower its debt burden.
A Firstbiz column explained the reason behind the stock crash - pegging it to investors adjusting to the new reality that DLF will continue to have a massive debt pile on its balance sheets.
With inputs from agencies.
Updated Date: Oct 15, 2014 10:02 AM