Foreign investors seem to have ignored the warning signals on the real estate sector by placing bids for over Rs 10,000 crore for the mega initial public offer (IPO) by Delhi property developer DLF. This is more than the total size of the IPO itself at Rs 9,625 crore at the upper price band of Rs 550 per share.The IPO for 175 million shares, which was subscribed by 1.28 times at 5 pm today, with two more days to go for the issue close, reflected bullish sentiment of foreign institutional investors (FII) on Indian realty, said analysts.The retail portion, however, is yet to gather speed with only 0.101 times subscription by 5 pm today.Despite the recent steps to curb demand in real estate and housing sectors such as hike in interest rates and restriction on bank lending to builders, analysts said FII interest in the DLF IPO reflects their belief that the sector would witness fast growth due to rising disposable incomes and changing family structures in the country.According to the data available on the National Stock Exchange, FIIs have placed bids for 198.7 million, out of a total of 104.44 million shares reserved for the qualified institutional buyers (QIBs). At lower price band of Rs 500, FIIs bids are valued at Rs 9,935 crore."FIIs have been putting money into the country's realty sector. The valuation and risk associated with DLF will be more or less similar to that of the Sensex and the Nifty. From a foreign investor's view, there are few stocks which they relate with the future of their investments into a specific market. DLF is one such stock. That's one of the reasons it has attracted big foreign investment," Arun Kejriwal of Cris Research said.The QIB portion, which forms 60% of the IPO, was subscribed over two times. Market sources said that a few global investors have placed bids worth $1 billion. Most of the inflows have come in the form of participatory notes. However, this information could not be confirmed. The overseas funds investing in India have to also put a large number of bids for the issue."The realty sector is facing few issues. But, there is no reduction in the foreign interest in the sector. Real estate is a significant asset class. Foreign players want to broaden their exposure to this sector," Avinash Narvekar, partner, Ernst & Young said.The DLF is expected to join the futures and options (F&O) trading on its listing.Updated at 1620 hrs: New Delhi-based property developer DLF's public issue has received a mega response from institutional investors as the country's biggest public float was subscribed 1.17 times today.As per the data available on the National Stock Exchange website as at 4 pm, the issue had received 20.50 crore bids for its proposed sale of 17.50 crore equity shares. A total of 36,22,060 bids were received at the cut-off price. The price band of the issue is Rs 500 to Rs 550 per share. Around 20% bids were received below the upper limit.On Monday, the opening day of the issue, the qualified institutional buyers' (QIB) quota, was subscribed 1.28 times. The QIB portion forms nearly 60% of the Rs 9,625 crore issue. The issue closes on Thrusday 14 June.On the opening day of the issue, non institutional and retail investors had not given a warm response to the issue. However, industry sources say these quotas would be oversubscribed by the closing date, as most of the retail investors put their bids on the final day.Updated at 1215 hrs: The mega initial public offer of realty giant DLF, through which the developer is expecting to garner Rs 9,625 crore, today got fully subscribed.The IPO got subscribed 1.04 times on its second day of offer, receiving 18.27 crore bids for 17.5 crore equity shares on offer, according to the latest data available on the stock exchanges.The data shows that 23,13,020 bids were received at the cut-off price.The issue had received bids for 78% shares yesterday, when the IPO opened for subscription.The Qualified Institutional Buyers (QIB) portion constituting of Foreign Institutional Investors, domestic financial institutions and Mutual Funds was subscribed 1.28 times the shares reserved for them on the first day itself.Billionaire K P Singh-promoted DLF, which is offering 17.5 crore equity shares through 100% book-building process, has fixed the price band at Rs 500-550 per share. The mega-issue would make it among the 10 largest firms on the bourses with a value of Rs 93,700 crore on the upper band.The issue would close on June 14. It would constitute 10.27% of the fully diluted post-issue capital of the company.(PTI)
