DLF issue subscribed 3.47 times

India's biggest ever initial share offer by Delhi-based property developer DLF Ltd received bids for more than thrice the 175 million shares worth Rs 9,625 crore on offer, according to exchange data late on Thursday evening.

At 9.15 pm, exchange data showed that the property developer received bids 3.47 times the offer, as institutional investors shrugged off fears of any asset bubble in the real estate sector.

The qualified institutional investor portion received bids 5.13 times the shares on offer. Shares reserved for retail investors were also fully subscribed. The employee quota of 1 million shares remained marginally undersubscribed. 
 

IPO TRACK RECORD (Subscription levels in major recent public offerings)
	Size  (Rs crore)	Offer Price (Rs)	Subscription (times)
			Total	Retail
DLF	9625	500-550	3.47	1.00
GMR Infra	801	210	6.68	0.51
Cairn India	5261	160	1.03	0.68
Lanco Infratech	1067	240	11.61	2.37
Idea Cellular	2125	75	49.56	3.8
Power Finance Corp	997	85	77.16	8.46
Parsvnath Developers	997	300	56.26	9.93
Reliance Petroleum	2700	60	51.22	14.9

The company was selling 175 million shares at a price band of Rs 500-550. Most of the bids came from institutional investors. Deutsche Asset Management and HSBC put in bids worth Rs 2,000 crore each.

Foreign institutions that applied for substantial shares included Blackstone (Rs 800 crore) and Nomura (Rs 400 crore). Among Indian institutions, LIC put in a bid worth Rs 200 crore.

"The institutional investors have invested with a long-term horizon," said Shailesh Kanani, a real estate analyst with Angel Broking.

Billionaire KP Singh-promoted DLF will be using one third of the issue proceeds (nearly Rs 3,500 crore) to buy land for its upcoming projects, while the balance money would be used in the development of these projects and paying off some of the debts.

The issue would constitute 10.27 per cent of the fully diluted post-issue capital of the company.

The Indian real estate market is estimated to grow to $70 billion by 2015. Residential space will account for about 71 per cent of DLF's 526-million-sq-ft development plan, according to share-sale documents.

Merrill Lynch and Kotak Mahindra Capital Co are managing the DLF sale. Citigroup Inc, ICICI Securities Ltd, Lehman Brothers Securities Ltd, UBS AG, Deutsche Equities India and SBI Capital Markets Ltd are also sale arrangers.