Shares of real estate developers Unitech and DB Realty fell the most among realty stocks today, following reports that a CBI Special Court rejected the bail applications of key executives of both firms chargesheeted in connection with the 2G telecom scam.
The shares of Unitech, the country’s second-largest property developer, fell 5.13 per cent while those of DB Realty, the Mumbai-based developer, lost 4.22 per cent even as the BSE Realty Index, which tracks realty stocks, gained 0.91 per cent.
The court today denied the bail applications of Unitech Managing director Sanjay Chandra, DB Realty managing director Vinod Goenka and three executives of Reliance ADA group.
However, analysts tracking realty stocks say today's developments will have more impact on the sentiment than the stock prices. "The allegations are in connection with telecom forays. Long-term investors are not concerned much about these happenings as the developers are completing projects and generating cash flows. They may not take fresh positions but they are holding on to the stocks," said a senior analyst with a Mumbai-based brokerage, who did not want to be named.
Another analyst said: "I think the case will go on for some time. Till the issue is resolved, I think these stocks will become trading stocks and see daily ups and downs."
In a statement, DB Realty said all its projects would continue to be executed as per schedule and it was also in the process of inviting directors to strengthen the board.
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“It is unfortunate that the bail plea of Vinod Goenka has been rejected by the lower court, we have immense faith in our judicial system and are confident that justice will prevail," DB Realty said.
“In the meanwhile, we would like to state that these developments will not affect the operations of DB Realty Limited in any manner whatsoever. There is no direct or indirect shareholding of DB Realty Limited in the Telecom business and the company will continue its business in the normal course. The company has a very strong top management team with accomplished professionals working across all verticals like projects, construction, sales, marketing and finance,” it added.