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Realty shares rally on rate cut hopes

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Capital Market
Last Updated : May 15 2013 | 4:00 PM IST

DLF (up 5.23%), Indiabulls Real Estate (up 5.29%), Unitech (up 5.65%), D B Realty (up 5.07%), HDIL (up 4.81%), Anant Raj Industries (up 7.68%), Parsvnath Developers (up 1.88%), Oberoi Realty (up 1.23%) and Godrej Properties (up 0.1%) edged higher.

Realty major DLF gained after the company received strong investor response for its institutional placement programme. Investors bid for a total quantity of 14.81 crore DLF shares under the institutional placement programme through the stock exchanges mechanism held during a single day on Tuesday, 14 May 2013. The company will issue up to 8.1 crore shares to eligible qualified institutional buyers. The floor price for the qualified institutional placement was set at Rs 222 per equity share, with price band of Rs 222 to Rs 233 per share.

The BSE Realty index was up 4.01% at 1,955.78. It outperformed the Sensex, which was up 2.34% at 20,184.62.

The BSE Realty index underperformed the market over the past one month till 14 May 2013, rising 4.38% compared with the Sensex's 8.11% gain. The index also underperformed the market in past one quarter, sliding 7.7% as against Sensex's 1.15% rise

Realty stocks rose as the latest data showing a sharp fall in wholesale price inflation in April 2013 raised hopes that the RBI may further cut policy rates to perk up economic growth. Lower interest rates may help revive demand for properties. Purchases of both residential and commercial property are largely driven by finance.

The annual rate of inflation, based on monthly wholesale price index (WPI), eased sharply to 4.89% in April 2013, from 5.96% in March 2013, data released by the government on Tuesday, 14 May 2013, showed. Core inflation or non-food manufacturing inflation declined further to 2.74% in April 2013 from 3.41% in March 2013.

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Meanwhile, the Reserve Bank of India Deputy Governor H.R. Khan on Tuesday, 14 May 2013 said that the RBI has allowed companies building low-cost housing projects to raise overseas loans.

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First Published: May 15 2013 | 2:27 PM IST

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