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Emaar MGF slashes IPO price band (Live mint.com 1st Feb 2008)The offer opens on Friday and Emaar MGF has slashed the price band to Rs540-630 a share, an 11.4% decline from its earlier price of Rs610-690
Unnerved by a volatile equity market, Emaar MGF Land Ltd, which was planning India’s second largest real estate share offering, has lowered the price band of the shares a week after it said it was confident of keeping its price band when it kicked off a nationwide road show.
The offer opens on Friday and Emaar MGF has slashed the price band to Rs540-630 a share, an 11.4% decline from its earlier price of Rs610-690, at the lower end of the band. Emaar, which had planned to raise up to Rs7,080 crore from an initial public offering (IPO)—the second highest in the sector after the July effort of DLF Ltd, that raised more than Rs9,000 crore—will now rake in Rs6,457.5 crore at the top end of its new price range.
Some analysts are still not convinced Emaar MGF’s lower offer will fly. A leading domestic brokerage house, Asit C Mehta Investment Intermediates Ltd, has asked investors to “avoid” the issue.
“The company’s valuation is very high. And there is nothing to justify it,” Manoj Jain, construction analyst with Asit C Mehta, said. “Emaar MGF as a company has not completed a single project.”
Emaar’s price-earnings multiple, a measure of its future earnings potential, hovers at 256.44 times compared with 74.99 for larger rival DLF and 48.72 for Unitech Ltd, which is currently India’s second largest listed developer.
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