Real Estate Stocks Crash on Dalal Street

We have been telling that the Realty price have to correct and the correction is far more than we had expected. Analysts on Dalal Street have recommended an Aggressive SELL on the Indian Real Estate Sector. IPOs of day time looters such as Purvankara and IVR Urban Prime barely managed to subscribe and are quoting way below their issue prices.

The problem with these real estate companies is they behave like they are the King and land lords. That will not work in Free Markets. The street wants companies to generate cash. You cannot be an arrogant land lord, if so then just stay private. Look how Bangalore based Sobha Developers was hammered downwards after its QoQ growth fell - implies the company is not able to sell as many apartments as it used to. [Stock Down to Rs 730 from Rs 1,000]

Parsvnath Developers, Akruti and Omaxe - Delhi NCR Developers. Their stocks are also quoting below their IPO prices. Ansal Properties and Infrastructure has hit a new low. Unitech is down 30% to Rs 440 while DLF is managing just above its IPO price at Rs 539.

DLF also launched its first IT SEZ at Nagpur, Maharashtra on 140 acres of land. This SEZ project will involve an investment of about Rs 1000 crore. The IT Park is expected to be operational in a period of 3 years and being an IT SEZ, it would cater to all the international and national IT/ITES companies.

All this means, more and only more downside to the artificial Real Estate Saga in India. Commercial Real Estate will not correct as much as Residential due to Retailers demand.