A Crumbling Edifice..!
The report titled, ‘A Crumbling Edifice’, referred to the claims made by DLF on its assets during its IPO process in 2007.
Earlier, Veritas Investment Research had come out with damaging reports on other Indian major companies, including RIL (Reliance Industries), R- Com ( Reliance Communications) & Kingfisher Airlines.
Veritas has said DLF’s stock is at best worth Rs. 100 only, and the firm may have to recast its loan.
DLF Ltd said “The company adhered to the highest standards of corporate governance and financial integrity. “We do not generally comment on individual research reports. However, this report in question is presumptive and mischievous as the analysts have never contacted the company to seek any information or clarification. The audited financials of the DLF are always in the public domain."
Organisation under duress..!
Analysts said, ''The report may be fundamentally correct but was exaggerated in terms of devaluing the stock to Rs. 100.
While talking of DLF’s stock price declining about 60% within 5 years of the IPO.It was a case of a “dream gone sour”.
In the same period, the BSE's Sensex Index gained about 28%.
“Management is scrambling to consummate assets sales, rationalise its land bank and divest non-core operations within 5 years of a much publicised IPO in May 2007 at a price of Rs. 525.
Veritas called DLF an “organisation under duress” and alleged its balance sheet was “stretched”.
The report has gone a little overboard in terms of pricing the stock. It should be somewhere about Rs. 170 to Rs.180
Mr. Sharan Lilaney, Analyst, Angel Broking, said,'' DLF's debt levels remain high and “for most real estate firms, the situation will remain weak for the next two quarters“.
MCA orders..!
The MCA (Ministry of Corporate Affairs) has ordered the inspection of the books of accounts of DLF in view of complaints received from investors regarding its accounts.
A senior official said, “We have ordered the Regional Director (North) to carry out an inspection under Section 209 of the Companies Act. There were several complaints from investors alleging anomalies in the company's books,” .
DLF reported a 45% drop in net profit and 7.6% decline in revenue in the quarter ended 31 December, 2011
Rs. 22,758 crore Debt..!
After the earnings announcement, DLF said it planned to sell assets that are “non-strategic“ to its main business of property development so it can reduce its debt of Rs. 22,758 crore at the end of December.
Src: PTI
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