DB Realty IPO getting good response

The Initial Public Offer of DB Realty Limited has been subscribed nearly 2.5 times as per the latest information available on the stock exchanges at 1 PM today. The issue closes later today.

The issue has attracted reputed investors such as Janus a US based FII , Pru ICICI Life, Reliance Capital among others as anchor investors.

In the opinion of Investment advisor Mr. S P Tulsian, points that go strongly in the favor of the company is, the strong presence in Mumbai and near about debt free status of the company. According to him he does not think that any company in the past have executed the project of four million square feet that too at three locations in Mumbai.

"Even if you look at it now the projects that they have or the upcoming or forthcoming projects, if you add all this they've got a total of 25 projects which constitutes for about 6.1 crore or 61 million square feet. That gives an average area of 24 lakh square feet at each location and a strong presence," Mr Tulsian said.

Also Anagram Stock Broking has recommended DB Realty IPO at the upper band of Rs 486. It expects the issue to give good returns in 6-12 months time.

Anagram said: “DB Realty a Mumbai based real estate developer has around 61 million square feet saleable area is coming up with the IPO to raise around Rs 1500 crore. The strong point goes in favour of the promoters of the company are, its strong presence in Mumbai City, especially in Central Mumbai, where selling price rules between Rs. 18,000 to Rs. 25,000 per sq. feet, coupled with almost debt free status and strong execution capability.”

Thus, the company has an advantage and edge of probably the only and largest company, amongst the listed peers, to have such a strong presence in Mumbai. Also, due to saleable area of close to 61 million sq. feet, it should be able to have strong pipeline of projects for next 7-8 years, of which, one third are under development.

DB Realty had entered the capital markets with its IPO of equity shares of Rs 10 each at a price band of Rs 468-Rs 486. The IPO will close on February 02, 2010. Jointly promoted by Mr. Shahid Balwa and Mr. Vinod Goenka whose families have been in the real estate and related businesses for more than 95 years and 25 years respectively.

Enam Securities Private Limited and Kotak Mahindra Capital Company Private Limited are the book running lead managers to the issue.