DB Realty Brokerage - Reviews + Ratings

[chetan]

DB Realty Ltd (DBRL) jointly promoted by Dynamix & Balwas group in 2007 is large Mumbai focused real estate
company with a collective experience of) developing ~ 15.9 mn sq. ft of realty projects. The group has diversified into Telecom - Etisalat DB.

As on Dec 31st 2009 the company plans to develop 61.03 mn sq ft of saleable area consisiting - 11 ongoing (19.51 mn sq ft), 8 forthcoming (19.28 mn sq ft) and 6 upcoming (22.24 mn sq) projects.

The residential and commercial projects are spread across Dahisar, Mira road, Kandivali, Malad, Goregaon, Andheri, BKC, Dadar, Byculla, Mumbai central, Mahalaxmi & Pune of which 2 mass housing projects are expected to generate TDR of 17.88 mn sq ft.

CRISIL rating is 2/5 - Below Average for DB Realty IPO [This only indicates WEAK Fundamentals of the company] Stay tuned for more reviews.

[sunil]

Angel Broking's Param Desai and Mihir Salot are of the following view on DB Realty IPO,

Expensively priced: At an average realisation of Rs6,000p sq ft on DBRL's saleable interest based on its geographical presence, which gives a Fair Value of Rs412/share. The IPO is expensive on all parameters, viz. P/BV, premium to NAV and EV/sq ft as compared to other listed players.

We have factored in a 5% price escalation from FY2011E onwards in the construction and capital value for all its Residential projects from current levels, and 5% correction in Rentals in FY2011E, but a 5% increase from FY2012E onwards for all its Commercial and Retail projects. Our fair NAV for DBRL (based on its existing land bank) works out to Rs412/share. We believe that the IPO is expensively priced and recommend an Avoid on the IPO.

[chetan]

Anand Rathi is NEUTRAL on DB Realty IPO and said,

Considering the sector outlook and financial performance of the company, it looks good only for long term investment [as its most of the upcoming projects will take 2-3 years to generate revenue for the company]. But for now, comparing it with peers like - Ackruti, DLF and Unitech etc. it looks expensive. So don't expect listing gains.

[chetan]

HDFC Securities in a Research Note said,

DBRL has extended unsecured interest-free loans to entities related to the promoters, with such advances having no written agreements to document the terms and conditions is an area of concern. Also, some of these loans are given to entities, which are either loss-making or have a negative net worth. Further although DBRL’s managerial team has adequate work experience, it needs to be strengthened further, considering its colossal development plans over the next few years.

The management indicated during analyst meet that 4 anchor investors have subscribed to QIP portion (total Rs.2.7bn) at a lower price band of Rs.468 per share.

The issue is at a significant premium in terms of P/BV and P/E compared to Ackruti and a larger peer Unitech. This would mean lower chances of an upside upon listing.