The Securities & Exchange Board of India (Sebi) today tightened the norms for initial public offerings (IPOs) by real estate companies, while allowing short selling of equities by institutional investors, including FIIs.
It also made grading mandatory for all IPOs and waived the requirement of minimum public holding post-IPO for public sector companies and institutions.
The stock market regulator said real estate companies looking to tap the market must show the current value of their landholding, which should only include land actually owned by them.
A large number of real estate companies have lined up IPOs. Many have computed the value of their land on basis of what they expect the price to be when the projects are completed.
When approached for comments on Securities & Exchange Board of India’s directive, a senior executive with Delhi-based DLF said, “This will work to our advantage. The cost of land has been escalating and we will now be able to do the valuation at today’s prices.”
DLF has been awaiting Sebi’s permission to float an IPO that is estimated to garner Rs 13,600 crore, more than any issue so far.
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