DLF Shares Hit The Lowest

India’s largest listed property developer, DLF, hits the lowest of its record ever, crashing by 30 per cent and wiping out Rs. 7,126 crore in market value after market regulator SEBI banned the company from tapping capital markets for three years in one of the watchdog’s toughest punishments to date.

The regulator said DLF had failed to provide key information on subsidiaries and pending legal cases at the time of its record-breaking 2007 initial public offering. In a 43-page order published on Monday, regulator SEBI said DLF, its billionaire founder and chairman KP Singh and five other company executives including daughter Pia Singh and son Rajiv Singh would be barred from “buying, selling or otherwise dealing in securities”. The ban is a blow to the heavily-indebted real estate firm because it will now not be able to raise money using equity or debt instruments regulated by SEBI. DLF will also be barred from raising money through listing of Real Estate Investment Trust (REIT), which is also regulated by SEBI. Listing of REITs would have allowed DLF to sell finished commercial buildings to investors and raise money. It’s debt, which swelled as the firm ramped up land acquisitions before the financial crisis, stood at $3.13 billion or Rs. 19,100 crore at the end of June.

DLF raised $2.3 billion or over Rs. 9,000 crore in 2007 at the height of the pre-financial crises euphoria, in what was then India’s biggest market debut. “DLF and its board wish to reassure its investors and all other stakeholders that it has not acted in contravention of law either during its initial public offer or otherwise,” said a statement, adding it would defend itself against the order passed by SEBI.
New Delhi-based DLF builds homes, offices and shopping centres and is currently developing a 1.9 million square-foot retail mall close to the capital, which is expected to be the biggest in the country when it is completed next year. DLF has already run into regulatory trouble this year. In August 2014, the Supreme Court upheld a Rs. 630-crore or $103.3 million fine against the company imposed by the antitrust watchdog Competition Commission of India.