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Event: According to media reports, the Punjab and Haryana High Court, on February
03, 2011, has set aside the allotment of 30 acres of land in Silokhera, Gurgaon, by
the state of Haryana to East India Hotels (EIH) and subsequent transfers. As per
reports, EIH had sold off the land at Sector 30 of Gurgaon after receiving “no
objection” from the government, to DLF and Chandrajyoti Estate Developers (CEDPL,
a 100% subsidiary of DLF) for a consideration of ~INR 1.15 bn.
The high court has directed the land to be returned to the government in original,
including, if required, after demolishing structures that may have been constructed
on it. The court has held that the allotment, in favour of EIH and subsequent sale to
DLF and CEDPL for a commercial and business venture, is invalid in view of the fact
that the land was to be used for a public purpose of setting up a hospital.
In our view, DLF intended to construct an IT/ITES SEZ of ~4.9 msf on the said land.
Impact: We believe that DLF is likely to appeal against the order in a higher court.
We do not expect the development to have any impact on financials as the
management had earlier indicated there is no rent yielding structure on the land
parcel and that there are no immediate plans to develop the same.
We currently have a ‘BUY’ rating recommendation on the stock with SOTP NAV of
INR 326/share.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Event: According to media reports, the Punjab and Haryana High Court, on February
03, 2011, has set aside the allotment of 30 acres of land in Silokhera, Gurgaon, by
the state of Haryana to East India Hotels (EIH) and subsequent transfers. As per
reports, EIH had sold off the land at Sector 30 of Gurgaon after receiving “no
objection” from the government, to DLF and Chandrajyoti Estate Developers (CEDPL,
a 100% subsidiary of DLF) for a consideration of ~INR 1.15 bn.
The high court has directed the land to be returned to the government in original,
including, if required, after demolishing structures that may have been constructed
on it. The court has held that the allotment, in favour of EIH and subsequent sale to
DLF and CEDPL for a commercial and business venture, is invalid in view of the fact
that the land was to be used for a public purpose of setting up a hospital.
In our view, DLF intended to construct an IT/ITES SEZ of ~4.9 msf on the said land.
Impact: We believe that DLF is likely to appeal against the order in a higher court.
We do not expect the development to have any impact on financials as the
management had earlier indicated there is no rent yielding structure on the land
parcel and that there are no immediate plans to develop the same.
We currently have a ‘BUY’ rating recommendation on the stock with SOTP NAV of
INR 326/share.
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