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COMPANY QUICK COMMENT
As per an article in the Economic Times (25 Sep 11), the Board of Approval for SEZs has allowed DLF to sell its stake in IT/ITeS SEZ project in Pune. Earlier, the Department of Revenue had opposed the proposal stating that the transaction would amount to the sale of land, which is not permitted under the SEZ Act and rules. After already selling a 28-acre plot in Gurgaon for INR 4.4bn, if the sale of IT / ITeS SEZ in Pune, IT Park in Noida and Aman resort come through, it would give DLF a cumulative cash inflow of c.INR 39bn that would help DLF reduce its debt by nearly 17-18%. Reiterate BUY
Third asset sale coming soon; time to believe; Maintain BUY
As per an article in the Economic Times dated 25 September 2011, the board of approval for SEZs has allowed DLF to sell its stake 70% stake in DLF Ackruti IT/ITeS SEZ project in Pune. Earlier, the Department of Revenue had opposed the proposal stating that the transaction would amount to sale of land, which is not permitted under the SEZ Act and rules. The IT SEZ in Pune is spread over an area of 5m sq. ft. with 1.8m sq. ft. currently operational with tenants like Cognizant, TCS, and Barclays among others. According to the article, private equity major Blackstone is likely buyer for DLF's 70% stake in DLF Ackruti IT/ITeS SEZ in Pune, which will provide DLF a cash inflow of INR 9.5 bn, on our estimates. The sale of this asset would demonstrate management's ability to achieve sales in a tough macro environment, especially in a market like Pune which is oversupplied with office space.
After selling the 28-acre plot in Gurgaon to M3M Developers for INR 4.4bn, if the sale of IT / ITeS SEZ in Pune, IT Park in Noida and Aman resort come through, it is likely to give DLF a cumulative cash inflow of c.INR 39bn that would help DLF reduce its debt by nearly 17-18%. We maintain our Buy rating on the stock with a target price of INR 270. It is trading at a 27% discount to our NAV, which we think is attractive.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
COMPANY QUICK COMMENT
As per an article in the Economic Times (25 Sep 11), the Board of Approval for SEZs has allowed DLF to sell its stake in IT/ITeS SEZ project in Pune. Earlier, the Department of Revenue had opposed the proposal stating that the transaction would amount to the sale of land, which is not permitted under the SEZ Act and rules. After already selling a 28-acre plot in Gurgaon for INR 4.4bn, if the sale of IT / ITeS SEZ in Pune, IT Park in Noida and Aman resort come through, it would give DLF a cumulative cash inflow of c.INR 39bn that would help DLF reduce its debt by nearly 17-18%. Reiterate BUY
Third asset sale coming soon; time to believe; Maintain BUY
As per an article in the Economic Times dated 25 September 2011, the board of approval for SEZs has allowed DLF to sell its stake 70% stake in DLF Ackruti IT/ITeS SEZ project in Pune. Earlier, the Department of Revenue had opposed the proposal stating that the transaction would amount to sale of land, which is not permitted under the SEZ Act and rules. The IT SEZ in Pune is spread over an area of 5m sq. ft. with 1.8m sq. ft. currently operational with tenants like Cognizant, TCS, and Barclays among others. According to the article, private equity major Blackstone is likely buyer for DLF's 70% stake in DLF Ackruti IT/ITeS SEZ in Pune, which will provide DLF a cash inflow of INR 9.5 bn, on our estimates. The sale of this asset would demonstrate management's ability to achieve sales in a tough macro environment, especially in a market like Pune which is oversupplied with office space.
After selling the 28-acre plot in Gurgaon to M3M Developers for INR 4.4bn, if the sale of IT / ITeS SEZ in Pune, IT Park in Noida and Aman resort come through, it is likely to give DLF a cumulative cash inflow of c.INR 39bn that would help DLF reduce its debt by nearly 17-18%. We maintain our Buy rating on the stock with a target price of INR 270. It is trading at a 27% discount to our NAV, which we think is attractive.
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