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DLF has completed the 100% stake sale of its Pune IT SEZ project where it
holds 67% stake with the balance held by Hubtown (formerly Ackruti City)
to the Blackstone Group for ~INR 8.1 bn (DLF share at ~INR 5.4 bn). This is
in line with DLF’s guidance on asset monetization where it expected to
close Noida/Pune deals in Q3FY12. However, we believe that these asset
sales are factored in valuations and triggers for the stock remain closure
of Aman sale (~INR 20 bn) and pick‐up in new launches in H2FY12. We
currently have a ‘HOLD’ recommendation with target price of
INR240/share.
Event: Pune IT SEZ stake sale completed for ~INR 8.1 bn
DLF has informed in a filing to stock exchanges that entire 100% equity stake in DLF
Ackruti Info Parks (Pune) Ltd. (DAIPL) has been sold to the Blackstone Group for ~INR
8.1 bn. DAIPL, incorporated in October 2004 is a joint venture between Hubtown
Limited (formerly known as Ackruti City Ltd) and DLF Ltd which hold 33% and 67% of
the equity capital, respectively, in the company. DAIPL is developing an IT park in Pune,
with total leasable area of 4.15 msf. The project has two phases of which Phase I of
1.89 msf has already been completed and leased out to the extent of 75% by August
2011 while construction of Phase II has been currently put on hold. We believe that the
stake sale pertains to Phase I of the project whereas Phase II of the project would be
demerged to form a separate entity owned by DLF and Hubtown Limited and that the
stake sale proceeds would be used to repay existing debt in DIAPL of ~INR 3.3 bn.
Outlook and valuations: Stake sale factored in valuations
We believe that the stake sale of Noida IT Park and Pune SEZ are currently factored in
the valuations. Given the high net debt of INR225bn as of Q2FY12, value accretion from
the stake sales is directionally positive but not material enough to be a stock trigger.
We reiterate that key monitorables remain progress on Aman Resorts sale (~INR20bn)
and pick up in new launches in H2FY12. We currently have a ‘HOLD/Sector Performer’
recommendation with NAV of ~INR240/share.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
DLF has completed the 100% stake sale of its Pune IT SEZ project where it
holds 67% stake with the balance held by Hubtown (formerly Ackruti City)
to the Blackstone Group for ~INR 8.1 bn (DLF share at ~INR 5.4 bn). This is
in line with DLF’s guidance on asset monetization where it expected to
close Noida/Pune deals in Q3FY12. However, we believe that these asset
sales are factored in valuations and triggers for the stock remain closure
of Aman sale (~INR 20 bn) and pick‐up in new launches in H2FY12. We
currently have a ‘HOLD’ recommendation with target price of
INR240/share.
Event: Pune IT SEZ stake sale completed for ~INR 8.1 bn
DLF has informed in a filing to stock exchanges that entire 100% equity stake in DLF
Ackruti Info Parks (Pune) Ltd. (DAIPL) has been sold to the Blackstone Group for ~INR
8.1 bn. DAIPL, incorporated in October 2004 is a joint venture between Hubtown
Limited (formerly known as Ackruti City Ltd) and DLF Ltd which hold 33% and 67% of
the equity capital, respectively, in the company. DAIPL is developing an IT park in Pune,
with total leasable area of 4.15 msf. The project has two phases of which Phase I of
1.89 msf has already been completed and leased out to the extent of 75% by August
2011 while construction of Phase II has been currently put on hold. We believe that the
stake sale pertains to Phase I of the project whereas Phase II of the project would be
demerged to form a separate entity owned by DLF and Hubtown Limited and that the
stake sale proceeds would be used to repay existing debt in DIAPL of ~INR 3.3 bn.
Outlook and valuations: Stake sale factored in valuations
We believe that the stake sale of Noida IT Park and Pune SEZ are currently factored in
the valuations. Given the high net debt of INR225bn as of Q2FY12, value accretion from
the stake sales is directionally positive but not material enough to be a stock trigger.
We reiterate that key monitorables remain progress on Aman Resorts sale (~INR20bn)
and pick up in new launches in H2FY12. We currently have a ‘HOLD/Sector Performer’
recommendation with NAV of ~INR240/share.
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