Equity Research Report (1) .

EQUITY RESEARCH
BY WAY OF FUNDAMENTAL ANALYSIS
2008
FACULTY GUIDE: COMPANY GUIDE: PURVA SOMANI

PROF. A. K. MITRA MR. S. P. TULSIAN
(07BS3100)
PROFESSOR CEO& EDITOR
IBS GURGAON
ICFAI BUSINESS SCHOOL PREMIUM INVESTMENTS
GURGAON MUMBAI
A REPORT
ON
“EQUITY RESEARCH”
BY WAY OF FUNDAMENTAL ANALYSIS
BY:
PURVA SOMANI
(07BS3100)
A report submitted in partial fulfillment of

the requirements of
MBA Program
Distribution list:
Prof. A. K. Mitra Mr. S. P. Tulsian
CEO& Editor
IBS Gurgaon Premium Investments
ACKNOWLEDGEMENT
Milestones achieved in the journey of life are never achieved alone,

and this is no exception. As I complete this enlightening journey, I
would like to acknowledge and thank my Guide and Companions, who
helped me, put my best foot forward and made this story a success.
I am very grateful to my Company Guide, Mr. S.P.Tulsian who

inspired me to work well on the topic and seeing to it that my
performance is up to the mark. He not only helped me on the topics
but also helped me to understand the nuances of Capital Market
I would also like to thank my Faculty Guide Prof. A.K.Mitra, for his
support and professional approach in guiding me through the careful
details of the project.
I am highly indebted to my Mother for her moral support and

encouragement. Also I thank my source of inspiration, my teachers
and professors.
I would also like to express my gratitude to my friends and colleagues

who have been support in my effort to explore this area of study.
All the above mentioned people have left a mark on this project and I
will always remain indebted to them.
i
TABLE OF CONTENTS
Particulars Page No.
Acknowledgement i
List of Illustrations iii
Abstract ix
I. Introduction
1.1. Objective 1
1.2. Methodology 3
1.3. Limitations 9
1.4. Company Profile 10
II. Union Budget Analysis 12
III. Company Analysis 16
3.1 Kernex Microsystems 17
3.2 Reliance Power IPO 40
3.3 India Glycols 61
IV. Industry Analysis 76
V. Appendices 170
VI. References 170
VII. Glossary 172
ii
LIST OF ILLUSTRATIONS
KERNEX MICROSYSTEMS
TABLES GRAPHS
Particulars Page No Particulars Page No
Management 20 Global Scenario 23

Team
Product & 21 Sales & Growth 24

Services
Operating Profit 26 Cost structure 25

Margin
Financial 27 Operating Profit 26

Performance Margin
Ratios 29 Financial 27
Performance
Shareholding 31
Pattern
Relative Market 32
Share
iii
RELIANCE POWER
TABLES GRAPHS
Issue Details 46 Gap between 44

energy
requirement and
supply in India
Objects of Issue 47 Energy 45

requirement in
India
Utilisation of 48 Electric peak 45

Issue Proceeds load
IPO Details 50 Bid details 51
Listing Details 52 Share price 53

(BSE, NSE) trends
Relative Index 54
iv
INDIA GLYCOLS
TABLES GRAPHS
Management 62 Sales & Growth 65

Team
Products & 63 Cost Structure 66

Services
Ratio 69 Operating Profit 67

Margin
Financial 68
Performance
Shareholding 70
Pattern
Relative Market 71
Share
v
REALTY INDUSTRY
TABLES GRAPHS
GDP 77
Commercial 86 Demand Drivers 81

Property Capital of Real Estate
Values
UNITECH
Performance
Shareholding 93
Pattern
HINDUSTAN CONSTRUCTION
Performance
Shareholding 99
Pattern
PARSHVANATH DEVELOPERS

Performance
Shareholding 106
Pattern
HDIL

Performance
Shareholding 115
Pattern
vi
DLF

Performance
Shareholding 122
Pattern
OMAXE

Performance
Shareholding 128
Pattern
BRIGADE ENTERPRISE
Ratios 130
KOLTE PATIL
Ratios 133 Shareholding 134

Pattern
AKRUTI CITY

Performance
Shareholding 140
Pattern
IVR PRIME

Performance
Shareholding 145
Pattern
ORBIT CORPORATION
vii
Performance
Shareholding 149
Pattern
INDIA BULLS REAL ESTATE

Performance
Shareholding 154
Pattern
COMPETITION
Herfindahl Index 158 Michael Porter 160
Michael Porter 161

Analysis
Peer Comparison 164
MARKET PERFORMANCE
IPO Rates 166 Relative Index 165
viii
ABSTRACT:
The project aims at tracking the stock market and finding the stocks
that would show good performance in the prevailing situations.
Premium Investment runs website www.premiuminvestment.in which

give recommendation to the paid users being a paid website. It bases
its research mainly on the fundamentals of the stock market.
During the tenure of my internship I have worked upon the Railway

Budget, Union Budget Analysis, Company Analysis & Industry
Analysis. The Companies covered were
Kernex Microsystems
Reliance Power
India Glycols
We have analysed the “Realty Industry” under which we have covered

12 major companies.
To name some DLF, Parsvnath Developers, Unitech, HCC, Akruti city

etc. were analysed.
ix
I. INTRODUCTION
1.1 OBJECTIVE
Our objective for the project has been to identify the right stock to invest for long term
wealth creation. The stocks have been identified on the basis of various situations
prevailing in the country keeping in mind the global scenario. So the following stocks
were selected because:-
KERNEX MICROSYSTEMS
We identified this stock as a good buy mainly based on the Railway Budget 2008-
09.These was one of biggest beneficiaries of the Railway Budget and suddenly, post
Budget, the prospects of the company changed from bright to excellent.
We thus decided to analyse this company as a good buy for the long term, keeping
in mind the various advantages it will now accrue due to its product profile and the
proposed expansion of the Indian Railway.
INDIA GLYCOLS
The rising crude oil price is a perennial source of worry for the entire world. And
just when all were grappling with it, we came across this company, India Glycols,
which uses ethanol as a substitute for crude oil. This was precisely the need of the
hour, a company not using crude oil and that thus made India Glycols an excellent
stock to buy and hold for the long term.
RELIANCE POWER IPO

Primary market is the source of the secondary market. And in that context, when we
talk of the recent IPO markets, the IPO of Reliance Power is a landmark and the
way in which it managed to shake up the entire stock markets made us want to look
into the nitty-gritties of the IPOs in the Indian stock markets.
The sheer size of the IPO, the response it evoked which hinged near mass hysteria
and the debacle it faced after having got listed below the offer price, made it a case
study in itself.
REALTY SECTOR
When the stock markets had touched the 20,000 levels in January 2008, it was the
realty sector, which led the rally and at that time, almost all the stocks, from all the
groups, went top gainers every day.
1
And then the markets fell and along with the index, the realty stocks fell like nine
pins. The same realty stocks, which led the index some time ago, were now amongst
the top losers.
This rise and fall of the realty stocks, along with the rise and fall of the index made
it very interesting. We wanted to learn why the realty stocks had so much hold over
the markets and thus decided to do an in-depth analysis of the entire Indian realty
sector and the frontline listed stocks.
2
1.2 METHODOLOGY
Equity Research refers to the study of the performance of the economy as a whole, the
industry and various companies and analyzing the same. It enables to predict the future
performance of a particular stock based on its past performance, the current status of
the internal as well as the external environment.
The internal environment includes:
The financial performance

The operational performance
The future deals with the clients
The share price trend
The management of the company, i.e. the Board of Directors etc.
The nature of the business
The external environment includes:
The Economy
The global scenario with respect to the business
General economic scenario
Political scenario
Performance of the stock market on the whole
Competitors
EQUITY RESEARCH can be done by two methods:
 Fundamental Analysis
Here we look at balance sheet, income statement etc. to determine a

company‘s value. In financial terms it is used to measure a company‘s
intrinsic value. It takes a long term approach to analyze the market as
compared to technical analysis. It often looks at data over a number of
years.
 Technical Analysis
Technical traders study the price movements of the particular company's

stock in the market. Technical analysts strongly believe that the price
movements follow a trend and by identifying the trend, one can
accurately predict the price that might occur in future. Technical analysts
use financial tools with software support. One can be overawed by the
terms and studies of a technical analyst when he/she explains the
rationale behind the prediction. Technical analysis is used for a time
frame of weeks, days or even minutes.
3
The various steps in fundamental analysis are listed below.
Fundamental Analysis is a conservative and non-speculative approach based on the

―Fundamentals‖.
 The Economy
 The Industry
 The Company
A brief glimpse of each of these factors is explained below:
 The Economy Analysis

In the table below are some economic indicators and their possible impact on the stock
market are given in a nutshell:-
Economic Factors Economic indicators Impact on the stock

market
GNP - Growth - Favorable
- Decline - Unfavorable
Price Conditions - Stable - Favorable
- Inflation - Unfavorable
Economy - Boom - Favorable
- Recession - Unfavorable
Employment - Increase - Favorable
- Decrease - Unfavorable
Personal Disposable Income- Increase - Favorable
Personal Savings - Increase - Favorable
Interest Rates - Low - Favorable
- High - Unfavorable
Balance of Trade - Positive - Favorable
- Negative - Unfavorable
Strength of Rupee in Forex- Strong - Favorable
Market - Weak - Unfavorable
Corporate Taxation (Direct & Indirect
Taxes) - Favorable
- Low - Unfavorable
- High
4
 The Industry Analysis
1. Overview- past and present scenario, market size, residential and commercial,
various themes
2. Government. policies
3. Status in tier I,II and III cities
4. Demand and Supply
5. Problems
6. Company Analysis
 About the Company
 Financial Performance
 Shareholding Pattern
 Projects Done
 Projects in Pipeline
7. Competition
 Herfindahl Index
 Michael Porter Analysis
8. Market Performance.
9. Synthesis.
 The Company Analysis

There may be situations where the industry is very attractive but a few
companies within it might not be doing all that well; similarly there may be one
or two companies which may be doing exceedingly well while the rest of the
companies in the industry might be in doldrums. You as an investor will have to
consider both the financial and non- financial aspects so as to form qualitative
impression about a company .Some of the factors are:-
1) About the Company
2) Management Team
3) Products / Services
4) Business model analysis
5) Industry Analysis
6) Operational Performance (June 07 to Dec07)
Sales & its Growth

Segment Wise Analysis
Operating Profit Margin
5
Cost Structure
7) Financial Performance
Profit/Loss & Balance Sheet (2years)

Ratios
The following ratios are usually calculated to assess a
company. But sometimes due to lack of certain data,
some ratios may not be calculated
Liquidity ratios:
Liquidity implies a firm‟s ability to pay its debts in the short run. If a firm has
sufficient net working capital, it is assumed to have enough liquidity. The current
ratio and the quick ratio are the two ratios, which directly measure liquidity.
Current Ratio:
As the CURRENT RATIO measures the ability of the enterprise to meet its current
obligations. It gives an idea about the short term liquidity position of the firm.
CURRENT RATIO = CURRENT ASSETS

CURRENT LIABILITIES
Quick Ratio:
In current ratio, the composition of current assets is not considered. A firm which has
large amount of cash and accounts receivable is more liquid than a firm with high
amount of inventories in its current asset. Thus we take quick ratio which shows the
firm‘s ability to pay its liabilities without relying on sale and recovery of its inventory.
QUICK RATIO = CURRENT ASSETS – INVENTORY – PREPAID EXPENSES

CURRENT LIABILITIES
PROFITABILITY RATIOS:
These ratios measure the efficiency of the firm‟s activities and ability to generate
profits.
Gross Profit Margin:
This ratio is used as an indicator of the efficiency of the production operation and the
relation between production costs and selling price.
6
GROSS PROFIT MARGIN= GROSS PROFIT
NET SALES
Net Profit Margin:
It measures the overall efficiency of production, administration, selling, financing,

pricing and tax management.
NET PROFIT MARGIN= NET PROFIT

NET SALES
Return on Equity (ROE):
It measures the corporation's profitability that reveals how much profit a company
generates with the money shareholders have invested.
Calculated as:
ROE = PROFIT AFTER TAX

SHAREHOLDER‘S EQUITY
The ROE is useful for comparing the profitability of a company to that of other firms in
the same industry.
Return on Capital employed (ROCE):
It measures the efficiency and profitability of a company's capital investments.
Calculated as:
ROCE = PBDIT
FA+CA-CL
ROCE should always be higher than the rate at which the company borrows, otherwise
any increase in borrowing will reduce shareholders' earnings.
Return on Investment (ROI):
It measures the efficiency of an investment or to compare the efficiency of a number of

different investments.
Calculated as:
ROI = PBDIT
NET ASSETS
7
TURNOVER RATIO:
It gives the speed of conversion of current assets (liquidity) into cash.
Asset Turnover:
It highlights the amount of assets that a firm uses to generate its total sales.
ASSET TURNOVER RATIO = SALES

AVERAGE ASSETS
LEVERAGE RATIO:
These are of two types:
1. Capital Structure Ratio- these are based on proportions of debt and equity
in the capital structure of the firm.
2. Coverage Ratio- these are derived from the relationships between debt
servicing commitments and sources of funds for meeting these obligation.
Capital Structure Ratio:
Debt Equity ratio:
It indicates the relative contributions of creditors and owners.
DEBT EQUITY RATIO= DEBT

EQUITY
Coverage Ratio:
Interest Coverage Ratio:
This ratio tells us how many times the firm can cover or meet the interest payments
associated with debt.
INTEREST COVERAGE RATIO= EBIT

INTEREST
EQUITY – RELATED RATIOS
It measures the shareholders return and value.
Earning Per Share:
It gives the performance of the firm.
8
EPS = NPAT
Number of Outstanding shares/Ordinary shares
Price Earnings Ratio:
It is the number of times the market price of a share is discounted vis-à-vis the EPS of
the firm. It is the most popular financial ratio in the stock market for secondary market
investors as it indicates whether the stock is undervalued or overvalued. This method is
useful as long as the firm is a viable business entity and its real value is reflected in its
profits.
P/E RATIO = MARKET PRICE OF SHARE

EARNING PRICE OF SHARE
8) Shareholding Pattern
9) Capital Market Performance
Company with Sensex

Company with Competitors
Company with Industry Sensex.
10) SWOT Analysis
11) Recent Strategy/Management Discussion
12) Synthesis
1.3 LIMITATIONS
The research that we are doing of the companies and IPOs help us to suggest as to buy,
hold or to sell the particular stock. But these suggestions are based on what we expect,
would happen in the environment, the working of the company, global economies, etc.
This means that whatever value we expect would change as the conditions that are
beyond our control, keep on changing.
9
1.4 COMPANY PROFILE
1991 – Premium Investments was started as a weekly English investment tabloid.

Building our reputation over a period of time with our succinct and up to-the-point
precise analysis, the paper went on to surpass the one lakh per week circulation figure.
We soon went on to publish Premium Investments in Hindi and Gujarati languages and
soon became a popular sight all over India.
Then came the advent of the electronic media which more or less razed down all the
weekly publications. News became real time and the entire dynamics of the industry
changed. The inevitable happened and we downed our shutters in May 2001.
2007 – Armed with knowledge of the new media and constant urging by our loyal past
subscribers, we have now decided to launch the internet version of Premium
Investments. The ethos and principles will remain the same. We will continue to
analyze corporate news and IPO's the way we have always been doing – with a razor
sharp edge. Even our editorial team remains the same. The only change is that instead
of being a weekly, Premium Investments will now be available online 24/7 and news
will be updated and analyzed as they evolve. .
2008- April the website became paid.
10
MANAGEMENT TEAM
S P Tulsian
CEO& Editor
Ruma Dubey Vinod Harlalka
Associate Editor Market Consultant
Lucas D‟Souza Peter Rodrigues
Senior Correspondent Technical Support
Murali A. Raghavan Nandan Maheshwari
Consultant Research Assistant
11
II. BUDGET „08 ANALYSIS
INDUSTRY BUDGET IMPACT ON COMPANIES
AUTOMOBILES – LCV/HCV
Excise Duty reduce Ashok Leyland, Tata Motors, Eicher & M&M
from 16% to 12% for
LCV and 24% to 14%
for HCV
Electric cars and
specified spare parts
of electric cars
exempted from excise
duty.
2/3 WHEELRS
Excise duty reduce from 16% Hero Honda, Bajaj Auto, TVS Motors & Kinetic Motor
to 12%
PSU BANKS
Government to waive off loans SBI, Dena, Bank, UCO Bank, Vijaya Bank, Andhra Bank, IDBI,
of 60,000 crore of farmers PNB, Bank of India & Canara Bank.
which will help banks to clean
up their balance sheets by
reducing the NPAs of public
sector banks.
CEMENT
Bulk Cement ACC, Ambuja, Ultra Tech, Grasim & India Cement
It will attract an excise duty of
Rs.400 pmt or 14% ad velorem
duty rate whichever is higher
Cement Clinker
Excise duty of Rs.450 per
metric tonne.
12
IT
Introduction of Smart Infosys, TCS, Wipro, Satyam, Tech Mahindra, HCL Tech &
Cards into Public Vakrangee
Distribution System
(PDS)
Allocation of Rs.100
crore to IT Ministry to
set up National
Knowledge Centre.
IT/ITES sector has
been allocated
Rs.1,680 crore in FY09
Excise duty on
packaged software
increased to
12 % from 8%.
PHARMA
Allocation of Rs.16,534 Cipla,Ranbaxy,Panacea Biotech,Dr.Reddys Lab & Nicholas
crore for Health care Piramal
sector
Increased allocation by
15% for FY09.
Allocation for
HIV/Polio.
Custom duty on Life
Saving Bulk Drugs
reduced from 10% to
5%
Reduction in Excise
duty from 16% to 8%
FMCG
Reduction in general HUL,ITC,Marico
CENVAT rate from 16%
to 14%.
CST reduced from 3%
to 2%.
Excise duty on
packaged materials
and breakfast cereals
reduced from 16% to
8%.
Excise duty of16% on
coffee and tea pre-
mixes removed.
13
INFRASTRUCTURE
Rs.31, 280 crore Lanco Infra, GVK Power, GMR Infra, IRB, Mundra Port, Marg
allocated to Bharat Construction, Gammon India & IVRCL Infra.
Nirman.
Corpus of Rural
Infrastructure
Development fund to
be raised to Rs.14, 000
cr.
Rs.12,966 crore
National Highway Plan
HOSPITALS
5 year Tax Holiday to Apollo Hospitals & Fortis Health Care
set up hospitals in Tier
II & III cities.
Allocation of Rs.16,534
crore for Health care
sector
POWER
Urged bidding for 5 Tata Power, Power grid, NTPC, Neyvilli Lignite, Kalpataru
more UMPPS Powers & Jyoti Structures.
Allocation of Rs.800
crore proposed for
accelerated power
reform in FY09.
CAPITAL GOODS
Benefit from BHEL, L&T, Siemens, ABB, Thermax, Crompton Greaves,
Agricultural spending. Areva T&D
More funds allocated
to Defence by 10%
5 UMPP and Tilaiya
UMPP
OIL EXPLORATION
Foreign investments of $3.5 ONGC,Hind Oil Exploration, Videocon Industries, Assam Co,
billion to $8 billion expected Aban.Offshore, Great Offshore, Jindal Drilling & Shiv Vani.
for exploration and
development of new oil blocks
in NELP VII
TEXTILES
Textile Upgradation Arvind Mills,Century,S Kumars,Bombay Deying,Malwa
Fund raised from 911 Cotton &
cr to 1090 crore. Vardhman Textile.
Allocation towards the
Scheme for Integrated
Textile Parks
maintained at Rs.450
crore.
30 integrated textile
parks approved.
14
National Calamity
Contingent Duty of 1%
on polyester yarn
abolished.
EDUCATION
Increased allocation by 20% Everonn, NIIT, Educomp, Aptech,Todays Writing & Navneet
for FY09 Publication
PAPER & PAPER PRODUCTS

Reduction in excise West Cost Papers,Rama Newsprint,TN Newsprint, Ballarpur
duty on paper and Industries,
paper products from
12% to 8%
20% increase in Fund
Allocation for
education
TEA
Special purpose Tea Tata Tea, Jayshree Tea,Tata Coffee,Macleod Russel
fund to get Rs.40 & Harrisons Malyalam
crore.
Crop Insurance
Scheme for Tea.
FERTILISER
Subsidies to continue FACT, Nagarjuna Fertilisers, Tata Chemicals, SPIC, Zuari
shift to nutrient based Chemicals, Chambal Fertiliser, RCF & Deepak Fertilisers
subsidiary.
This negative will
remain till Regulator is
appointed.
AGRICULTURE
Increased allocation for Jain Irrigation, Finolex,United Phosphorus,KSB Pumps
irrigation
and farmer oriented policies
CIGARETTES
Excise duty on Filter & Non- ITC, Godfrey Phillips, GTC, VST Industries
Filter Cigarettes bought at par
RETAIL
Increase in Exemption Limit Pantaloon, Vishal Retail, Koutons, Shoppers Stop, Pyramid
will lead to a spurt in
Consumers purchasing power.
DEFENCE
Increase outlay for defence BEL,BEML,Ashok Leyland,M&M & Astra Microwaves

will increased the demand for
Defence related Equipments
15
III. COMPANY ANALYSIS
3.1 KERNEX MICROSYSTEMS (03.03.08 to 07.03.08)
3.2 RELIANCE POWER (10.03.08 to 14.03.08)
3.3 INDIA GLYCOLS (17.03.08 to 26.03.08)
16
3.1 KERNEX MICROSYSTEMS:
CONTENT
1) ABOUT THE COMPANY………………………………………….18
2) MANAGEMENT TEAM……………………………………………20
3) PRODUCTS/SERVICES…………………………………………….21
4) BUSINESS MODEL …………………………………………………22
5) GLOBAL SCENARIO………………………………………………23
6) OPERATIONAL PERFORMANCE………………………………..24
7) FINANCIAL PERFORMANCE…………………………………….27
8) SHAREHOLDING PATTERN……………………………………….31
9) CAPITAL MARKET PERFORMANCE……………………………32
10) SWOT ANALYSIS…………………………………………………….34
11) RECENT STRATEGY………………………………………………..36
12) SYNTHESIS…………………………………………………………….37
17
1. ABOUT THE COMPANY
The company was incorporated on September 16, 1991 as a private limited

company with the object of designing, developing, installing and maintaining
software packages for domestic and international markets. The company is
registered as 100% Export Oriented Unit (EOU) with Software Technology
Parks of India, Department of Electronics, Govt. of India, New Delhi.
Kernex has developed and exported software packages from 1993 to 2003
which is shown under Products and Services heading.
Its turnover increased from Rs. 4.5 Million to Rs. 78 Million during fiscal year
1993 to 2003. In the domestic market, the company also developed Intelligent
Data Acquisition System and installed on Konkan Railways in 53 stations from
1997 to 1999.
The Company has started developing Railway Safety systems from 1999 and
successfully developed and demonstrated a prototype of ACDs to Konkan
Railway Corporation Limited (KRCL) and Members of the Railway Safety
Board.
In March 2000 it entered into a Memorandum of Understanding with KRCL for

Technical Collaboration for developing full scale networked Anti-Collision
Devices (ACDs). The company, jointly with KRCL, took up an intensive
analysis of the major accidents that occurred in India, The functional
requirements of the clients and operational safety procedures have been fully
considered, for designing the logics of Anti Collision Systems. Based on the
concept and domain knowledge provided by Konkan Railway Corporation Ltd,
The Company has developed the networked Anti-Collision Devices, using
Global Positioning System, Radio Data Communication, Application Logics
and Inter facing these with an Auto Breaking System developed by KRCL.
The product has been successfully developed for deployment after initial and
extended field trials on the Amritsar- Jalandhar Section of Northern Railway
18
using 125 ACDs of different types during July 2002 to January 2003. The
product underwent improvements with series of successful trials over a period
of 3 years. Consequent to an agreement in the year 2003 with KRCL, the
company became the exclusive manufactures and suppliers of these systems to
KRCL including installation and maintenance. On January 20, 2004, the then
Honorable Railway Minister launched the project at Kishangunj, Bihar on a
1,730 KMs rail route on the Northeast Frontier Railway route.
The company has also developed Auto Driving Devices (ADDs) for Metro
Sky-Bus System during 2003 - 04 under technology partnership with KRCL.It
has also been carrying out research and development work on Advanced
Railway Signal Systems on cost sharing basis with KRCL.
Kernex Microsystem have come with an IPO in 2005 of Rs.1000 million which
has resulted in an increase in the equity capital of the company from Rs.74
million to Rs. 113 million.
The company‘s registered office is located in Hyderabad and also has wholly
owned subsidiary in U.S.A. i.e. ―Avant-Garde Info systems, Inc‖.
19
2.MANAGEMENT TEAM
1 Mr. B Murali Mohan Director
2 Mr. S V Subba Raju Chairman / Chair Person
3 Mr. R Sankaran Director
4 Dr. Jyoti Raju Director
5 Dr. M Anji Raju Director
6 Col. S S Rajan Director
7 Mr. S Nandakumar Director
8 Col. L V Raju Managing Director
Key Executives
1 Mr. I Srinivas Co. Secretary & Compl. Officer
2 Mr. V Badarinarayana Chief Financial Officer
About Managing Director
Col. L.V. Raju (Retd.) 61, holds a Post Graduate Diploma in Industrial Engineering &
Information Technologies from NITIE, Bombay, PG Diploma from College of Military
Engineering, Pune, PG Diploma in Military Science from Defense Service Staff
College, Ooty, Tamil Nadu and BE in Mechanical Engineering from Sri Venkateswara
University, Tirupati. He joined as Managing Director of Kernex on August 25, 1994.
During his tenure, the Company has diversified into Research & Development of new
technologies and products and was instrumental in company's development of anti-
collision devices for use in Railways. His main area of interest is railway safety and
signal systems.
20
3. PRODUCTS & SERVICES
PRODUCTS
SOFTWARE PACKAGES
(EXPORT)
NAME USES
Mimex GUI Application
LearnX Self Learning Tool
ELX
Flicker
MathX Interactive mathematical wizard
EzEc Builder Electronic Commerce Tool
Netcare
E-DOCS Document management
DOMESTIC MARKET
RAKSHA KAVACH/ACD It is an electronic control system
designed to minimize collisions.
Auto Control System (ACS) It monitors and control continuously
rail movements.
Satdham Safety System
Auto Tracking & Safety System
Accurex
Edocs
SERVICES
- Technical Feasibility - Pilot Project Execution
- Time and cost estimation - Configuration and
- Positional Survey Customization
- Inter ACD Radio - Warranty Maintenance
communication Survey - Post Warranty Annual
- Point Survey at Stations Maintenance
21
4. BUSINESS MODEL
This shows from where the business generates cash. In this case, it is through
sales in the foreign market and also services. But in the domestic market its
major source is through services provided. But after the RAILWAY BUDGET
was announced it is expected that its sales in the domestic market would also
increase.
CASH GENERATION
DOMESTIC OVERSEAS
SERVICES SERVICES SALES
22
5. GLOBAL SCENARIO
Above graph is about Railway network of all over the world.So we can say that
Germany has the largest railway network of 76,473 km,China has 74,200 km ,India
63,221km and Japan has 27,628 km.
So we can say that Kernex Microsystems has ample of oppturnity in countries like
Gremany,China and all .So the compnay should manufactures product to suit the global
market and this can be done by entering into partnership with overseas companies .
23
6. OPERATIONAL PERFORMANCE
SALES & ITS GROWTH
Analysis:-
The major portion of the company‘s income comes from the renewal of its maintenance
contracts. But from the last quarter we see a growth in the sales of its products like
ACDs etc. which can be seen from the above graph. This would mean that the
company‘s sales in the coming fiscal would see more growth, with the combined
strength of its maintenance service contracts and also the increased product sales.
We see a YoY growth increasing from -28% to 7%.
24
COST STRUCTURE
Analysis
From the above figure, we see that in the recent quarters, there has been a major shift in
the company‘s cost structure.
 There has been a major decline in the cost of sales. Due to unavailability of
data, we cannot specify the reasons of this decline. But we can conclude,
logically, that this may be due to improvement in the technical equipments or
decline in the cost of raw material or other costs.
 There has been an increase in staff costs.
 The other expenditures do not vary much.
 The research and development cost has emerged in Q3 FY 08. This shows that
there has been a major research program undertaken.
 Interest has emerged in the Q2 FY08 and has declined further in Q3. This shows
that the company is paying interest on the secured loan it has taken.
 The depreciation is almost same in all the quarters. This shows that they have
not incurred much on fixed assets.
 The tax has been almost the same in the three quarters as there is no major
change in the government policies regarding tax.
25
OPERATING PROFIT MARGIN
OPERATING PROFIT MARGIN

ITEMS Sep.06 Dec.06 March.07 June.07 Sep.07 Dec.07
NET SALES (Rs. Mn) 55.17 55.63 54.18 46.69 50.19 58.90
OPERATING
PROFIT (Rs. Mn) 28.40 33.20 39.86 29.06 26.84 27.76
OP MARGIN (%) 51.48 59.68 73.57 62.24 53.48 47.13
Analysis:-
From the above we can say that OPM was on its peak in March, 07 quarter which
started declining, but we may see a rise in its profit margin after its work starts on the
Indian Railway Project.
26
7. FINANCIAL PERFORMANCE
ITEMS Sep.06 Dec.06 March.07 June.07 Sep.07 Dec.07

PAT 14.07 12.04 8.74 14.56 13.15 14.02
NET
PROFIT 14.07 12.04 8.74 14.56 13.15 14.02
NET
SALES 55.17 55.63 54.18 46.69 50.19 58.90
NET
PROFIT
MARGIN 25.50 21.64 16.13 31.18 26.20 23.80
27
Analysis:-
 We see that the NET PROFIT MARGIN is declining in March 07 quarter while
there was an increase in the operating profit margin. This shows that there has
been an increase in the expenses like depreciation, tax etc. Thus, this gives the
reason pertaining to the decrease in the net profit margin.
 In the next quarter, they have managed to bring their profits to the level where
they can easily meet the other expenses to maintain their level of PAT and they
have continued to maintain the same in the successive quarters with very minor
ups and downs.
 But in coming quarters, there will be a change as they will be getting orders
from Indian Railways.
28
RATIOS
 RETURN ON CAPITAL EMPLOYED (ROCE)
CAPITAL
PBDI EMPLOY ROC
YEAR T ED E
Year Ended
06-07 141.22 1371.00 10.30
Year Ended
05-06 147.76 1351.00 10.94
Year Ended
04-05 167.37 255.00 65.64
 RETURN ON EQUITY (ROE)
NET NET
YEAR PROFIT WORTH ROE
Year Ended 06-07 63.80 1260 5.06
Year Ended 05-06 85.80 1209 7.10
Year Ended 04-05 89.50 246 36.38
 DEBT EQUITY
DEBT
TOTAL EQITY
YEAR DEBT EQUITY RATIO
Year Ended 06-07 0.00 113.00 0.00
Year Ended 05-06 0.00 113.00 0.00
Year Ended 04-05 0.00 74.00 0.00
29
 EARNING PER SHARE (EPS)
YEAR EPS
BASIC DILUTED
Year Ended 06-07 5.61 NIL
Year Ended 05-06 7.55 9.93
 P/E RATIO
YEAR C .M. P* EPS P/ E

FY 07 126 5.61 22.46
FY 06 271 7.55 35.89
* - C.M.P is taken as on 31.03.07 and 31.03.06 respectively.
30
8. SHAREHOLDING PATTERN
Analysis:-
 In the above pie-chart we see that the major chunk of the shares is owned by the
promoters, which speaks highly of the management.
 This shows that the promoters have faith in their company.
 From the above we can say that there can be an increase in the share of FIIs,
NRIs & MF as company starts its project in Indian Railways which can lead to
increase in share price.
31
9. CAPITAL PERFORMANCE
Analysis:-
 In relative market index, we have compared company‘s share price with Sensex
for the period January 2007 to February 2008.
 We see that initially, the prices were same as per the market but then it went
down. In June 07 it rose above the Sensex and maintained itself there for around
three months and then went up to a high of 180 while market was just at 140.
Then it came down to 140 where the market was, in October 07.
 When initially the market price of Kernex‘s share was down because public
might not have the knowledge about the company. But after some period of
time, people started taking interest in the company by knowing that this is the
only company that makes ACD‘s which will be soon implemented all over
India.
 This shows that, though the market was not good still the share prices were
going up. This may be because of
32
1. The unique nature of the company‘s working
2. Its good income volume
3. Its future growth prospects
4. The present status of its working in the North Frontier areas
5. Its expectation of flow of orders from Indian Railways.
6. The fancy of the market for the company.
33
10. SWOT ANALYSIS:
STRENGTHS:
 Unique Player
 Excellent R&D Base
 High EPS because least interest and depreciation burden.
 Debt free company. So higher EPS because it has a low burden
of interest and also of repayment.
 Exclusive International marketing rights
The company has an exclusive international marketing right for
ACDs, suitable and cost effective on medium to low density routes
both for passenger and freight trains, in the developing countries
with a royalty payment to KRCL to be mutually agreed upon. The
company is planning to enter international markets by establishing
marketing offices at New Mexico for USA, Mauritius for Africa,
Italy for Europe and Bangkok for South East Asia, with the base
established at Hyderabad.
 Exclusive Manufacturer of ADDs for Metro Sky Bus
Kernex is entitled to hold intellectual property rights for the Auto
Driving Devices for Metro Sky Bus Urban Transport System and the
sole supplier of the ADDs to KRCL. It is also the partner to sky bus
which is economical and space saving in comparison to metro rail.
OPPORTUNITIES:
 Order from Indian railways for 62,500 km. in next 7 years.
 Well positioned to take on opportunities in other countries like
Egypt, S. Africa, Brazil, Argentina, Venezuela, Indonesia,
Cambodia and Vietnam.
 The Company also makes auto driving devices for metro
railways, which would be developed once the Indian market for
the same is developed.
 Entry Barrier for New Players
Kernex Microsystems is the only manufacturer of ACDs in India
and also holds the exclusive manufacturing and international
34
marketing rights. This was in collaboration with KRCL which
supplies to Indian railways. Hence there could be stiff resistance
for new players to enter the market.
THREATS:
 As it has a huge dependence on Indian Railways for sales in
Domestic Market. Thus, if any changes made in the orders, it
may hit the company very bad.
 Dependence on KRCL
Kernex solely manufactures ACDs but the Intellectual Property
Rights vests with KRCL. Kernex is totally dependent on KRCL
for marketing ACDs in India. If KRCL is not able to sell ACDs
in India, company‘s revenue s from ACDs would be affected as
railways are free to adopt any system and 90 percent of
company‘s revenues are from ACDs
35
11. RECENT STRATEGIES
Kernex Microsystems (India) Limited has recently issued Bonus shares in the
ratio of one new share (Bonus share) for every ten shares held by the
shareholders, with the record date for the Bonus entitlement having fixed at
October 17, 2007.
According to Railway Corporate Safety Plan, the ACD system will be deployed
in the entire Indian Railway Network by 2013 that is in the next 6 years. As
part of above, survey work over 10,000 KMS is in progress.
The estimated amount of contract for Operation and Maintenance of ACD
systems will be about Rs.28.50 Crores for the period from September, 2005 to
March, 2008 and the value of such Contracts will be about Rs.15.00 Crores for
the financial year 2007-08.
36
12. SYNTHESIS
 Kernex Microsystems is engaged into manufacturing of Networked Anti-

Collision Devices (ACD) for Indian Railways and had installed over 2,500 kms.
In Indian Railways since 04 – 05.
 These ACDs are supplied by the company to Railways, through Konkan

Railways, under its exclusive Technology and Production Tie-up.
 Railways Board, after review of ACD Pilot Project in North Frontier Railways,
set by the company, declared it to be completed, commissioned and proved to
be successful. According to Railway Safety Plan, ACD Systems will be
deployed in the entire Indian Railway Network by 2013 and survey over 10,000
kms is in progress.
 Railway Minister Lalu Prasad Yadav has cleared deploying thee ACDs under
Railway Safety Plan, in its 08 – 09 budget. This was pending for quite a long
time, which finally saw light of the day.
 The total outlay by Railways on these ACDs, till 2013 – 14 is estimated to be

about Rs.3,500 crores, taking cost escalation and design changes into
consideration and for about 56,000 kms., covering all routes of Indian Railways.
So, annual flow of orders to the company could be about Rs.400 crores.
 For FY 07, total income of the company was at Rs.29.68 crores, of which
Rs.6.90 crores came via bank interest and provisions written back. Due to this,
EPS for the year was at Rs.5.61. The income of Rs.21.80 crores from its core
business is purely of maintenance of ACDs supplied earlier by the company,
which is about 15% annually, of cost of equipment.
 Even in first nine months of FY 08, total operational income of about Rs.15
crores is purely from AMC of ACDs supplied by the company to Railways,
earlier. Even this activity would give an EPS of about Rs.5 to the company.
37
 The present paid-up equity of the company is at Rs.12.50 crores, which got
raised due to 1 bonus share, issued on every 10 shares held, by the company. Of
this, promoters holding are 58% while 42% is held by the public.
 The EBITDA margin of the company on these ACDs are over 40% and costs
about 35% to 40% against similar devices, if imported. Also, any supply of
ACDs gives an assured AMC of 15%, every year, to the company, on
equipments supplied. ACD supplied by the company in 05 – 06 is enabling the
company to earn AMC revenue of Rs.20 crores, annually, by which EPS of
about Rs.5 is being earned.
 Once this supply will start to Railways, the performance of the company, would
come in new orbit with EBITDA in excess of Rs.50 crores, depending upon the
quantum of order flow from Railways. Even bottomline could be close to Rs.25
crores, giving an EPS of Rs.20 as the company has least interest and
depreciation burden.
 The company is also aiming to capture the major segments of medium to light
density Rail routes in developing countries, as the ACD system is efficiently
suited and cost effective. The company is hopeful of securing ACD orders from
countries like Egypt, South Africa, Brazil, Argentina, Venezuela, Indonesia,
Cambodia and Vietnam.
 Even continuous upgradation keep happening in ACDs as R&D is the main

focus of the company. This would keep demand of improved version products
in place, which shall assure continuous and assured business to the company.
 The company also makes Advanced Railway Signal Systems, for which major
trust has been given by Railways in its recent budget. This could be another area
of growth for the company.
 The company is also developing ―Multi Section Digital Axle Counter‖ in

collaboration with Altpro, Zerob, Croatia and Indian Railways has requirement
of about Rs.600 crores, in the next five year for this product.
38
 The company also makes Auto Driving Devices for Metro Railway, which
would be developed once Indian Market for the same is developed.
 The company is a debt free company and Rs.99 crores, raised by the company
from IPO is still available with the company.
 With expectation of these Railway orders, working of the company would

improve sharply from FY 09. Since the sector enjoys a very high PE multiple,
share had potential to cross Rs.350 mark in the next 10 – 12 months. Long term
prospects are extremely bright.
 Share at Rs.170 is a safe bet which can give a return of 100% in the next 12
months and a consistent return of 40% to 50%, annualized, over the next 2 – 3
years.
References
 www.kernex.in
 www.bseindia.com
 www.sptulsian.com
 www.moneycontrol.com
39
3.2 RELIANCE POWER IPO
CONTENT
PRE - IPO
1. ABOUT THE COMPANY……………………………………………..41

2. HIGHLIGHTS………………………………………………………….42
3. KEY RISKS…………………………………………………………….43
4. INDUSTRY OVERVIEW……………………………………………..44
5. ISSUE DETAILS ………………………………………………………46
6. OBJECT OF THE ISSUE……………………………………………...47
7. UTILIZATION OF ISSUE PROCEEDS……………………………...48
8. IPO GRADING………………………………………………………….48
9. PAYMENT METHOD………………………………………………….49
POST - IPO
1. IPO DETAILS…………………………………………………………...50
2. DISCOVERY OF PRICES……………………………………………...51
3. LISTING………………………………………………………………….52
4. SHARE PRICE TRENDS ……………………………………………….53
5. ANALYSIS OF BONUS/IMPLICATIONS……………………………..55
6. WHY IPO DID NOT DO WELL?.............................................................57
7. PRESENT SCENARIO…………………………………………………..59
40
PRE – IPO

Reliance Power Limited is a part of the Reliance Anil Dhirubhai Ambani Group (R-
ADAG). It is engaged in the construction and development of gas based and coal based
thermal power projects and hydro electric power projects in various parts of the
country.
Reliance ADA group company, Reliance Energy Limited (REL) has a significant
experience in project execution. The Company expects to draw on the expertise of REL
in providing engineering, procurement and construction (EPC) services and to benefit
from the rights that Reliance Natural Resources Limited (RNRL) has to fuel reserves. It
has one of the Largest Portfolios of Power Generation Projects under development in
India. The company intends to develop 13 projects which have a combined planned
installed capacity of 28200 MW. It plans a diversified portfolio of power projects –
seven coal-fired projects (14620 MW) employing super-critical (13120 MW) and sub-
critical (1500 MW) pulverized coal combustion (PCC) technology, two gas-fired
projects (10280 MW) employing combined cycle gas turbine technology and four run
of the river hydroelectric projects (3300 MW).
Strategic location advantage will provide cost benefit. The proposed project sites are
located in western India (12220 MW), northern India (9080 MW), north eastern India
(2900 MW) and southern India (4000 MW). Reliance ADAG brand has historically
created shareholders‘ wealth. There has been a Growth of the Indian Power Generation
Sector. The Peak deficit in FY2007 was 13897 MW.
41
2. HIGHLIGHTS
 Developing 13 medium and large power projects.
 Planned installed capacity of 28200 MW, largest portfolio of power generation

assets in India.
 CRISIL has assigned a grade of 4/5 to the issue, indicating above average
fundamentals.
 First IPO of a Private Company in India to offer discount of Rs 20 (close to 5%

of issue price) to retail investors.
42
3. KEY RISKS
 The power sector is highly dependent on Government‘s rules and regulations.
 Securing uninterrupted fuel supplies is likely to be challenging
 The company has no power plants in operation. Executing big plans is not likely
to be easy.
 The company does not have significant operating history.
 Projects under development have long gestation period.
43
4. INDUSTRY OVERVIEW
The Government of India has identified the power sector as a key sector of focus to
promote sustained industrial growth. It has embarked on an aggressive mission –
―Power for All by 2012‖– and has undertaken multiple reforms to make the power
sector more attractive to private sector investment.
The power industry in India has historically been characterized by energy shortages
which have been increasing over the years.
The following graph represents the gap between requirement and supply of electricity
in India from FY2002 to FY2007:
GAP BETWEEN ENERGY REQUIREMENT AND SUPPLY IN INIDIA
MU – Million Units
Public entities such as the National Thermal Power Corporation (NTPC) and state
generation companies have been prominent players in capacity addition in the power
sector. The participation of private sector, however, has increased over time owing to
power sector reform.
According to Central Electric Authority (CEA), the total energy requirement in India
will increase to 968659 Gigawatt hours (GWh) by fiscal year 2012, 1392066 GWh by
fiscal year 2017 and to 1914508 GWh by fiscal year 2022. This would lead to an
annual Electric Peak load of 152746 MW in fiscal year 2012, 218209 MW in fiscal
year 2017 and 298253 MW in fiscal year 2022. The northern region is expected to
contribute 30.1% and the western region is expected to contribute 28.4% of the overall
44
annual Electric Peak load in fiscal year 2022. This is explained below with the help of a
Graph.
 The following graphs show Energy Requirement and the Peak Load in
India in coming years:
GWh – Giga Watt hours
MW – Mega Watts
45
5. ISSUE DETAILS
IIA
Industry Power – Generation
Issue opens 15th Jan, 2007
Issue closes 18th Jan, 2007
Price Band Rs. 405 – Rs. 450
Face value Rs. 10
Issue size (No. in Mn) 260
Promoters Contribution(No. in Mn) 32
Net Issue Size (No. in Mn) 228
Net Issue Size (Rs. in Mn) 92,340 - 1,02,600
Discount to Retail Investors Rs 20 (Fixed)
Issue type 100% Book Building
Market Lot (No. of shares) 15
Book Running Lead Managers (BRLM) Enam, JM Financial, Kotak Mahindra

Capital, UBS Securities, ICICI
Securities, JP Morgan, ABN Amro
Securities, Macquarie India, SBI
Capital Markets and Deutsche
Equities.
Registrar Karvy Computershare
Listing Exchange BSE, NSE
46
6. OBJECTS OF THE ISSUE
The Issue Proceeds are intended to be utilized, after deducting the underwriting and
issue management fees, selling commissions and other expenses associated with the
issue (the Net Proceeds) for the following objects:
1. From issue to part-finance of construction and development costs of certain

identified projects worth Rs. 86424.3 million.
(Rs. in millions)
PROJECTS LOCATIONS AMOUNT
600 MW Rosa Phase I Uttar Pradesh 3931.5
600 MW Rosa Phase II Uttar Pradesh 6149.5
300 MW Butibori Maharashtra 4114.2
3,960 MW Sasan Madhya Pradesh 54613.5
1,200 MW Shahapur Coal Maharashtra 11458.0
400 MW Urthing Sobla Uttarakhand 6157.6
TOTAL 86424.3
2. General corporate purposes.
3. Achieve benefits from listing of the equity shares.
47
7. UTILIZATION OF ISSUE PROCEEDS
(Rs. in millions)
Annual funding schedule
Estimated date
Identified Fiscal Fiscal Fiscal Fiscal Fiscal Generating of
Plant
Projects Subsidiaries 2008 2009 2010 2011 2012 Total (MW) commissioning
Rosa Unit 1 :
Phase I RPSCL 36.9 1,645.80 2,249 0 0 3,931.50 300*2 = 600 December 2009
Unit 2 : March
2010
Rosa Unit 1 : June
Phase II RPSCL 584.4 1,129.30 2,024.50 2,411.30 6,149.50 300*2 = 600 2010
Unit 2 :
September 2010
Unit 1 : March
Butibori VIPL 375.3 855 2,286 597.9 4,114.20 150*2=300 2010
Unit 2 : June
2010
Unit 1 : May
Sasan SPL 15,000 7,072.80 5,415 17,904 9,221.70 54,613.50 660*6=3960 2013
Others : April
2016
Shahapur Unit 1 :
Coal MEGL 4,375 480.8 742.5 2,492.50 3,367.30 11,458.10 600*2=1200 September 2011
Unit 2 :
December 2011
Urthing
Sobla USHPPL 75 225 426.6 1050 4,381 6,157.60 100*4=400 March 2014
8. IPO GRADING
The issue has been graded by CRISIL Limited as CRISIL IPO GRADE 4/5, indicating
that the fundamentals of the issue are above average.
48
9. PAYMENT METHOD
Reliance Power IPO has 2 Payment Methods
The Payment Methods available to investors to apply in this Net Issue are as follows:
1) Payment Method - 1
 Only Retail Individual Bidders and Non-Institutional Bidders are eligible for
this method QIBs cannot submit a Bid under this Payment Method.
 While bidding, the Bidder shall make a payment of Rs. 115 per Equity Share,
irrespective of the Bid Price. Investors should note that the total Bid Amount
will be used to determine whether a Bid is in the Retail Individual category,
Non-Institutional category or not, and not the amount payable on submission of
Bid-Cum-Application Form.
 At the time of allotment: 1. If the amount paid by the Bidder is equal to or
higher than the total amount payable (being the Issue Price multiplied by the
number of shares allotted) by the Bidder on the Equity Shares allotted to the
Bidder, we reserve the right to adjust the excess amount towards the Balance
Amount Payable and issue fully paid Equity Shares only. The excess amount, if
any, after adjusting the Balance Amount Payable shall be refunded to the
Bidder (i.e., Refund = Total amount paid on bidding minus the total amount
payable on the shares allotted). 2. If the amount paid by the Bidder is less than
the total amount payable by the Bidder (being the Issue Price multiplied by the
number of shares allotted) on the Equity Shares allotted to the Bidder, we
reserve the right to adjust the excess of the amount received from the Bidder
over the Amount Payable on Submission of Bid-cum-Application Form
towards the Balance Amount Payable and issue a Call Notice for the balance.
2) Payment Method - 2
 Bidders under any category can choose this method.

 While bidding, the Bidder shall have to make the full payment (Bid Amount
multiplied by number of Equity Shares bid) for the equity shares bid. Bidders in
QIB category will be required to make payment of 10% of the Bid Amount
multiplied by the number of Equity Shares bid, with the balance being payable
on allocation but before allotment.
49
POST – IPO
1. IPO DETAILS.
SUBSCRIPTION DETAILS AS ON THE CLOSURE OF THE ISSUE (18 TH JANUARY
2008)
No. of times of total

No. of shares meant for the
Sr.No. Category offered/reserved No. of shares bid for category
Qualified Institutional
1 Buyers (QIBs) 136800000 11302275660 82.619
Foreign Institutional
1(a) Investors (FIIs) 9071443275
Domestic Financial
Institutions(Banks/
Financial
Institutions(FIs)/
1(b) Insurance Companies) 2021003775
1(c) Mutual Funds 186855315
1(d) Others 22973295
Non Institutional
2 Investors 22800000 4332525630 190.0231
2(a) Corporate 1851688320
Individuals (Other than
2(b) RIIs) 2384642025
2(c) Others 96195285
Retail Individual
3 Investors (RIIs) 68400000 1017218385 14.8716
3(a) Cut Off 971736060
3(b) Price Bids 45482325
50
We see that the institutional buyers made more bids as compared to the non
institutional buyers. Here the RIIs made a meager amount of bids of just.
2. DISCOVERY OF PRICES
The company has decided to keep the price of Rs.450 for QIB‘s and Rs.430 for Retail
Investors.
51
3. LISTING DETAILS
The details pertaining to the listing of the IPO on the Stock Exchanges is as follows:
BSE DETAILS
Listed on 11/02/2008
Issue Price 450
Open 547.80
High 599.90
Low 355.05
Close 372.5
BSE Script Code 532939
BSE Symbol : RPOWER
NSE DETAILS
Listed on 11/02/2008
Issue Price 450
Open 530
High 530
Low 355.3
Close 372.3
NSE Script Code 201879
NSE Symbol : RPOWER
52
4. SHARE PRICE TRENDS
The following graph shows the trend in the share price of Reliance Power since its
listing from 11th February 2008 till date.
Analysis:-
Reliance Power was issued at Rs.450 .Despite great response to the mega IPO of
Reliance Power (RPower), shares of the company settled at a discount of 16.67% due
to prevailing adverse market sentiments, fuelled by renewed indications of a US
recession and global meltdown. Shares opened at a premium of Rs 80, or 17.78%, at Rs
530 as compared with the issue price of Rs 450 a share. It touched a high of Rs 530 and
a low of Rs 355.30. It finally closed with a discount of Rs 75, or 16.67%, at Rs 375. On
18th February the stock gain a momentum as there were news of Bonus and all. 25th
February Company decides to give bonus shares in ratio of 3 shares for every 5 shares
held to all shareholders excluding the promoter group. Even after that also share price
did not went up or remain constant. The share price start falling and it touch a level of
Rs.350 from Rs.450 level before bonus declaration. We can say that stock was
overvalued and the company was not having any ongoing projects just they were on
papers. This was main reason why the stock did not do well.
53
 Relative Share Index
In relative market index, we have compared company‘s share price with Sensex for the
period starting from 11th February, 2008 to 14 th March, 2008.The above graph clearly
shows how share price of Reliance Power is down as compare to Sensex .The main
reason was that the IPO was overvalued.
54
5. ANALYSIS /IMPLICATION OF BONUS
Reliance Power gave 3 bonus shares for every 5 shares held, which was 60% of the
shares held.
In fact, call it compensatory issue and not bonus issue, as issue has been made to bring
down the cost of investors, having acquired shares in IPO, in retail category, from
Rs.430 to Rs.269 per share and in non-retail category, from Rs.450 to Rs.281 per share.
The issue of free shares also establishes a fact that issue was overpriced by about 60%
and even this issue has failed to take its share price to cross Rs.450 mark.
The present equity of the company has risen from Rs.2260 crores to Rs.2396.80 crores.
In order to enable Reliance Energy Ltd (REL) to maintain its stake, in relative term,
post bonus, Anil Ambani would be offering about 6.14 crore shares from AAA Project
Venture P. Ltd. (100% owned by Anil Ambani) (AAA) to REL, free of cost. Due to
this, absolute holding of REL would rise from 101.60 crore share to 1 07.74 crore
shares, keeping its stake at 44.96%, pre-bonus and post-bonus. Conversely, holding of
AAA would fall from 44.96% (pre-bonus) to 39.83% (post-bonus).
IMPLICATIONS
This issue is made, mainly to avoid any foreseeable litigation by any shareholder of
REL for excluding REL from bonus eligibility, in spite of REL holding pari-passu
shares.
R Power in its statement issued to BSE, has stated that ―The reduction of Mr. Ambani‘s
shareholding in Reliance Power by 5% from 45% to 40% represents a contribution of
nearly Rs.5000 crore (US $ 1.2 billion) by him, in favor of nearly 6 million investors in
Reliance Energy and Reliance Power.‖ This statement is a wrong statement as value of
6.14 crore share of R. Power, to be given by AAA to REL shall be about Rs.1800
crores, calculated on ex-bonus basis.
The effective cost per share to both the promoters viz. REL and AAA is Rs.16.93 per
share. So on actual cost basis, it is about Rs.104 crores only.
In another statement, it was stated that R-Power market capitalization is over Rs.94000
crores, which is true based on closing price of 22-02-08. However, on ex-bonus basis, it
may be close to Rs.72000 crores, if calculated at Rs.300 per share, on ex-bonus basis.
Also, notice by REL to BSE states that R. Power is implementing power projects with
aggregate capacity of over 28000 MW. Of this, the company has only 6 power projects,
for 7060 MW, as ―Identified Projects‖ for which cost of project and means of Finance
has been worked out and these were intended to get financed from the IPO proceeds
55
while balance of Rs.22835 crores to be financed by debt, out of total project cost of
Rs.31789 crores.
Remaining 6 projects for 21140 MW were under development for which, not much
headway or progress has been made like feed stock tie-up, land procurement, financial
closure or order of equipments, plant and machinery etc. Obviously, financing of these
projects would dilute the equity of the company from Rs.2260 crores and will also raise
debt of the company beyond Rs.22835 crores.
The present bonus issue would materialize by 1 st week of April, considering about 24
days for postal ballot and 14 days for record date. After declaring of Bonus on 24 th
February, 2008 the share price was there at a level of Rs.450 but then it started falling
and now it‘s trading around Rs.350 and this shows that this was the gimmick and
nothing for the investors really.
Hereafter, the share of R Power would get valued purely on fundamentals, for which
NTPC, maybe, a right comparison. NTPC is presently valued at a PE multiple of 20
times, on historic earnings of FY 08 and at a price to book of 3 times. Since NTPC is
into existence for years, its book value is reflecting very low cost, for its power
generating capacity. The present market capitalization of NTPC is at Rs.165000 crores
while enterprise value is about Rs.180000 crores considering net debt of Rs.15000
crores. This gives a per MW valuation at Rs.6.50 crore as NTPC has a present
generating capacity of 28000 MW. The present cost of new power project is Rs.4.50
crore per MW for thermal while Rs.6.50 crore per MW for Hydro. So on breakup value
of assets method, share is valued at about 1.4 times.
Going by these parameters, even R-Power stock should get valued on the same basis, as
no premium for such long gestation period or to the group can be given. Identified
project of the company would go on stream, earliest on December 09 being 300 MW of
Rosa Phase I while 3960 MW Sasan project will start from May 2013, with its final
commencement from April 2106.
In these circumstances, the issue of bonus share should be viewed more as

compensatory issue to correct the higher price charged by R-Power.
56
6. WHY IPO DID NOT DO WELL?
Extremely poignant and poetic, with a tongue-in-cheek look at the current state of the
markets and the investors, this is indeed the bitter scenario today. The IPO of Reliance
Power is now considered a jinx for the markets. The primary markets and the secondary
markets in tow have been on the decline ever since the IPO closed. And on 11 th
Februray,2008 after its listing pounded badly on the BSE and NSE, it was quoted at
Rs.372, much below its IPO price of Rs.450 and even lower than the retail discounted
price of Rs.430 per share.
The biggest victim of this drubbing on the counters of Reliance Power has been the
brand equity of the entire group – the name tag of ―Reliance‖. Be it Mukesh or Anil
Ambani, the way people have been hurt, because of having invested in the IPO, mainly
on the basis of the name tag of ―Reliance‖ is something that they will not forget in a
hurry. This has happened for the first time in the history of Reliance that a Reliance
IPO, on the very first day of trading was ruling so much below the IPO price. The fact
that this happened, shook the entire confidence of the markets.
As on 11th February, 2008, all the Reliance stocks, of both the brothers were down in
the dumps. Reliance Industries was down at Rs.2275, RNRL at Rs.124, RPL at Rs.152,
Reliance Capital at Rs.1615, Reliance Communication at Rs.590, Reliance Energy at
Rs.1580 and RIIL at Rs.1632. The newly listed Reliance Power ended the day at
Rs.372, as against the IPO price of Rs.450.
Reliance Power, a few days ago boasted of having the largest number of shareholders,
as prior to its listing the count of total shareholders was 41.85 lakh shareholders, surely
that number would undergo a drastic change now. Going by the trend shown today, it
seems sure that by the end of this fiscal, till 31 st March 2007, the total number of
shareholders would be less than 30 lakh.
Reliance Power is a classic case of overpricing. There was a sense of madness when the
IPO opened for subscription and everyone, right from the dabbawallah to the
housewife in the far flung suburbs, all rushed in to invest. Kudos to the PR agency of
ADAG and surely, the ad agency of the IPO needs to be congratulated too, for having
done such a fantastic job of promoting Anil Ambani and the ―Reliance‖ tag! People
invested without even casting a glance at the fundamentals of the issue, pricing did not
matter at that time. There was so much hype that all felt they will make a bounty if they
invested. Now they know!
The retail investors got to know of this the hard way. The drubbing today has made
them realize that the market is always right and just a name or a person cannot get away
with anything. Unfortunately, they learnt this lesson by paying a price.
57
For the overpricing, the blame lies fair and square on the shoulders of the BRLMs to
the issue – Kotak Mahindra Capital, UBS Securities, ABN Amro, Deutsche Bank,
Enam Securities, ICICI Securities, JM Financial and JP Morgan. All such big names in
the financial sector of India, it is indeed sad that they altogether indulged in such
overpricing, at the cost of the investors. These are supposed to be the most learned
people when it comes to IPOs and for them to have not judged the markets and the
effect of their pricing on the markets is indeed deplorable. It makes make actually
wonder what exactly these BRLMs are up to.
The blame for this IPO also lies with the grey market to a very large extent. The way in
which the premiums were quoted on the grey market is what led people to think that
they will easily get an immediate return on their investment. Now they hopefully know
better!
There is news that it is the QIBs who are the maximum sellers on the Reliance Power
counter. How can they do that? These QIBs were the ones who rushed to get as many
shares as they could and that too at the maximum rate of Rs.450. So now that the tides
have turned and the secondary markets have also changed their direction, the QIBs are
getting out like rats from a sinking ship. Doesn‘t this now mean that, in the future, if
QIBs clammer to get shares in any particular IPO, it is best to then stay away as they
could be the reason for the stock crashing on listing? Infact on Dalal Street today, QIBs
has become a bad word!
This unexpected turn of Reliance Power now casts a shadow over the IPO of the
Reliance Infratel, for which Anil Ambani has already filed in the Draft red Herring
Prospectus with SEBI. He had probably hoped to cash in further on the brand equity. It
seems there were almost five to six more IPOs planned by both the brothers – Reliance
Fresh and Reliance Entertainment being in the forefront. After this, maybe the brothers
also need to get a reality check done on their expectations and public perception of their
brand equity.
58
7. PRESENT SCENARIO:
On February 11, 2008 equity shares of Reliance Power got listed. The shares opened at
Rs.547.8 which was at a premium of 27.39% against the issue price of Rs.430 to Retail
Investors and at 21.73% against the issue price of Rs.450 to Non-Retail Investors.
Despite great response to the mega IPO of Reliance Power (RPower), the share price
of the company closed at Rs.372.5 even though it touched the height of Rs.599.9 but it
could not sustain for a longer period at the apex .This fall was due to prevailing adverse
market sentiments, fuelled by renewed indications of a US recession and global
meltdown. Incessant selling on the counter right since it got listed was also stated to be
one of the biggest reasons. Even today it continues to be quoted at below the offer
price.
The share price remained between Rs.350 to Rs.380 till February 15, 2008 which was
very disappointing for the investors. In order to gain the confidence of the investors, the
Company‘s Board proposed to issue Bonus to all the shareholders except the Promoters
in a bid to compensate them for the loss they suffered. On the day of listing i.e. on
Sunday, February 17, 2008, in their AGM, the Anil Dhirubhai Ambani Group
(ADAG) alleged that corporate rivals were pulling down share prices of all its group
companies. The investors were eagerly waiting for the market to open on Monday at a
positive note. On February 18, 2008 the share price opened at Rs.418.65 which was
Rs.33.95 more compared to the previous close which was Rs.384.7.
Between February 18, 2008 and February 22, 2008 the share price traded at level of
Rs.410 to Rs.420.
When board declared the bonus issue of 3 shares for every 5 shares held, on February
24, 2008 the share price opens at Rs.425 and closed at Rs.450.40 compared to previous
day‘s close of Rs.416.85.
Anil D. Ambani, Chairman, Reliance ADA Group, simultaneously announced a

voluntary contribution of 2.6% of his shareholding in Reliance Power to Reliance
Energy, to protect the company from any dilution of its existing 45% stake in Reliance
Power, as a result of the bonus proposal. Accordingly, Reliance Energy`s stake in
Reliance Power will be maintained at the
Level of 45% and the revised shareholding pattern of Reliance Power will be as
Follows:
Pre – Bonus Post – Bonus

Anil Ambani 45% 40%
Reliance Energy 45% 45%
Public Shareholders 10% 15%
The reduction of Anil Ambani‘s shareholding in Reliance Power by 5% from 45% to

40%, represents a contribution of nearly Rs. 50 billion (US$ 1.2 billion) by him, in
Favor of nearly 6 million investors in Reliance Energy and Reliance Power.
59
Based on the issue of bonus shares, the paid up share capital of the company will stand
increased to 2.397 billion equity shares of Rs. 10 each.
Anil Dhirubhai Ambani Group Chairman, Anil Ambani on Mar.4, 2008 said that the
work on the Reliance Power owned Rs 200 billion Ultra Mega Power Project at Sasan,
would begin in next 90 days and the plant will be fully operational in 50-60 months. He
added that power generation from Rosa power project in Uttar Pradesh would start
from 2009.
On the issue of gas-based Dadri project, he said that negotiations on supply of gas were
in process and would soon be finalized.
Now the share is currently trading at Rs.337.45 as on March 14, 2008.
Reliance Power has long gestation projects. And the share prices are not yielding the
requisite profits. Thus, it is better for the investors to get the bonus to decrease their
losses to some extent and then quit. Because the projects will take some time to
enhance the share value. In Market stocks like NTPC, Tata Power which is available at
much lower rate which can u good returns as compare to Reliance Power which is good
in long term.
References
 www.moneycontrol.com
 www.myiris.com
 Capital Market Magazine (Aug 27 – Sep 09,2007)
 Red Herring Prospectus
60
3.3 INDIA GLYCOLS
CONTENT
1) ABOUT THE COMPANY………………………………………………….62
2) MANAGEMENT TEAM…………………………………………………….62
3) PRODUCTS/SERVICES……………………………………………………63
4) BUSINESS MODEL ANALYSIS…………………………………………...64
5) OPERATIONAL PERFORMANCE………………………………………..65
6) FINANCIAL PERFORMANCE…………………………………………….68
7) SHAREHOLDING PATTERN……………………………………………...70
8) CAPITAL MARKET PERFORMANCE…………………………………...71
9) RECENT STRATEGY……………………………………………………….73
10) SYNTHESIS…………………………………………………………………..74
61
India Glycols is the First and only company in the world to produce Ethylene Oxide
(EO) / Mono Ethylene Glycol (MEG) from renewable agro route based on molasses,
since 1989. They are the Leading manufacturers of Glycols, Ethoxylates, Performance
Chemicals, Glycol Ethers & Acetates, Guar Gum and Potable Alcohol. Completely
integrated state - of - the - art manufacturing process with emphasis on superior quality
by deploying internationally proven technologies, innovative R&D and customized
approach.
Largest Ethoxylate, Glycol Ether producer and thus leader in Ethylene Oxide
Derivatives/Surfacetant business in India.
Global player meeting international specifications and norms, exporting to
South East Asia, Middle East, Europe, Australia and USA.
Catering to more than 1,000 customers in various end-use industries such as
Textile, Agrochemical, Oil & Gas, Personal Care, Pharmaceuticals, Brake
Fluids, Detergent, Emulsion Polymerisation & paints etc.
Offer customer specific products to meet their performance / technical
requirements.
Customer base includes large MNCs, Public Sector Undertakings and large as
well as medium & small Indian organizations.
2. MANGEMENT TEAM
NAME DESIGNATION
Late M.L.Bhartia Chairman & Managing Director
S.K.Sood President – Finance
Lalit Kumar Sharma Company Secretary
U S Bhartia Managing Director
62
3. PRODUCT & SERVICES
PRODUCT TECHNOLOGY/LICENSOR
Glycols Scientific Design Company Inc., USA

(leading Ethylene Oxide / Ethylene Glycol licensor
globally)
Ethoxylates & PEGS Press industria AG, Italy

(leading Ethoxylates technology licensor globally)
Performance Chemicals Sanyo Chemical Industries Ltd. Japan

Leader in speciality Surfactants in Japan
Glycol Ethers Sulzer Chemtech, Switzerland
Guar Gum
Extra Neutral Alcohol Alfa Laval, India,USA
63
4. BUSSINESS MODEL ANALYSIS
This shows where the business generates cash from. In this case, the Company is
getting money by selling their products to MNCs, Public Sector Undertakings and large
as well as medium & small Indian organizations and Exporting to South East Asia,
Middle East, Europe, Australia and USA.
CASH GENERATION
DOMESTIC OVERSEAS
MNCs PSUs SMEs

Large
&xcbcb
zSSSM
64
5. OPERATIONAL PERFORMANCE
 SALES & ITS GROWTH
Analysis:-
The net sales for the AMJ 07 quarter surged to 52.56% to Rs.3, 301.60 million.
Similarly, the net sales for JAS 07 surged to 58.07% to Rs.3, 558.90 million and for
OND 07 it surged to 93.32% to Rs.4, 499.80 a year ago when compared with the
corresponding quarter.
This shows how the company is performing well quarter on quarter and its performance
was outstanding in the last quarter. The sales include export sales also in all Quarters.
Export sales accounts to 14% in first two quarter and 10% in last quarter.
65
 COST STRUCTURE
Analysis:-
From the Cost structure we can say that there is not much change in quarters
which shows how the company is consistent regarding expenses.
66
 OPERATING PROFIT MARGIN
Analysis:-
Here OPM is declining for 3 Quarters and then start rising .The reason behind this fall
in starting 3 Quarters is that company did not perform well and results were also not
good. From April, 07 the company started to do well because various reasons like
company started its operation of manufacturing mono-ethylene glycol (MEG), strong
results in all 3 Quarters, acquiring a subsidiary and declaration of bonus.
67
6. FINANCIAL PERFORMANCE
Analysis:-
The company posted a loss in March 2007 quarter mainly on account of a sharp drop in
sales. This had been its lowest sales ever. And this was probably on account of the
company shutting down its plant for over three weeks for debottlenecking. The sales
fell but the over outgo increased, and this depressed the bottom lines further, pushing it
into losses. Simple – income falls and expenses increase, loss is bound to be there.
The effect of the removal of the debottlenecking was seen in June 07 quarter as its sales
soared to a new high, its highest ever. And naturally, when there has been such a vast
increase in the top line, the bottom lines were up despite increased outgoes on interest,
depreciation and over expenses.
68
RATIOS
 RETURN ON CAPITAL EMPLOYED
CAPITAL
YEAR PBDIT EMPLOYED ROCE
Year Ended 06-07 1210.98 8651.84 14.00
Year Ended 05-06 1234.98 7836.40 15.76
Year Ended 04-05 1540.31 6041.20 25.50
 RETURN ON EQUITY
YEAR NET PROFIT NET WORTH ROE

Year Ended 06-07 410.53 3161.62 12.98
Year Ended 05-06 585.76 2860.25 20.48
Year Ended 04-05 789.74 2411.66 32.75
 DEBT EQUITY RATIO
DEBT EQITY
YEAR TOTAL DEBT EQUITY RATIO
Year Ended 06-07 5509.14 278.82 19.76
Year Ended 05-06 4992.57 278.82 17.91
Year Ended 04-05 3699.31 278.82 13.27
 EARNING PER SHARE
YEAR EPS
Year Ended 06-07 14.72
 P/ E RATIO
YEAR C .M. P* EPS P/ E

FY 07 104.65 14.72 7.11
FY 06 151.05 21.01 7.19
FY 05 146.15 28.32 5.16
* - C.M.P is taken as on 31.03.05, 31.03.06 and 31.03.07 respectively
69
7. SHAREHOLDING PATTERN
Analysis:-
From the Shareholding pattern we can say that the company is sound enough because
49% share is with promoters and company have overseas subsidiary which shows there
is likely to be increase in share of FII‘s.
70
8. CAPITAL MARKET PERFORMANCE
 RELATIVE INDEX
Analysis:-
The Company India Glycol is performing well as compared to Sensex. The company‘s
share price was around Rs.107 to Rs.122 from January, 07 to March, 07 because
results for the quarter ended December 31, 2006 was not promising. The earnings
dropped by 46.58% and profits also fell. Then after that the stock started taking a
momentum and reached to Rs.179 in August, 07 from Rs.138 in April, 07. Company
declared a 30% dividend in September,07 and results also for AMJ,07 quarter where
good as there was phenomenal jump in net profits as it rose to 2.97 times and sales also
rose by 6.33% as compared to previous quarter. As a result of all this in Sepetmber, 07
the stock did well and touched Rs.256 mark. From October, 07 to December, 07 the
stock traded between Rs.368 to Rs.460 because of strong financial performance in the
September, 07 quarter the net profit rose to 2.33 times and sales jumped to 58.07% and
also in this period company establishes overseas subsidiary. The company‘s share price
touched a 52 week high of Rs.510 in January, 08.But from January, 08 to March, 08 the
share price started declining and it reached to Rs.246. The main reason was that the
company acquired Shakumbari Sugar with a stake of 96.56%.
71
 VOLATILITY
In volatility Calculation - Historical volatility using excel sheet has been
calculated. In one column we have taken the closing price of India glycols from
14.09.07 to 14.03.08 and in next column daily price changes i.e. by (Subtracting
today‘ s price from yesterday‘s closing price and dividing by yesterday‘s
closing price) have been taken.
Then taking the ‗STDEV‘ (standard deviation) of all the calculated daily price
changes we get the value in % which is the ‗Historical Volatility‘ of the share
for the above mention period.
In this case Standard deviation is 4.28%
Then we have to take square root of trading days, so here we have taken 254 as
trading days. SQRT OF 254 =15.937.
Statistical volatility = 4.28*15.93=68.26%.
From this we can interpret that the share price has 68.26% potential to move up
or down with respect to the current price over the next 254 trading days. This
means that the share price of India Glycols can touch a 400 mark in 254
trading days, but there are also various factors which support market which can
lead to change in volatility of share price.
72
9. RECENT STRATEGY
India Glycols acquires Shakumbari Sugar

India Glycols acquired a controlling stake of 96.56% in Shakumbari Sugar &
Allied Industries, located in Uttar Pradesh. The company acquired the majority
stake at a consolidated price of Rs 470 million. They have acquired 3, 17,
24,200 shares of Rs 10 each of Shakumbari Sugar and Allied Industries.
Shakumbari Sugar & Allied Industries has a crushing capacity of 3,200 tons per
day (TCD) along with a modern distillery of 40 kilo litres per day (KLPD).
India Glycols establishes overseas subsidiary

New Delhi-based India Glycols, a company engaged in manufacturer of glycol
chemicals, incorporated an overseas 100% subsidiary Private Company by
shares. The company established this subsidiary to augment its activities in
South Eastern region and other related activities. India Glycols is the largest
ethoxylate, glycol ether producer and leader in ethylene oxide
derivatives/surfactant business in India.
73
10. SYNTHESIS
India Glycols is the first and only company in the world to produce Ethylene
Oxide (EO) / Mono Ethylene Glycol (MEG) from renewable agro route based
on molasses, which is a by-product of the sugar industry.
MEG is used in the manufacture of polyester resins, films fibres, and is an

important raw material used in the production of coolants, antifreezers, aircraft
ant-icers and solvents. Thus the client base of India Glycols covers almost entire
India Inc, supplying MEG to more than 1,000 customers in various end-use
industries such as Textile, Agrochemical, Oil & Gas, Personal Care,
Pharmaceuticals, Brake Fluids, Detergent, Emulsion Polymerisation & paints
etc.
Making MEG from ethanol is highly cost effective as against using crude,
which is currently ruling at record high prices. Using crude is uneconomical and
world over; companies are shifting to use of such renewable agro routes.
Currently the price of ethanol has been fixed at Rs.21.50 per litre for the next
three years (which is less than a dollar) and this is in no way even comparable to
the over $100 per barrel of crude. So in this context, India Glycols, having the
largest plant in India for making MEG from ethanol has a great advantage.
The company is now in the midst of enhancing its MEG capacity by 20% at an
investment of Rs.25 crore resulting in a very attractive payback.
During the quarter, the company acquired a controlling stake in Shakumbari

Sugar & Allied Industries at a consolidated price of Rs.47 crore, which has a
crushing capacity of 3200 Tonnes per Day (TCD) along with a modern
distillery of 40 kilo litres per day (KLPD). With this acquisition, the company
would be vertically integrated to captively produce additional ethanol
requirements.
The company has also established its subsidiary in Singapore to augment its
activities in South Eastern Asian region and other related areas. It is already
exporting to South East Asia, Middle East, Europe, Australia and USA.
Apart from this, the company has also got into purifying Carbon Di-oxide
(CO2), a by-product produced in the distillery, both at its Kashipur and
Gorakhpur units which have application in food, beverage and other industrial
usage. CO2 plants at both distilleries are to be commissioned in March 2008.
Indian Glycols has had a super third quarter ending. For Q3 ended 31 st
December 2007, the company, on a QoQ basis reported a 26% jump in net sales
at Rs.449.98 crore, which on a YoY was up by 93%.
EBIDTA was up in Q3, on a Q0Q by 29% at Rs.113.53 crore which YoY was
up by a whopping 219%. OPM improved from 15.27% in Q3 FY07 to 24.52%
in Q2 FY08 and now in current Q3, it was at 25.23%.
74
The best probably jump has been in its net profit. For the current Q3 it was at
Rs.67.50 crore, which on a QoQ indicated a jump of 40% but YoY, it has gone
by an unbelievable over 6 times. NPM rose from a meager 4% in Q3 FY07 to
13.56% in Q2 FY08 and now in Q3 FY08 it stands at a healthy 15%.
On equity of Rs.27.88 crore, the company, for Q3 FY08 posted an EPS of

Rs.24.21. What this means is that the company will end this fiscal with an EPS
of Rs.80, that‘s a certainty. Also based on the present earnings, one can safely
say that for FY09, the company will have an EPS of Rs.100, what with the
additional capacity also expected to go on stream.
The cash EPS for Q3 was at Rs.31 and this means that we are looking at a
certain cash EPS of around Rs.100 in FY08 and Rs.120 in FY09.
For a nine months ending 31 st December 2007, though the company had forex
gains of Rs.21.80 crore, the same would get added on in FY09 through
improved performance and hence an EPS of Rs.100 for FY09 can be reasonably
expected.
The stock is currently quoted at Rs.261, giving us a PE of just 3 on the EPS of

Rs.80 estimated for this fiscal and if we look at the expected EPS of Rs.100 in
FY09, the PE works to a measly 2.50 times. Now if that isn‘t good enough,
nothing else will be!
What makes India Glycol a great buy is the fact it has a unique business model
which enables the company to produce petrochemicals and specialty chemicals
from renewable agro route base and that too where the cost of the raw material
is fixed and is available in abundant supply. Coupled with growing demand and
higher margins through larger volumes, there is no way that this winner of a
company can falter. The icing on the cake is that currently, looking at the future
discounting, the company is quoted at a dirt-cheap price.
One can safely buy India Glycols at the current rate of Rs.261 for a sure 50%
return over the next 12 months.
References
 www.indiaglycols.com
 www.myiris.com
75
IV. ANALYSIS OF REALTY INDUSTRY (27.3.08 TO
18.05.08)
CONTENT
1. OVERVIEW OF ECONOMIC & REAL ESTATE………………..77
2. GOVERNMENT POLICIES………………………………………...79
3. DEMAND DRIVERS OF THE REAL ESTATE…………………...81
4. DEMAND & SUPPLY AT MAJOR CITIES……………………….84
5. ROLE OF NRI IN REAL ESTATE SECTOR……………………..89
6. COMPANY ANALYSIS
I. UNITECH……………………………………………………91
II. HINDUSTAN CONSTRUCTIONS (HCC)…………………96
III. PARSVNATH DEVELOPERS……………………………..103
IV. HOUSING DEVELOPEMENT & INFRASTRUCTURE
LTD (HDIL)….……………………………………………...112
V. DLF………………………………………………………….118
VI. OMAXE……………………………………………………..125
VII. BRIGADE ENTERPRISE…………………………………..130
VIII. KOLTE PATIL DEVELOPERS…………………………….133
IX. AKRUTI CITY……………………………………………....137
X. IVR PRIME URBAN………………………………………...142
XI. ORBIT CORPORATION……………………………………146
XII. INDIA BULLS REAL ESTATE…………………………….152
7. COMPETITION………………………………………………………..158
8. MARKET PERFORMANCE...………………………………………..165
9. KEY HIGHLIGHTS OF METROS ………………………………….167
10. SYNTHESIS……………………………………………………………169
76
1. OVERVIEW:
 INDIAN ECONOMY:
India is the twelfth largest economy in the world in terms of absolute GDP. In recent
years, India has experienced a rapid economic growth. India‘s GDP for last four years
is:
GDP (in %)
Year
2007-08 9.1
2006-07 9.4
2005-06 9.0
2004-05 7.5
India‘s economy is expanding rapidly, with a GDP growth rate of around 9.1% in 2008.
This has in turn propelled rapid growth in disposable income, allowing consumers to
afford and demand good infrastructure services. If we look at India‘s urban
infrastructure we see poor and overcrowded public transport, jam-packed roads,
inadequate water and sewage systems, and uncollected solid waste. The situation is
even at risk of worsening, because the economic boom confronts India with a
significant increase in urbanization. The services sector is rapidly expanding,
contributing over 60% of GDP. An important factor in the growth of services sector has
been the strong growth of IT and IT Enabled Services (ITES) sectors, i.e. BPO and
KPO services. The industrial sector is only gradually outgrowing its niche. About 20%
of GDP is generated by industry (including the construction and energy sectors), but it
employs only about 12% of the labor force.
Source: www.rbi.org and www.cso.nic.in
77
 REAL ESTATE SECTOR IN INDIA:
Historically, the real estate sector in India has been unorganized and characterized by
various factors that did not involve organized dealing such as the centralized title
registry providing title guarantee, lack of uniformity in local laws and their application,
non availability of bank financing, high interest rates and transfer taxes and lack of
transparency in transaction values. In recent years, however, the real estate sector in
India has exhibited a trend towards greater organization and transparency, accompanied
by various regulatory reforms.
The trend towards greater organization and transparency has contributed to the
development of reliable indicators of values and organized investments in the real
estate sector by domestic and international financial institutions and has resulted in the
greater availability of financing for real estate developers. Regulatory changes
permitting foreign investment are expected to further increase investment in the Indian
real estate sector. The nature of demand is also changing with heightened consumer
expectations that are influenced by higher disposable incomes, increased globalization
and the introduction of new real estate products and services.
Cumulative investments of Rs.5106 billion in real estate- related construction, leading

to 8288 million sq. ft of additional space between fiscal 2006 and 2008.It is expected
that the real estate sector would grow at 30% p.a. to reach to $45 to $50 billion by 2010
from the existing $12 billion.
To achieve such a growth, real estate in India would require huge investments over the
next five years. By 2015, it is projected that the market size would grow to $90 Billion.
High economic growth has fuelled the demand for real estate. Cities continue to attract
interest from IT and ITES companies that are either establishing a base or are looking
to expand.
According to one estimate, the IT and the ITES sector are creating over 200000 jobs
per annum which itself will create a demand for commercial space of 15 million square
feet. Besides, it will also generate a huge demand for residential flats. So there will be
more need for luxury lifestyle residential apartments in India.
India has become the second-most favored destination for FDI in the world because the
government has allowed 100% foreign investment in the real estate sector from
November 2005. As the investment scenario in India changed, India attracted more than
three times foreign investment at US$7.96 billion during the first half of 2005-06 fiscal.
78
2. GOVERNMENT POLICIES:
Investments in infrastructure have a long-term horizon, and as such the need for
political continuity and stability is a vital concern. This implies that investment in
infrastructure is highly political in nature and it is often the lack of political stability
that holds back necessary investment. Investors are hesitant to make long-term
commitments for fear of government intervention and breaches of contractual
obligations.
India has a well-established democracy and policy liberalization has progressed in
recent years. But India‘s current fractious government – the United Progressive
Alliance (UPA), a 19-party coalition led by the Congress Party – has made some
investors nervous due to the potential for derailment. The congress Party constantly
competes with many of its coalition partners, which slows necessary reforms. The
privatization of the government-owned businesses continue to generate political debate,
advances are being made but only at a slow pace. The balance of power for
infrastructure planning and control among the central government, the 28 states and
seven territories (including the National Capital Territory of Delhi) is gradually
changing. In the past, the central government was dominant. At the moment the state
governments are playing an increasingly important role, as regional parties have grown
in strength. This decentralization trend has developed more or less autonomously
within the different states or infrastructure sectors, which has resulted in a complex
bureaucratic system that foreign players find difficult to understand. But most of all it
has slowed the process of infrastructure development in India.
The World Bank, in fact, expects the investment requirements to amount to USD 425
bn. According to the 11th FYP, even more than USD 450 bn worth of investment is to
flow into India‘s infrastructure by 2012. In order to fund these investments India‘s
Planning Commission has called on the government to increase the current gross
capital formation for infrastructure from around 5% of GDP to 9% of GDP for the
period 2008 to 2012.
Policy on foreign direct investment
India‘s government encourages not only domestic but also foreign private capital to
invest in India‘s infrastructure.
As a part of these policy reforms, the Foreign Investment Promotion Board (FIPB) has
been changed and the Indian Investment Commission established to act as a one-stop
shop between the investor and the bureaucracy in order to speed up the FDI project
review process. FDI inflows into various infrastructure sectors are now permitted up to
100% under the automatic route, i.e. without prior approval of the FIPB and the
Ministry of Finance.
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Recent amendments:
The government to liberalize the norms for foreign direct investment (FDI) in
real estate. The department of industrial policy and promotion (DIPP) has
circulated a Cabinet note proposing waiver of two conditions—the three-year
lock-in on foreign investment and the minimum investment criteria of $5
million for joint ventures or $10 million for wholly-owned ventures.
The waiver has been sought for real estate projects, including hotels. The
proposal has been justified on the ground that it would boost tourism and
hospitality, sectors which will be plays as vital job creators.
At present, 100% FDI is permitted in hotels and tourism as well as real estate.
However, realty FDI faces a three-year lock-in—the investor cannot sell his
stake during this period. If one wishes to exit before three years, one will have
to take the permission of the Foreign Investment Promotion Board (FIPB).
There are also the stipulations for development of at least 10 hectares of land,
and completion of at least 50% of the scheduled construction in five years of
obtaining all statutory clearances, in addition to the minimum capitalization
norm mentioned above. These conditions do not apply to the hospitality sector.
Moreover, DIPP‘s move to exempt pre-IPO foreign investment from the three-
year lock-in had faced stiff resistance from both RBI and the finance ministry.
The proposal, which was a part of an overall FDI review, was not cleared by the
Cabinet. DIPP is planning to take the proposal again to the Cabinet.
Government is also working on new policy that is revenue- sharing model
.Under this model the government will lease out land to a private land developer
and enter into revenue –sharing agreement. The bidder who offers the highest
revenue- share ratio to the government will bag the project.
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3. DEMAND DRIVERS OF THE REAL ESTATE:
Residential real estate development

The growth in the residential real estate market in India has been largely driven by
rising disposable incomes, a rapidly growing middle class, low interest rates, fiscal
incentives on both interest and principal payments for housing loans and heightened
customer expectations, as well as increased urbanisation and nuclearisation.
India‘s housing shortage has increased from 19.4mn units in 2004 to 22.4mn units in
2006 and is expected to rise further; and the retail market for mortgages grew by 30%
in the second quarter of 2004 and is expected to further grow at a CAGR of 17% from
US$16bn in fiscal 2006 to US$30bn in fiscal 2009.
There is scope for 400 township projects over the next five years spread across 30 to 35
cities, each having a population of more than 0.5mn and that the total project value is
estimated at US $40bn.
The number of households with annual incomes is expected to increase in size by 23%
to 28%, between fiscal 2002 and fiscal 2010.These higher incomes will allow people to
buy houses in luxury and super luxury residential developments.
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The residential sector is expected to continue to demonstrate robust growth over the
next five years, assisted by the rising penetration of housing finance and favoura ble tax
incentives.
Commercial real estate development

The recent growth of the commercial real estate sector in India has been fuelled, in
large part, by the increased revenues of companies in the services business, particularly
in the IT and ITES sectors. The IT and ITES sectors will continue to grow and generate
additional employment, which further, will result in increased demand for commercial
space.
Within the IT and ITES sectors, the Indian off shoring operations of multinational
companies are expected to increase demand for commercial space. The total demand
for commercial office real estate in 2005 in the top seven centres of Bangalore,
Chennai, Delhi-NCR, Mumbai, Pune, Hyderabad and Kolkata was over 22mn square
feet and is expected to over 31mn square feet in 2008.The IT and ITES sectors would
require additional space of around 87mn square feet between fiscal 2006 and 2008. The
IT, ITES and related sectors are estimated to account for more than 70% of net demand.
Capital flows into commercial real estate over the next three years are estimated at
more than US$5bn.
Retail real estate development

Retail segment in India is expected to grow at a rate of 25% to 30% over the next five
fiscal years. The growth of organized retail segment is expected to be driven by
demographic factors, increasing disposable incomes, changes in perception of branded
products, the entry of international retailers into the market, the availability of cheap
finance and the growing number of retail malls.
The major organized retailers in India currently include Reliance Retail, Tata-Trent,
Pantaloon, and Shopper‘s Stop, RPG Group, Vishal Retail, Subhiksha, Croma by Tatas
and More by Aditya Birla Group. While the organized retail segment has so far been
limited to larger cities in the country, retailers have announced major expansion plans
in smaller cities and towns. The growth of organized retail in India will also be affected
by the reported entry into the sector of major business groups such as Reliance, Bennett
& Coleman, Hindustan Lever, Hero Group and Bharti. International retailers such as
Metro, Shoprite, Lifestyle and Dairy Farm International have already commenced
operations in the country. It is estimates that, over the next five years, 73.78mn square
feet of floor space and Rs369bn of real estate investment will be required to sustain the
growing organized retail market.
Hotels
Recent growth in the hotel sector in India has primarily been caused by the growing
economy, increased business travel and tourism.
According to the World Travel and Tourism Council, revenue from foreigners
travelling to India is expected to grow to $24 billion by 2015.Indians traveling in India
as well as abroad is expected to spend $63 billion by 2015.This shows that hotel
industry has clearly entered the global stage but still there is shortage of 150,000
rooms which caused a massive price escalation of hotel room rates. The demand is
going to exceed supply by at least 100% over next two years. An estimated $11.41
billion is expected to be seen in the hospitality sector in the next two years and India is
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likely to have at least 40 international hotel brands by 2011 by the help of world
international fund companies like Blackstone, Morgan Stanley, Walton Street Capital
,Starwood Capital , Merrill Lynch ,West bridge Capital ,Lehman Brothers etc. The
above companies have already started investing in India like Lehman Brothers invested
$100 million in Future Capital Holdings for a hotel project in India. This will also
generate the maximum number of employment which will be 426,668 in 2008 .Which
will give rise to level of income and increase in demand for residential space.
It is estimated that investments in the hotel industry will be approximately Rs90bn over
the next five years. According to World Travel and Trade Council Indian tourism
demand is expected to grow at 8.8% till 2013.
DLF and Hilton Hotels Corporation in India have signed management agreements
involving 7 new hotel developments in the pipeline. This marks the second phase in the
DLF-Hilton JV Company‘s overall strategic development plans to build and develop 75
hotels in India in the next 5-7 years.
SEZs
SEZs are specifically delineated duty free enclaves deemed to be foreign territories for
the purposes of Indian custom controls, duties and tariffs. There are three main types of
SEZs: integrated SEZs, which may consist of a number of industries; services SEZs,
which may operate across a range of defined services; and sector specific SEZs, which
focus on one particular industry line. Regulatory approvals have been received for
SEZs proposed to develop by a number of developers, includes DLF, Reliance
Industries Limited and Mahindra Gesco Developers Limited. SEZs, by virtue of their
size, are expected to be a significant new source of real estate demand.
According to the Ministry of Commerce and Industry, 61 SEZs are currently approved
and under establishment. As of March 31, 2005, there were eight functional SEZs
operating in India comprising 811 units, employing over a 100000 people. Investment
per unit in these SEZs is around Rs18bn.
Special Economic Zone, better known as SEZ is a specifically delineated duty free
enclave formed to provide companies with international competitive advantage for
producing goods and services. The units in such area enjoy trade and fiscal benefits and
have access to superior infrastructure, internationally competitive credit products and
lower bureaucratic problems. Through these zones the government is hoping that
foreign companies will be able to avoid restrictive labor laws which in turn will
encourage greater FDI inflow and stronger employment rates.
Source: www.indiainfoline.com
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4. DEMAND & SUPPLY AT MAJOR CITIES:
Office Market:
Mumbai:
The year 2007 saw a supply of 4.6 million sq. ft. Grade A office space in the Mumbai
market. The year saw a positive trend in supply terms because in 2006 it was just 2
million sq. ft. The Bandra- Kurla Complex (BKC) and Andheri were the major supply
contributors with 2.6 million sq. ft. which was 60% of the total supply. But the demand
outpaced the supply with a demand shift for IT/ITES services. But still the supply was
able to decrease the average vacancy levels from 13% to 7% QoQ.
NCR
In year 2007, the NCR region saw a supply of 8 million sq. ft. Significant supply was
seen in the year 2007, but it was not able to fulfill the office space appetite in Delhi &
its suburbs and proved to be inadequate due to the pre-construction leasing
commitments of 2006. Thus, owing to the constant demand, supply was not able to
match the pace with it.
Chennai:
By the end of year 2007, the overall supply of Grade A space stood at an astonishing
figure of
Approx 8.5 million sq. ft. Though the market witnessed quite an optimum supply, the
shift in concentration of supply and the sudden increase in demand for Grade A office
space eventually led to the increase in rentals.
Bangalore:
Year 2007 saw a cumulative Grade A supply of over 5.5 million sq ft in the prominent
locations of Bangalore. Bangalore continued to be a preferred location of IT/ITES
sector. A slight initiation of demand dip was observed in year 2006 owing to poor
infrastructure conditions in both existing & newly developed areas.
Residential Market:
Mumbai:
In 2007, a cumulative Grade A supply of around 4.5 million sq ft was added into the
Mumbai residential market. During Q4_07, some landmark transactions were witnessed
with one of them being at Apsara (NCPA), Nariman Point; where an apartment was
sold at a whopping INR 1 lakh per sq ft. The transaction reflected huge demand present
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for high-end options on resale in the prime South Mumbai market. Continued demand
for quality apartments in the suburbs like Bandra, Andheri etc was observed from
middle & upper middle income segments from an end-user perspective.
With new infrastructure developments and SEZs coming up in the suburbs, increased
construction activity for residential development has also been observed in suburban
locations like Panvel, Kharghar and other less developed areas of Kamothe and
Kalamboli. Keeping in view the extensive commercial and retail developments taking
place and announcement of the new International Airport, these locations are being
positioned as lucrative investment options.
The major developers in this area are India bulls, DLF, Peninsula, Future Group, etc.
Delhi:
0.3 million sq. ft. quality residential space was added in the NCR market.
Demand from end users and investors for premium residential options remained
persistent. A demand shift from Delhi towards the suburban locations like Gurgaon &
Noida was witnessed due to lack of quality apartments in the affordable price range in
most of the preferred locations like VasantVihar, Shanti Niketan etc. Moreover, owing
to increased infrastructure development, limited quality stock of affordable options in
South Delhi and reduced travel time between Delhi and Gurgaon, expatriates prefer
quality residential options in Gurgaon.
Chennai:
The residential market received a supply of around 0.2 million sq ft space, out of which
the prime areas contributed to around 0.1 million sq. ft. Last quarter of 2007 also
witnessed the launch of many large scale projects by renowned developers like India
Bulls real estate, EMAAR MGF, IVR Prime Urban developers among others.
Bangalore:
Year 2007 for Bangalore residential market ended on a positive note in terms of supply
levels. The city received a cumulative residential supply of around 6.4 million sq ft
during the whole year. Land market is witnessing slight stabilization with additional
land supply brought into the city boundary under new master plan. Over the last six
months, the market observed a check on demand activity owing to high prices,
increased loan interest rates and wait-n-watch attitude of buyers/investors.
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Conclusion:-
To sum up we can say that demand for luxury homes has come down 10% in last 3
months and this is going to fall 10% more because the people who invested in the stock
market have lost money. There is not enough money to invest in real estate, stock
market or gold. There is one more reason for the slump in demand, if we see the
properties prices have escalated 40-45% in the last two years, whereas salary levels
have only grown 14-15% during the same period. From, this we can say that a house
which used to cost Rs60 lakh in 2005-06 will now cost Rs.1.25 crore at present. So
definitely there is a slowdown in demand.
 COMMERCIAL PROPERTY CAPITAL VALUES
MUMBAI (RS./SQ.FT)
PLACES RATES AS RATES AS
ON ON
03/04/2008 1/05/2008
NARIMAN POINT
49,000 45,000
WORLI
42,500 40,000
BKC/CST ROAD
40,000 38,500
LOWER PAREL
35,000 33,500
BALLARD ESTATE
25,000 27,500
FORT/CHURCHGATE
25,000 27,500
ANDHERI (E)
20,000 18,000
POWAI
15,000 16,500
MALAD (MINDSPACE)
11,750 12,000
NAVI MUMBAI
9,250 9,500
THANE
6,750 7,250
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BANGALORE
PLACES
M.G.ROAD
9,000 9,000
RESIDENCY ROAD
8,000 8,000
INDIRA NAGAR
8,000 8,000
WHITEFIELDS
3,500 3,500
NCR (NATIONAL CAPITLAL REGION)

PLACES
CONNAUGHT.PLACE
42,250 42,250
NEHRU PLACE
35,625 35,625
B CAMAJI PLACE
29,250 29,250
OKHLA INDL AREA
13,875 13,875
GURGAON
13,400 13,400
NOIDA
12,250 12,250
MC AREA
11,250 11,250
PUNE
PLACES
BUND GARDEN
8,500 8,000
SENAPATI BAPAT
7,500 7,250
AUNDH
6,500 7,000
KALAYANI NAGAR
5,500 6,000
KARVE ROAD/KOTHRUD
5,500 5,750
YERWADA/AIRPORT
ROAD 4,750 5,000
BANER
4,500 4,750
NAGAR ROAD
4,500 4,750
HADAPSAR
4,500 4,750
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KOLKATA
PRICES
PARK STREET
9,000 9,300
CAMA STREET
7,650 8,000
SALT LAKE
5,000 5,200
DALHOUSIE
4,750 4,800
HYDERABAD
PLACES
BANJARA HILLS
6,750 7,000
JUBLIEE HILLS
6,750 7,000
RAJ BHAVAN RD.
6,500 6,500
BEGUMPET
6,000 6,000
SOMAJI GUDA
6,000 6,000
MADHAPUR
5,250 5,500
HIMAYAT NAGAR
4,500 4,500
Source: - Economic Times – ET Realty
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5. ROLE OF NRI IN REAL ESTATE:
As home sales continue to dip, real estate developers are tapping the luxury home
segment by targeting Non-Resident Indians and high net worth individuals keen on
buying the exclusive villas in India. The move also seems to be backed by pure market
play as demand in the luxury home segment is growing sharply, bucking the trend seen
in other areas of the industry where exposure to high-risk borrowers has tightened loan
flow from banks. Real estate players feel that ‗nouveau riche‘ is now moving up the
chain and extending their possessions to luxury homes with ultra sophisticated
amenities like personal swimming pools, jogging tracks, health clubs and personal
gardens. Leading real estate developers like Sobha Developers, DLF, Kalpataru, Nitesh
Estates, Unitech, Omaxe, Royal Palms, Lodha Developers and Marvell Realtors are
currently developing projects in cities like Mumbai, Delhi, Pune, Goa, Bangalore and
Kerala, with the price of an average luxury home varying between Rs 3 crore and Rs 50
crore. The price of the luxury home depends on the city it is built in and the range of
amenities it offers.
Rising incomes, easy financing and population growth are driving demand for housing
and luring overseas investors.
India will have at least 50 property-related initial public offerings in the next year as the
real estate industry booms because government is also giving proactive support to
whole sector.
NRI investors were poised to invest over $5 billion in the Indian real estate sector.
Religious tourism is pushing the realty industry‘s growth in destinations like

Vrindavan, Mathura, Haridwar, Ajmer, Amritsar, Tirupati and Nasik - cities on the fast
track and emerging hot spots for real estate developers.
Religious towns have good growth prospects. They are witnessing more than 45 %
annual rise in property prices against the average 25-35% in Tier II cities. Increasing
demand will push growth further. More number of people are investing in property in
these towns that attract a large number of pilgrims from India and abroad promising
inner tranquillity and spiritual bliss. The investment in these areas in less than three
years comes to Rs 15000 crore. This place attracts many non-resident Indians and
foreigners, apart from the usual visitors which lead to huge demand for good housing
from foreigners and NRIs. People are investing in these places as post- retirement
options and their second weekend homes.
It is not the local developers alone who are reaping profits. Even Big players like API,
Omaxe, Unitech and Sahara group are coming up with their projects in these cities.
Omaxe, for instance, has lined up a 440-acre integrated township with more than 2,000
residential units on the Jaipur-Ajmer Expressway to tap visitors to the famous Sufi
shrine of Khwaja Moinuddin Chisti. The company has also plans in Varanasi,
Allahabad, Rishikesh, Haridwar, Vrindavan, Tirupati and Puri.
89
Similarly, Ansal-API has forayed into this market with two townships with their
Sushant City brand - one in Ajmer spread over 125 acres of land and the other at
Kurukshetra over 200 acres.
Unitech and Sahara also have similar plans for Varanasi, with the former already
announcing a 1,500-acre integrated township there.
That is the reason property prices in cities and towns like Amritsar and Ajmer have
gone up by five times in the past two years and more such townships are in the offing.
90
6. COMPANY ANALYSIS
The following 12 companies have been analyzed for real estate industry:-
I. UNITECH
FINANCIAL PERFORMANCE:
Source: www.bseindia.com
Analysis:-
The above figure shows that there has been an increase in the PAT over the recent
quarters and the net profit margin has also shown an upward trend in the recent quarter.
But the reason for lower margin in Sep. 07 is the decrease in sales and increase in the
expenses, mainly the other expenses.
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RATIOS:
RETURN ON CAPITAL EMPLOYED

YEAR PBDIT CAPITAL EMPLOYED ROCE
Year Ended 06-07 13956.79 42491.56 32.85
Year Ended 05-06 1327.81 6309.02 21.05
Year Ended 04-05 549.98 3332.24 16.50
RETURN ON EQUITY
Year Ended 06-07 9835.58 11610.02 84.72
Year Ended 05-06 696.43 2245.34 31.02
Year Ended 04-05 299.16 1739.08 17.20
DEBT EQUITY RATIO

DEBT EQUITY
Year Ended 06-07 36070.83 11610.02 3.11
Year Ended 05-06 6887.55 2245.34 3.07
Year Ended 04-05 3258.85 1739.08 1.87
EPS
No. of outstanding
YEAR PAT shares EPS
Year Ended 06-07 9835.58 811.69 12.12
Year Ended 05-06 696.43 62.44 11.15
Year Ended 04-05 299.16 62.44 4.79
P/E
YEAR MPS EPS P/E
Year Ended 06-07 387.35 12.12 31.97
Year Ended 05-06 2785.45 11.15 249.74
Year Ended 04-05 337.35 4.79 70.41
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SHAREHOLDING PATTERN:
93
THE PROJECTS UNDERTAKEN:
COMMERCIAL:
Unitech shows its presence regarding the commercial projects in:
Delhi
Gurgaon
Kolkata
RETAIL:
In retail, it is present in the following areas majorly:
Delhi
Noida
Gurgaon
Kolkata
Bangalore
RESIDENTIAL:
For the residential projects, it has shown its presence in:
NCR
Agra
Lucknow
Kolkata
Varanasi
Hyderabad
Mumbai
Chennai
Bangalore
Kochi
Source: www.unitechgroup.com
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RECENT UPDATES:
 Private equity players Lehman Brothers and Deutsche Bank will invest
USD 500 million in an SPV floated by Unitech, reports Economic
Times. The two PE players are in the final stage of negotiation with
the country`s second-most valued real estate developer for buying
minority stake in the SPV. The deal is likely to be closed in the next
three weeks. The SPV was formed to execute two commercial projects
in Mumbai.
 Unitech to pump in Rs 90 bn in two properties at Hyderabad. Unitech

has secured two real estate projects in Hyderabad and will be developed
over the next eight years at an investment of about Rs 90 billion. The
company has bagged a mixed-use project located at Budvel from
Hyderabad Urban Development Authority (HUDA) for development of
residential, commercial and retail space over 164 acre of land. The total
investment on this project would be Rs 30 billion, including about Rs
6,640 million for land. The company expects to generate revenue of Rs
60 billion from this project. The construction work is expected to start in
the next fiscal.
Source:
i. www.myiris.com
ii. www.bseindia.com
iii. Various newspapers
iv. Various journals
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II. HINDUSTAN CONSTRUCTION
ABOUT THE COMPANY:
HINDUSTAN CONSTRUCTIONS (HCC) is a front-runner in the engineering

construction space for the last 8 decades, having executed over 300 Bridges, 42 Dams
and Barrages, 13 Hydel and 4 Nuclear Power plants, 140 Kms of Tunneling and 1,000
Kms of Roads and expressways. HCC‘s major engineering landmarks include the
world‘s longest barrage at Farakka in West Bengal, India‘s first underground metro at
Kolkata and the second one in New Delhi, the Mumbai-Pune Expressway – India‘s first
six-lane expressway, the unique double curvature arch dam at Idukki in Kerala and one
of Asia‘s largest breakwaters at Ennore Port in Tamil Nadu. HCC has constructed four
out of seven operational nuclear power plants and has constructed more than 23% of
India‘s installed hydel capacity. The Company is also developing free India‘s largest
Hill Station, Lavasa, spread across a picturesque landscape of 100 sq kms, and is
located 4 hours drive from Mumbai.
The company got listed at Re. 1 per share on BSE and NSE.
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Analysis:-
From the above figure we derive that the performance of the company in the second
quarter was not as good as the other quarters. This was because of the decline in the net
sales of the company. But it has regained its profit levels in the next quarter.
97
RATIOS
Year Ended 06-07 2461.00 22264.95 11.05
Year Ended 05-06 1857.43 20611.81 9.01
Year Ended 04-05 1652.63 7194.97 22.97
RETURN ON EQUITY
Year Ended 06-07 1218.00 9040.75 13.47
Year Ended 05-06 1247.98 8898.14 14.03
Year Ended 04-05 740.20 3529.84 20.97
DEBT EQUITY RATIO

DEBT EQITY
Year Ended 06-07 15510.60 9040.75 1.72
Year Ended 05-06 12978.39 8898.14 1.46
Year Ended 04-05 4256.82 3529.84 1.21
EPS
No. of outstanding
YEAR PAT shares EPS
Year Ended 06-07 1218 256.25 4.75
Year Ended 05-06 1247.98 256.25 4.87
Year Ended 04-05 740.2 229.36 3.23
P/E
YEAR MPS EPS P/E
Year Ended 06-07 89.45 4.75 18.82
Year Ended 05-06 173.15 4.87 35.55
Year Ended 04-05 478.75 3.23 148.35
Source: www.myiris.com
98
99
PROJECTS:
The company has shown its presence in many cities for various projects.
The major projects that were undertaken are:
1. Bandra Worli sea link

The link will provide a fast moving outlet from South Mumbai to the suburbs in the
west. This link will also help in reducing the present congestion on the Mahim
Causeway (which is the only link available at present between western suburbs and
south Mumbai) and Western Express Highway.
The project envisages construction of 8 lane Sea link freeways from the interchange of
Mahim intersection at the Bandra end to Worli Sea face on Khan Abdul Ghaffar Khan
Road. The Construction of the sea link project is divided into four packages namely
Package I, Package II, Package III, and Package IV. The Package IV executed by HCC
forms the main and the most technically challenging construction package of this
project.
2. Godavari bridge
HCC was involved in the design and construction of this superstructure for the III
Godavari Bridge across river Godavari at Rajahmundry.
The construction of Godavari Bridge Superstructure was unique in nature and the first
of its kind in Asia in the annals of Railway Bridges, involving technical know-how and
a challenging type of construction. The length of bridge is 2745 m.
3. Naini bridge
This project involved construction of Concrete Cable Stayed Bridge across river
Yamuna at Allahabad/ Naini on NH-27 in Uttar Pradesh. The scope of work included
the construction of a 4-lane Concrete Cable Stayed Bridge with an approach road on
both sides consisting of four modules. Total length of this bridge is 1510 m. The project
has been executed by HCC in joint venture with M/S Hyundai, Korea
100
4. Kaliabhomora bridge Assam:
The project is the construction of Road Bridge over river Brahmaputra at Bhomaraguri
near Tezpur, Assam. Its total length is 3015m. The contract is worth Rs. 1348 million.
5. Mumbai Pune Expressway:

This project was given by Maharashtra State Road Development Corporation Ltd. The
project was worth Rs. 3503 million and was completed by March 2002.
6. West Bengal Road:

This project was given by National Highway Authority of India (NHAI). The project
was worth Rs. 3457 million and was completed by May 2005. It is a four laned flexible
pavement with central median of 5m width. The width of the pavement is 8.5m.
7. Kolkata metro:
HCC has built 6460 m of India's first Metro Railway Project at Kolkata in 6 different
packages. 5330 m of this stretch was built by using Cut and Cover method and the
balance 1.14 KM was built by using Shield Tunneling method. This was the first
Underground Rapid Transit System in India. The contract value was worth Rs.6360
million. It was completed in October 1996.
8. Delhi Metro:
It has undertaken Design, construction, equipping, testing and commissioning

(including integrated testing and commissioning) for the 4142 m long section from
North of Vishwa Vidhyalaya Station (inclusive) to South end of ISBT Station
(inclusive) of Metro Corridor by Cut and Cover Method. The Length of Metro is 4142
m and it covers four stations. The contract is worth Rs.9379 million. It was completed
in July 2005.It has also taken major projects in areas like Railways, Hydel Power,
Barrages, Dams, Power Plants, etc.
Source: www.hccindia.com
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RECENT UPDATES:
 Mumbai-based construction firm Hindustan Construction

Company said that it received a letter of acceptance (LoA) for
project worth Rs 3.75 billion. The contract involves execution of
civil works for underground rock cavern for strategic storage of
crude oil at Visakhapatnam, Andhra Pradesh. The contract was
awarded by the Indian Strategic Petroleum Reserves, New Delhi.
 Hindustan Construction Company has incorporated a special

purpose vehicle (SPV) company that is HCC Infrastructure, as a
wholly owned subsidiary of the company. The new company
will undertake infrastructure development projects.
Source:
i. www.myiris.com
102
III. PARSVNATH DEVELOPERS LTD (PDL)
ABOUT THE COMPANY:

The Parsvnath Group was founded in 1990 and is a buoyant conglomeration of
companies endowed with impeccable foresight, enviable expertise and innate acumen
providing cost effective and holistic solutions to the Real Estate & Construction World.
With more than two decades of experience in its repertoire, the group has already
stamped its presence in seventeen states and is now going Pan – India.
Funds raised through IPO – Rs.9971.4 million and Funds raised through Green Shoe
Option - Rs.926.34 million. The Total fund raised through IPO is Rs.10897.74 million.
The Company got listed on 30 th November, 2006 at Rs.300 on BSE and NSE.
103
FINANCIAL PERFORMANCE
Analysis:-
The money raised through IPO amounts to Rs.10897.74 million. Expenditure like
Development and Construction of Projects Specified for IPO – Rs.4534.51 million, IPO
Expenses including Advertisement – Rs.458.11 million and Expenses for post listing &
General Corporate Purposes – Rs.926.34 million was booked in these 3 quarters. The
balancing amount Rs.4978.78 million is invested in short term investments for reducing
bank overdrafts. Also 5 new subsidiaries were incorporated during last quarter i.e.
Dec‘07.
The sales have increase to 15% from 1 st Quarter to 3rd Quarter. Other Income in 3 rd
Quarter has increase tremendaiously from Rs.10.98 crores in 1 st Quarter to Rs.31.78
crores in 3rd Quarter.
104
RATIOS
CAPITAL
Year Ended 06-07 3614.53 24392.67 14.82
Year Ended 05-06 1477.65 4282.06 34.51
Year Ended 04-05 745.05 2180.69 34.17
RETURN ON EQUITY
Year Ended 06-07 2717.76 14626.8 18.58
Year Ended 05-06 1062.46 2011.51 52.82
Year Ended 04-05 656.65 1015.71 64.65
DEBT EQUITY RATIO

DEBT EQUITY
Year Ended 06-07 10090.00 14626.80 0.69
Year Ended 05-06 2350.70 2011.51 1.17
Year Ended 04-05 1207.00 1015.71 1.19
EARNING PER SHARE
YEAR EPS
BASIC
P/E RATIO
YEAR C .M. P EPS P/ E

FY 07 259 14.71 17.61
105
SHAREHOLDING PATTERN AS ON 31ST DECEMBER,2007
106
COMPLETED PROJECTS
Areas No. of Projects
RESIDENTIAL 12
COMMERCIAL 12
DMRC 7
31
TOTAL
 RESIDENTIAL
Projects are completed in Greater Noida, Noida, Gurgaon, Ghaziabad, and Mohan
Nagar.
 COMMERCIAL
Projects are completed in Faridabad, Noida, Moradabad, Saharanpur, Mohan Nagar,

Indirapuram, Greater Noida and Gurgaon.
 DELHI METRO RAIL CORPORATION (DMRC)
No. of Projects were 13 out of which, 7 got completed and the Total Leasable Area
2.31mn sq ft
of which, the Area Lease Period is 2.14mn. sq. ft. for 30 years and 0.17 mn. Sq. ft. for
12 years
7 Projects have been completed with leasable area of 3, 70,000 sq. ft.
Total leased area – 0.47 mn. sq. ft.

Total Cost – Rs. 922 Cr.
Cost per sq. ft. – Rs. 3356
Payback period 3 years after completion.
Annual lease rentals would reach Rs. 325 Cr. ($ 82 mn.) in FY 2011.
 HOTELS
Types No‟s
5 Star 9
4 Star 2
3 Star 5
Serviced Apartments 1
TOTAL 17
The No. of Rooms will be 2600 and Area will be 2.27mn.sq ft and for all this, capital
cost will be Rs.750 crore.
107
Status of Hotels
Locations Status
Mohali Construction Started
Chandigarh Film City Construction will start soon
Chandigarh IT Park Construction will start soon
Shirdi Construction Started
Jodhpur –1 Construction will start soon
Jodhpur – 2 Construction will start soon
Ahmedabad Construction Started
Hyderabad Construction Started
Goa Construction will start soon
Kochi Airport Construction will start soon
Kochi Beach Construction will start soon
Indore Construction will start soon
Ujjain Construction will start soon
Ranchi Construction will start soon
Lucknow Construction will start soon
New Delhi Construction will start soon
Bhiwadi Construction Started
Parsvnath Hotels Ltd. has signed an MOU with Fortune Park Hotels of ITC Welcome
group. Parsvnath and Fortune will develop 50 Hotels in the next 5 years, where
Parsvnath will own and develop the hotels and Fortune will Operate and market these
hotels. Under this agreement, twenty 5-Star, twenty 4-Star and ten Mid-Market Budget
Hotels, will be developed.
 MULTIPLEXES
Developing 114 Multiplex Screens all over India
Finalized the MOU with M/s Movietime Cineplex Pvt. Ltd. for leasing all our
Multiplex Screens in existing and future projects upto 100screens @ Rs. 48.50 per sq.
ft. with 15% increase every third year.
• The Screens are to be given on lease initially for a period of 9 years.

• 6 Screens are Operational.
• 34 Screens are under construction.
Estimated yearly rentals = Rs. 43 crore (10.9 US $ Mn.)
 SEZs
- 17 SEZs with developable area of 367.49 mn. sq.ft.

- Plans under formulation to start development work on already notified SEZs -
Gurgaon, Indore, Dehradun and Nandad, in next financial year.
- Signed LOIs with Govt. of Rajasthan and Govt. of Madhya Pradesh for
providing assistance and support for establishment of proposed Gems and
Jewellery SEZ at Jaipur and IT SEZ at Indore.
108
FORTHCOMING PROJECTS
Group Housing Projects
Parsvnath
- Pune
Premium
Parsvnath Royal
- Goa
Villas
Parsvnath
- Bhiwadi
Prominence
Project Located
- Uttarpradesh
at Noida
Projects Located
- Jammu & Kashmir
at Jammu
Project Located
- Jharkhand
at Ranchi
Project Located
- West Bengal
at Siligudi
Project Located
- Haryana
at Panipat
Project Located
- Gujarat
at Jam Nagar
Project Located at
- Uttarpradesh
Khekhra
Townships
Parsvnath Narain
- Jaipur
City
Parsvnath City - Malerkotla
Parsvnath City - Saharanpur
Parsvnath City - Rohtak
Royal Floors
- Lucknow
Parsvnath City
Parsvnath City - Kundli
Parsvnath City - Kurukshetra
Parsvnath City - Karnal
Commercial Projects
Parsvnath Mall - Amritsar

Parsvnath City
- Sonepat
Centre
Parsvnath City
- Sonepat
Mall
Parsvnath Mall - Kukatpally (Hyderabad)
109
Parsvnath City
- Amritsar
Mall
Parsvnath Mall - Chandigarh
Parsvnath Mall - Mumbai
Parsvnath Mall - Dwarka
Parsvnath Mall - Siligudi (West Bengal)
Parsvnath Mall - Ranchi (Jharkhand)
IT Parks
IT Park - Chennai
IT Park - Gurgaon
Hotels
Hotel I - Jodhpur
Hotel II - Jodhpur
Hotel - Seelampur, New Delhi
Rajiv Gandhi Chandigarh Technology Park,
Hotel -
Chandigarh
Hotel - Indore, Madhya Pradesh
Hotel - Lucknow, Uttar Pradesh
Hotel - Ujjain, Madhya Pradesh
Hotel - Goa
Hotel - Film City, Chandigarh
Hotel - Ranchi
Hotel - Cochin
Source: www.parsvnath.com
110
RECENT EVENTS
 Parsvnath Developers is looking at investing between Rs 20-25 billion for the

development of 40 more hotels. The company is in talks with leading domestic
and international hotel chains for tie-ups. The company intends to develop 100
properties acrossIndia.
 The company had announced a joint venture between its subsidiary Parsvnath
Hotels (PHL) and Royal Orchid Hotels (ROHL) to develop 10 hotel projects in
the next five years across India. The construction of the hotels would involve
an investment of Rs 5 billion spread across 3-5 years.PHL has signed a
memorandum of understanding with Fortune Park Hotels (FPHL), a wholly
owned subsidiary of ITC, to manage 50 hotels across India in the next three to
five years.
 Parsvnath Developers announced an investment of Rs 600 billion in next five

years in diversified areas such as SEZs, airports, express ways and retails
business.
 The company shall bid for upcoming airports such as Udaipur, Greater Noida,
Maharashtra and other states and will invest heavily in SEZs.
 Parsvnath is also believed to be in talks with two French majors Carrefour and
Club Casino to set up retail chains in India. The company owns over 14 million
square feet of land for retail business in 48 cities.
 Parsvnath Developers received a Letter of Intent (LoI) from director town and
country planning, Haryana to develop an IT Park project. The project is
expected to be Rs 6.5 billion within 2 financial years. IT Park is spread over an
area of 6.8 acres and is located in Sec - 48 in Gurgaon. The project sprawls
over a total build-up area of 8.5 Lac sq ft. and will showcase state of the art IT
Park giving boost to IT and ITES services in the area. The project has already
started and will be completed within next 24 months.
111
IV. HOUSING DEVELOPMENT & INFRASTRUCTURE
LTD(HDIL)
ABOUT THE COMPANY
HDIL is the part of the Wadhawan Group (formerly known as the Dheeraj Group),
which has been involved in real estate development in the Mumbai Metropolitan
Region for almost three decades. Since 1996, HDIL has been satisfying the diverse
needs of scores of home seekers in Mumbai Metropolitan region. There business
focuses on real estate development, including construction and development of
residential projects, commercial, retail and slum rehabilitation projects. HDIL provided
and still provides all services under one roof through tie-ups with banks and HFC‘s.
Today, HDIL has several projects underway in the Western and Eastern suburbs of
Mumbai, catering to the customer with varied needs and tastes.
Funds raised through IPO – Rs.14850.00 million and Funds raised through Green Shoe
Option - Rs.2136.00 million. The Total fund raised through IPO is Rs.16986 million.
The company got listed on 24 th July, 2007 at Rs.500 on BSE and NSE.
112
Analysis:-
The money raised through IPO amounts to Rs.16986 million. Expenditure like Issue
Expenses - Rs 893.80 million, Acquisition of land and land development rights - Rs
4108.00 million and
Construction of ongoing projects - Rs 4210.40 million. Balancing figure amounting to
Rs.7773.8 million is lying in Liquid Funds.
Sales have increase 11% from 1 st Quarter to 3rd Quarter. Other Income has also increase
tremendaiously from Rs.25.6 million to 198.9 million.
113
RATIOS

CAPITAL
Year Ended 06-07 6537.75 9361.71 69.83
Year Ended 05-06 1316.22 2675.89 49.19
Year Ended 04-05 321.10 1048.09 30.64
RETURN ON EQUITY
Year Ended 06-07 5418.13 7255.24 74.68
Year Ended 05-06 1139.20 1844.79 61.75
Year Ended 04-05 145.79 710.79 20.51
DEBT EQUITY RATIO

DEBT EQITY
Year Ended 06-07 913.85 7255.24 0.13
Year Ended 05-06 1964.64 1844.79 1.06
Year Ended 04-05 3756.85 710.79 5.29
EPS
YEAR EPS
BASIC
P/E RATIO
P/E Ratio cannot be calculated because the company got listed on 24 th July, 2007.
114
SHAREHOLDING PATTERN AS ON 31ST DECEMBER, 2007
115
COMPLETED PROJECTS
DheerajApartments
Jogeshwari (E), Mumbai, Maharashtra
RowHouseKandivali
Kandivali (E), Mumbai, Maharashtra
Sneh
Bandra (W), Mumbai, Maharashtra
Swapna
Arma
Bandra(E),Mumbai,Maharashtra
Type: Commercial
VasaiSEZ
Multi Service SEZ
PROJECTS IN PIPELINE
Affaire
Multiplex
Kandivali (E), Mumbai, Maharashtra
Harmony
Goregaon (W), Mumbai, Maharashtra
Dreams
Off LBS Marg, Bhandup (W), Maharashtra
Type: Residential
Dreams the Mall

Off LBS Marg, Bhandup (W), Maharashtra
Type: Commercial
116
Cyber City
Kalamasserry, Kochi
Type: IT Park
Developable size of 8.00 million sq ft with 5.5 million sq.ft for IT/ITES. Cyber City
will have 2.5 million sq ft of mixed usage developments which includes residential
apartments, retail shopping area, schools, villas and entertainment zones.
Source: www.hdil.com
MAJOR ACQUISITIONS/ANNOUNCEMENTS
 Housing Development & Infrastructure (HDIL) sold a commercial land in

Andheri (in the western suburb of Mumbai) to Mack Star Marketing, a private
company, for around Rs 9 billion.
 HDIL bagged the project under the slum rehabilitation scheme three years ago,
which had a total of one million sq. ft. of space with 0.5 million sq. ft. being a
part of slum rehabilitation and rest for the developer. HDIL, a part of the
Wadhawan group, has a land bank of 132 million sq. ft. in the Mumbai region.
 Housing Development and Infrastructure (HDIL) is planning to enter the
entertainment sector under the brand name Broadway. The investment will be
close to Rs. 10 billion to fund expansion in the country`s multiplex market. This
venture will offer films through its multiplexes and will have a range of gaming
centres with food court that will be managed by Broadway. HDIL will set up its
first Broadway theatre in Vasai, a Mumbai suburb. This will be followed with
the opening of the Broadway entertainment centre at Kandivali somewhere
around mid-January next year. The multiplex will have four screens by the end
of the current fiscal. The company plans to set up over 150 theatres in major
cities by the end of the fiscal 2009.
 HDIL has been awarded contract from MIAL (Mumbai International Airport
Limited).for Rehabilitation of approximately 85000 slum dwellers under
expansion and Modernisation of Mumbai airport.
 HDIL has been short listed for prestigious Dharavi Slum Rehabilitation projects
after technical evaluations. Lehman Brothers are financial partners to the
project.
 15 acres land acquisition in New Mumbai from Eveready. HDIL plans to set up
IT&ITES units with developable area of 2 million sq.ft.
 8.32 acres Land acquisition in Bhandup from Kilburn Engineering. HDIL plans
to set up IT& ITES units with developable area of 1.2 million sq.ft.
 169 acres of land acquisition in MMR (Palghar) to be used for Industrial and
plotted developments.
117
V. DLF
ABOUT THE COMPANY:
The DLF group is a leading real estate developer in India. The group has over 224
million sq. ft. of existing development and 748 million sq. ft. of planned projects. The
company has entered into several strategic alliances with global industry leaders.
Their core business traditionally has been into three prime divisions: Homes, Offices
and Shopping Malls. To these DLF has added three more divisions: Hotels,
Infrastructure and SEZs.
The company was listed on 5 July 2007at Rs. 2 per share on BSE and NSE. The IPO
was for Rs.90785.30 millions which has been utilized.
118
Analysis:-
The above figure shows that there has been an increase in the PAT in the second
quarter. Although the sales were same but there has been an increase in profit because
of decrease in interest expense and also there has been a tax refund in the September 07
quarter where the tax expense in the previous quarter was Rs.2952 millions.
In the third quarter there has been a decrease again owing to increase in tax expense to
Rs.2030 millions.
119
UTILISATION OF THE FUNDS:
The company came with an IPO worth Rs. 90785.30 million. This sum was utilized as:
Particulars Amount (Rs.

Millions)
Acquisition of land and development rights 56695.50
Development and construction cost for existing projects 6362.50
Prepayment of Loans 24697.50

Issue related Expenses 3029.80
Total 90785.30
120
RATIOS

Year Ended 06-07 7083.00 70633.00 10.03
Year Ended 05-06 4769.76 22615.45 21.09
Year Ended 04-05 1244.51 8432.08 14.76
RETURN ON EQUITY
Year Ended 06-07 4178.16 10633.00 39.29
Year Ended 05-06 2274.38 6449.31 35.27
Year Ended 04-05 677.06 3839.26 17.64
DEBT EQUITY RATIO

DEBT EQITY
Year Ended 06-07 67692.00 10633.00 6.37
Year Ended 05-06 30138.97 6449.31 4.67
Year Ended 04-05 6331.01 3839.26 1.65
EPS
No. of outstanding
YEAR PAT shares EPS
Year Ended 06-07 4178.16 1529.5 2.73
Year Ended 05-06 2274.38 188.84 12.04
Year Ended 04-05 677.06 17.54 38.60
121
122
PROJECTS COMPLETED:
1. DLF SILVER OAKS, GURGAON
Silver Oaks is located in a prime location of Phase I. It is a low-medium-and high-rise

apartment complex spread over 15 acres of land. There are over 600 apartments and 12
penthouse apartments ranging in size from 1,058 square feet to 2,100 square feet.
2. DLF BEVERLY PARK GURGAON
3. DLF REGENCY PARK
It is located in DLF Phase 4 in close proximity to DLF City Club and Shri Ram School.
It is a part of 24.645 acres group housing. Options include two bedroom, three bedroom
and five bedroom duplex penthouse apartments.
UPCOMING PROJECTS:
1. GARDEN CITY DLF, NEW INDORE

Garden city's 82 acres of pollution-free environs gives the residents a perfect answer to
beat their stressful lifestyle.
2. NEW TOWN HEIGHTS, DLF GURGAON
It is an excellent housing opportunity from DLF in the price range of Rs 45-75 Lakh
(approx), in the National Capital Region.
DLF‘s NEW TOWN HEIGHTS, a residential project in Sector-90 Gurgaon has a built-
up area between 1760 sq. ft. to 2505sq.ft.
3. NEW TOWN HEIGHTS, KOLKATTA
It is a premium residential condominium in Kolkata's most sought-after neighborhood,

Rajarhat.
‗New Town Heights‘ DLF Rajarhat offers 15 acres in various configurations, to cater to
individual requirements.
123
4. DLF RIVERSIDE, KOCHI:
It is located on the extensive 175 meter waterfront of the Chilavannoor River, ‗DLF
Riverside‘, spread over 5 acres, and almost floats on the backwaters.
5. DLF PARK PLACE, GURGAON:
6. THE BELAIRE, GURGAON:

Apartments in The Belaire are in the price range of Rs. 2.1 to Rs. 3.3 crores.
Source: www.dlf.in
RECENT UPDATES:
 DLF signed management agreements with Hilton Hotels

Corporation involving seven new hotel developments in the
pipeline. This makes the second phase in the DLF-Hilton JV
Company‘s overall strategic development plans to build and
develop 75 hotels in India in the next 5-7 years.
 CRISIL rates DLF at AA & P1+
 Citigroup, Merrill Lynch and DE Shaw may pump-in Rs 20
billion (USD 500 million) in the DLF Assets` (DAL) real estate
investment trust (REIT), part of the DLF group.
 D&G to set up retail outlet in 51:49 percent JV with DLF.
Source:
i. www.myiris.com
124
VI. OMAXE
ABOUT THE COMPANY
The company was originally set up as Omaxe Builders Private limited in 1989,
promoted by Mr. Rohtas Goel, The founder, to undertake construction & contracting
business. The company further changed its constitution to a limited company known as
Omaxe Construction Ltd., in 1999. The name of the company has now changed to
OMAXE LTD from 2006. The company began as a civil construction and contracting
company, has successfully executed more than 120 prestigious Industrial, Institutional,
Commercial, Residential and Hospital construction projects.
The company entered the Real Estate Development business in 2001 and in now
amongst the large Real Estate Development companies in India.
The company came with an IPO in the year 1999 worth Rs. 5516.92millions. The face
value of each share was Rs.2.
125
Analysis:-
We see that although the net profit has increased over the quarter, the Net Profit
margin has declined sharply.
UTILIZATION OF THE FUNDS:
The company came with an IPO worth Rs.5516.92millions and raised funds through
green shoe option worth Rs.253.27millions. Thus, total funds amounted to Rs.5770.19
millions. This was utilized in the following manner:
Particulars Amount (Rs. Millions)
Repayment of loans 1,500.00
Payment related to land 124.10
IPO expenses including advertisement 545.22
Development and construction cost of projects specified in the objects of the 114.00
issue
Total funds utilized up to September 30, 2007 2,283.32
Balance as at September 30, 2007 3,486.87
The unutilized funds as on September 30, 2007 have been temporarily invested in short term
liquid instruments.
126
RATIOS:

Year Ended 06-07 2461.00 22264.95 11.05
Year Ended 05-06 1857.43 20611.81 9.01
Year Ended 04-05 1652.63 7194.97 22.97
RETURN ON EQUITY
Year Ended 06-07 1218.00 9040.75 13.47
Year Ended 05-06 1247.98 8898.14 14.03
Year Ended 04-05 740.20 3529.84 20.97
DEBT EQUITY RATIO

DEBT EQITY
Year Ended 06-07 15510.60 9040.75 1.72
Year Ended 05-06 12978.39 8898.14 1.46
Year Ended 04-05 4256.82 3529.84 1.21
EPS
No. of outstanding
YEAR PAT shares EPS
Year Ended 06-07 1218 256 4.76
Year Ended 05-06 1247.98 256 4.87
Year Ended 04-05 740.2 229 3.23
127
PROJECTS:
The company in a short span of 5 years has completed and delivered 11 projects
consisting of 8 residential, 1 Integrated Township and 2 commercial covering approx
5.59 million sq. ft of area. The company currently has 54 projects under development.
These include 23 group housing projects, 16 integrated townships, 14 shopping malls
and commercial complexes and 1 hotel. The company is at present developing over 156
million sq ft of area across 31 towns in 10 states in Northern, Central India and
Southern India.
Source: www.omaxe.com
128
RECENT UPDATES:
 Omaxe wins Rs 12 bn contract from NRDA, Chhattisgarh. Omaxe has

won the bid from Naya Raipur Development Authority, Chhattisgarh for
development of Theme Township with 18 Hole Golf Course on over 400
acres (approx.) at Naya Raipur, Capital City of Chhattisgarh. The value
of the project is Rs 12 billion (approx.), which shall include the
development of residential and commercial buildings, golf villas and a
hotel.
 Omaxe inks MoU with Rajasthan for assisting in setting up of SEZ

.Omaxe announced that the company entered into a memorandum of
understanding (MoU) with the state of Rajasthan for assisting in setting
up of `Multi Product Special Economic Zone` at district Alwar in
Rajasthan. The MoU was inked on the occasion of Resurgent Rajasthan
Partnership Summit held on Nov. 30, 2007 at Jaipur.
The planned SEZ is, over 5,000 hectares (12,500 acres approx) of land
in the district of Alwar, Rajasthan. It is proposed to be set up in an
estimated period of 5 years and is expected to generate direct and
indirect employment for approximately 600,000 people in the Rajasthan.
Further, the company informed that it promoted a wholly owned
subsidiary by the name of Omaxe Rajasthan SEZ Developers. For this
the company has invested Rs 500,000. The above has been approved by
the government of India.
 Omaxe is proposing to invest Rs.80, 000 crore in next five years to build
I million affordable housing units in the country. Housing units will be
priced between Rs. 2.5 lakh to Rs.20 lakh over areas ranging from 300
to 1,200 sq.ft.
Source:
i. www.myiris.com
iii. Various newspapers and journals
129
VII. BRIGADE ENTERPRISE
ABOUT THE COMPANY

The company have completed total of 67 properties, comprising of 41 residential
properties, 21 commercial properties, aggregating to approximately 5.67 million sq.ft
of saleable area and approximately 6.74 million sq.ft of Developable Area.
Brigade Enterprise raised Rs.7456.15 million from IPO out of which Rs.6483.64
million is from Net IPO proceeds and Rs.972.55 million from Green Shoe Option. The
Company got listed on 31 st December, 2007 at Rs.390 on BSE and NSE.
We have information of only the 3rd Quarter that is OND‘07.
Net Sales of the company were Rs.1, 18.86 crores.
Profit after Tax was Rs.36.70 crore.
RATIOS

CAPITAL
Year Ended 06-07 1198.62 3859.81 31.05
Year Ended 05-06 503.43 1812.79 27.77
Year Ended 04-05 249.61 1519.26 16.43
RETURN ON EQUITY
Year Ended 06-07 729.04 1471.89 49.53
Year Ended 05-06 419.86 804.24 52.21
Year Ended 04-05 196.03 430.41 45.54
DEBT EQUITY RATIO

DEBT EQITY
Year Ended 06-07 2402.03 1471.89 1.63
Year Ended 05-06 1025.24 804.24 1.27
Year Ended 04-05 1092.70 430.41 2.54
130
EARNING PER SHARE (EPS)
YEAR EPS
BASIC
SHAREHOLDING PATTERN
Data Not Available
PROJECTS COMPLETED
Mainly they are into Residential and Commercial.
APARTMENTS IN
BENGALURU MYSORE
Brigade Classic Brigade Elegance
Brigade Coronet Brigade Parkway
Brigade Elite2 Brigade Regal
Brigade Gardenia Brigade Residency
Brigade Hallmark Brigade Retreat
Brigade Heritage Brigade Royal
Brigade HillView Brigade Tranquil
Brigade Jacaranda
Komarla Brigade
Residency
Brigade Lavelle
Brigade Legacy
Brigade Manor
Brigade Mayfair
Brigade Millennium
Brigade Nest
Brigade Orchid I&II
Brigade Palace
Brigade Park View
Brigade Rathna
Brigade Regency
Brigade Vintage
Brigade Vista
131
COMMERCIAL
BENGALURU
Brigade Chambers
Brigade Court
Hulkul-Brigade Centre
Brigade Links
Brigade Majestic
Brigade MLR Centre
Brigade MM
Brigade Plaza
Brigade Point
Brigade Seshamahal
Brigade Software Park
Brigade South Parade
Brigade Square
Brigade Terraces
Source: www.brigadegroup.com
RECENTS NEWS
 Brigade Enterprises Ltd has informed BSE that the Brigade Hospitality Services
Pvt Ltd, a 100% subsidiary of the Company, announced that they have signed a
management agreement with Sheraton Hotels and Resorts to manage a new-
build Sheraton Hotel in Mysore.
 Sheraton Mysore Hotel will be part of a 4 acre development that will include
commercial space, in addition to the hotel. The 220-room hotel will include
over 15,000 square feet of meeting space, four restaurants with an all day dining
outlets, lobby lounge and pub, a bar, health club, spa and business center.
 Partnership with Starwood Group for the development of the Sheraton Mysore
Hotel. Mysore being one of the prominent cities of Karnataka, promises
considerable growth potential in travel and tourism.
132
VIII. KOLTE – PATIL DEVELOPERS
ABOUT THE COMPANY

Kolte-Patil Developers Limited a Pune based real estate developer. Having 39.78
million sq.ft saleable areas out of which 92% is located in Pune while 8% is in
Bengaluru.
Amount raise from IPO proceeds is Rs.2755.43 million. The company got listed on 13 th
December, 2007 at Rs.145 on BSE and NSE.
We have only information of 3 rd Quarter that is OND‘07.
Net Sales of the company was Rs.127.35 crores.
Profit after Tax was Rs.35.7 crores.
RATIOS
CAPITAL
Year Ended 06-07 929.88 776.07 119.82
Year Ended 05-06 61.11 574.48 10.64
Year Ended 04-05 45.23 362.61 12.47
RETURN ON EQUITY
Year Ended 06-07 835.10 1802.49 46.33
Year Ended 05-06 28.02 185.3 15.12
Year Ended 04-05 24.25 160.4 15.12
DEBT EQUITY RATIO
DEBT EQITY
Year Ended 06-07 859.98 1802.49 0.48
Year Ended 05-06 718.55 185.30 3.88
Year Ended 04-05 228.70 160.40 1.43
133
YEAR EPS
BASIC
134
COMPLETED PROJECTS
Residential Projects in PUNE
Greenfields Maestros
Patil Regency Rose Parade
Patil Heritage Sovereign
Orchids Pink City
Precious Gem Lapis Lazuli
Ragdari – Conifer Mayur Pankh (residential and commercial)
Misty Moors Floriana Estate( residential and commercial)
Hills & Dales Green Acres (residential and commercial)
Residential Projects in BENGALURU
Projects Locations
Floriana Estate Koramangala
Surabhi Bannerghatta Road
Whispering Meadows RMV Extn.
Shubha Bannerghatta Road
IT Park in PUNE
Giga Space IT Park

E-Space
Residential Projects in PUNE
Projects Locations
Golden Towers PimpleNilakh
Kharadi Residential Kharadi
Residential Projects in BENGALURU
Projects
Hosur Road
Richmond Road
Koramangala
135
IT Spaces in PUNE
Hinjewadi
Bavdhan
Source: www.koltepatil.com
136
IX. AKRUTI CITY LTD
ABOUT THE COMPANY
Akruti City Limited (formerly known as Akruti Nirman Limited) is a leading real
estate developer in Mumbai city. The company is deeply committed to the city and
is involved in many projects that will fundamentally change the face of the city and
the lives of its citizens. Akruti‘s commitment is often called the ―3C‘s‖. A
commitment to the city, to its customers and to citizens. The numerous Slum
Redevelopment Projects that the company has undertaken best exemplify this
commitment.
The company is promoted by Mr.Hemant Shah – the Chairman, and a Civil

Engineer; and Mr. Vimal Shah, the Managing Director and a Chartered Accountant.
The company has been awarded the ISO 9001 certification. On the financial front,
the company has been awarded a real estate developer‘s rating of DA2 by CRISIL –
The Credit Rating Information Service of India. Akruti is the first in the industry to
receive this twin distinction. The DA2 rating reflects the professional management,
strong project management capabilities, well defined workflow processes, excellent
track record of completing projects on schedule and strong financial profile
The company got listed on 7 th February, 2007 at Rs.540 on BSE and NSE.
137
UTILISATION OF THE FUNDS

Details of utilisation of fund received from IPO of equity shares:-
(Rs in
millions)
Particulars Estimated Utilisation Actual Utilisation upto

Amount December,2007
- Acquisition of 1800 1800
Land/rights in land
- Repayment of Loan 570 570
- Development and 550 550
construction cost
- Expenses relating to IPO 310 310
- General corporate 390 390
purposes
3620 3620
138
RATIOS

CAPITAL
Year Ended 06-07 1027.76 7132.84 14.41
Year Ended 05-06 757.52 1714.71 44.18
Year Ended 04-05 315.49 1888.83 16.70
RETURN ON EQUITY
Year Ended 06-07 758.67 5018.3 15.12
Year Ended 05-06 630.68 1067.53 59.08
Year Ended 04-05 129.19 509.61 25.35
DEBT EQUITY RATIO

DEBT EQITY
Year Ended 06-07 2817.55 667.00 4.22
Year Ended 05-06 844.96 480.00 1.76
Year Ended 04-05 1454.14 20.00 72.71
YEAR EPS
BASIC
PRICE EARNING RATIO (P/E)

FY 07 405.85 11.37 35.68
139
140
COMPLETED PROJECTS
Residential
Name of the Project Location

Akruti Aditi Jogeshwari (E),Mumbai
Akruti Aditya Grant Road (W),Mumbai
Akruti Niharika Andheri (W),Mumbai
Sai Akruti Bandra (E),Mumbai
Akruti Aneri Andheri (E),Mumbai
Akruti Astha Walkeshwar,Mumbai
Akruti Classic Mulund (E),Mumbai
Akruti Laxmi Dadar T.T,Mumbai
Akruti Erica Vile Parle (E),Mumbai
Akruti Elegance Mulund (E),Mumbai
Akruti Orchid Park Andheri (E),Mumbai
Akruti Lake Woods Thane (E),Mumbai
Commercial & IT

Akruti Softech Park Andheri (E),Mumbai
Akruti Centre Point MIDC,Andheri (E)
Akruti Orion Vile Parle (E),Mumbai
Akruti Arcade Andheri (W),Mumbai
Akruti Business Port Andheri (E),Mumbai
Akruti Trade Centre Mumbai
Commercial & IT

Akruti Topaz Bandra (E),Mumbai
Akruti Corporate Park Kanjurmarg (W),Mumbai
Akruti Trade Point Jogeshwari (E),Mumbai
DLF Akruti Infotech Park Pune
IRIS Andheri (E),Mumbai
Akruti Star Andheri (E),Mumbai
Akruti Sapphire Andheri (E),Mumbai
Retail

Akruti SMC MSRTC,Thane (W)
Akruti City World Thane (W)
Akruti Elite Plaza Mahalakshmi
Source: www.akruticity.com
141
X. IVR PRIME
ABOUT THE COMPANY
IVR Prime Urban Developers Ltd. was established as the Urban Development arm of
the hugely successful and renowned infrastructure giant IVRCL Infrastructures &
Projects Ltd.
IVR Prime has the backing of IVRCL Infrastructures & Projects Ltd, a profit making,
dividend paying, Rs. 2500 Cr (US $625 million) turnover Company, listed on the
Indian Stock Exchanges Since year 1995.
The company went public in August 2007. It came with IPO worth Rs.7782.5million.
Analysis:-
We see that with the increase in sales there has been an increase in the profits and the Net profit
margin also. This shows that the company is able to minimize its cost while expanding its sales.
142
UTILISATION OF THE FUNDS:
The company came with an IPO worth Rs. 7782.50million. It has been utilized in the following
manner:
Particulars` Amount (Rs. Millions)

Repayment of loan to parent company 1471.80
Repayment of loan to Karnataka Bank Ltd 419.67
Repayment of Development right costs 857.06
Development and construction cost of projects 369.52
General corporate purposes 1164.45
143
RATIOS:

Year Ended 06-07 375.43 3953.83 9.50
Year Ended 05-06 135.41 1158.58 11.69
Year Ended 04-05 12.18 1376.93 0.88
RETURN ON EQUITY
Year Ended 06-07 230.16 798.91 28.81
Year Ended 05-06 102.78 483.94 21.24
Year Ended 04-05 -1.48 281.03 LOSS
DEBT EQUITY RATIO

DEBT EQITY
Year Ended 06-07 3155.91 798.91 3.95
Year Ended 05-06 675.14 483.94 1.40
Year Ended 04-05 1095.90 281.03 3.90
EPS
No. of outstanding
YEAR PAT shares EPS
Year Ended 06-07 230.16 50 4.60
Year Ended 05-06 102.78 40 2.57
Year Ended 04-05 -1.48 30 LOSS
144
RECENT UPDATES:
 IVR Prime Urban Developers is planning to set up mini resorts of 100 to
125 rooms each in 10 locations across the country at an estimated cost
of Rs 5 billion.
It plans to have a 1,000-room hospitality business in a few years down
the line. It has tied-up with Compass Hospitality, Singapore, for
operating the resorts.
IVR Prime has already acquired the land for building the resorts at
Hyderabad, Pune, Bangalore, Chennai, Delhi, Dehradun, Pondicherry,
Baddi (Himachal Pradesh) and Visakhapatnam. The company will be
setting up two resorts each in Chennai and Delhi. IVR Prime`s main
areas of operation include residential projects, commercial projects and
integrated townships. It has a land reserve of around 2,850 acres in Tier
I cities including Chennai, Hyderabad, Pune, Bangalore, Visakhapatnam
and Noida.
Source:
i. www.myiris.com
145
XI. ORBIT
ABOUT THE COMPANY
Under the Aggarwals' tutelage, Orbit Corporation Limited continues to fulfill its
mission to build unique, modern and high quality living and working spaces The
promoters, through their various ventures have developed properties spanning over 1.5
million square feet worth several hundred crores, in the prime areas of South Mumbai
like Babulnath, Tardeo, Worli, Prabhadevi, Gamdevi.
The Company has extensive expertise in redevelopment projects in South Mumbai.

The company came with an IPO in April 2007 worth Rs.1001.00 Million. The face
value of each share was Rs. 10.
146
Analysis:-
We see that as the profit is increasing, the Net Profit margin also increases for the first
two quarters but in the last quarter, where the sales have surged up to approximately
twice its value in the earlier quarter, the NP margin has come down. This is because of
the rise in expenses by around thrice of the earlier quarter.
UTILIZATION OF THE FUNDS:
The company came with an IPO worth Rs.1001.00million of which only Rs. 747.40 million
was utilized for the following purposes:
Particulars Proposed amount Utilized

(Rs. Millions) amount(Rs.
Millions)
Advances towards Acquisition of New Project 500.00 500.00
Project Development Cost for the current 422.81 205.00
projects and investment in wholly owned
subsidiaries for projects developed by subsidiaries
IPO Issue Expenses 78.19 42.40
Total 1001.00 747.40
147
RATIOS:

Year Ended 06-07 88.68 1452.79 6.10
Year Ended 05-06 2.35 715.47 0.33
Year Ended 04-05 44.62 132.73 33.62
RETURN ON EQUITY
Year Ended 06-07 77.71 1524.16 5.10
Year Ended 05-06 0.92 984.88 0.09
Year Ended 04-05 28.55 150.35 18.99
DEBT EQUITY RATIO

DEBT EQITY
Year Ended 06-07 213.68 1524.16 0.14
Year Ended 05-06 15.65 984.88 0.02
Year Ended 04-05 34.40 150.35 0.23
EPS
No. of outstanding
YEAR PAT shares EPS
Year Ended 06-07 77.71 27.17 2.86
Year Ended 05-06 0.92 21.60 0.04
Year Ended 04-05 28.55 11.00 2.60
148
149
PROJECTS:
COMPLETED PROJECTS:
Shivam
Babulnath
Pujit Plaza
Jindal Enclave
The Angel
Daulat Bhavan
ONGOING PROJECTS:
Residential
Orbit Heights, Tardeo Road

Villa Orb, Napeansea Road
Orbit Arya, Napeansea Road
Orbit Eternia, Lower Parel
Orbit Enclave, Prarthana Samaj
Commercial
Orbit WTC Bandra Kurla Complex

JSW House, Lower Parel
Orbit Plaza, Bandra Kurla Complex (Kalina)
FUTURE PROJECTS:
Orbit Haven, Napeansea Road

Orbit Grand I & II, Lower Parel
Source: www.orbitcorp.com
150
RECENT UPDATES:
 15% second interim dividend:

 Orbit Corporation net rises 10.58 times in Dec`07 qtr. Orbit
Corporation disclosed a phenomenal jump in net profit for the quarter
ended December 2007. During the quarter, the company experienced a
10.58 times rise in profit to Rs 196.18 million from Rs 18.54 million in
the quarter ended September 2007. Net sales for the quarter rose 5.54
times to Rs 725.61 million compared with Rs 131.09 million in the
previous quarter.
Total income rose 5.42 times to Rs 739.19 million for the quarter-ended
December 2007 from Rs 136.48 million for the quarter ended September
2007.
Source:
i. www.myiris.com
151
XII. INDIA BULLS REAL ESTATE
152
RATIOS

Year Ended 06-07 57.45 3733.41 1.54
RETURN ON EQUITY

Year Ended 06-07 131.14 5432.05 2.41
DEBT EQUITY RATIO
DEBT EQITY
Year Ended 06-07 2971.65 5432.05 0.55
YEAR EPS
BASIC
PRICE EARNING RATIO (P/E RATIO)

FY 07 298.1 0.729873382 408.43
153
154
COMPLETED PROJECTS
 JUPITER MILLS – COMMERCIAL
Covering an area of 10 acres , comprise 2 towers of 16 storeys and 2 of 14
storeys it will include a large central landscaped plaza, fine dining restaurants,
food courts, club house and recreation areas and also world class corporate
offices.
 RAIGARH SEZ
It is a multi – product SEZ with an area of 6,000 acres which is divided into
2,100 acres of industrial processing area, 900 acres of commercial area, 1,500
acres of residential area and 1,500 acres of open spaces.
 GOA LUXURY RESORT
The resort is developed on a property over 21 acres along the Vagator Beach at
Goa.
 NASHIK SEZ
It is also a multi – product SEZ admeasuring 3,000 acres which is divided into
1,050 acres of industrial area, 750 acres of residential area, 450 acres of
commercial area, 300 acres dedicated to green spaces and 450 acres for road
and amenities.
 THANE SEZ
It is also a multi – product SEZ spans over 6,000 acres in Thane district,
Maharashtra. It will consist of captive power plant, water filtration plant,
warehousing & cold storage facilities and an International Business Center.
 CHENNAI HOUSING
It is a 50 acre site for an exclusive housing enclave in Chennai. Out of 50 acres,
16 acres have already been acquired.
 CHENNAI TOWNSHIP
It is a property spread over 241 acres for commercial & residential
development.
 MUMBAI TOWNSHIP
It is an integrated township development in Panvel spans over 600 acres which
is located along the Mumbai – Pune expressway. Out of these 600 acres, 240
acres will be for residential purpose and 150 acres will be parks and open
spaces; industrial and commercial areas, roads and amenities will be 30 acres,
60 acres & 120 acres respectively.
155
 ELPHINSTONE MILLS
It is located on 7.76 acres of land in Lower Parel, in close proximity to the
Jupiter Mills site.
It is design for Corporate Offices and it will also have restaurant are , food court
area, club house area and parking spaces for 3,000 car parks .
Construction is likely to complete by September 2008.
 SONEPAT TOWNSHIP
It is a residential and commercial project near Delhi, spread over 150 acres.
Housing project will comprise of 108.87 cares, 6 prime commercial lots
aggregating 24.85 acres and an Info – Tech Park entailing 16.88 acres.
Work is likely to complete in phases over next three years.
 CASTLEWOOD
It is located adjacent to prime residential of South Delhi comprising of 3,500
houses for slum dwellers over 35.8 acres of land.
Project is likely to complete by June 2008.
 GURGAON HOUSING
It is located in NCR, Delhi covering a total area of 1.97 million sq.ft.
Consisting 1.35 million sq.ft residential and .62 million sq.ft commercial.
Project is likely to complete by June 2010.
Source: www.indiabulls.com/realestate
156
RECENT NEWS
 India bulls has acquire 9% stake in Piramyd retail an Ashok Piramal group for
Rs.208 crore.
 India bulls Real estate‘s subsidiary, India bulls Power Generation receives LoI
for Bhaiyathan TPP project in Chhattisgarh by Chhattisgarh State Electricity
Board (CSEB). CSEB had invited bids for procurement of power produced on
long term basis for the project comprising building, owning, operating,
maintaining of a coal fired thermal power project at Bhaiyathan in Chhattisgarh.
The project includes development of captive coal mines containing proven
reserves of 349 million tons in Chhattisgarh to provide low cost coal supply to
the power project.
 Global investor George Soros acquired 2.5% stake in India bulls Real Estate at
about Rs 2.76 billion. Soros` hedge fund Quantum acquired over 6 million India
bulls Real Estate shares through open market transactions on Tuesday at about
Rs 455.8 a share. There has been no dilution of promotes stake as the
transaction involved an exchange of stakes between Quantum and Morgan
Stanley.
 India bulls Real Estate, have purchase 100% of the ordinary shares in Dev
Property Development, an Isle of Man registered company listed on the London
Stock Exchange`s AIM.IBREL will issue new shares in the form of GDRs (to
be listed on the Luxembourg Stock Exchange`s Euro MTF). It is offering
0.12091 of a global depository receipt for each share of London-listed Dev
Property. India bulls have valued Dev Property at around Rs 11 billion.
157
7. COMPETITION:
Herfindahl Index
Michael Porter Analysis
PEST Analysis
Peer Comparison
HERFINDAHL INDEX
It measures industry concentration. It is arrived as under:
HI = ∑ (Market Share of each player)2
•For a pure monopoly it will come 10000.
•Where there are only two players with equal market share the index value shall stand as 5000.
•Lesser the concentration lesser is the Index Value i.e. if there are 100 players each having 1%
market share the Index value shall come as 100.
HERFINDAHL INDEX FOR REAL ESTATE COMPANIES
MARKET
COMPANIES SALES* SHARE HI
UNITECH 24417.35 24 563
HCC 23576.2 23 525
PDL 12361.36 12 144
HDIL 12034.48 12 137
DLF 11335 11 121
OMAXE 9408.84 9.14 84
BRIGADE ENT. 3781.7 4 14
KOLTE PATIL DEVELOPERS 2293.68 2 5
AKRUTI NIRMAN CITY 1778.88 2 3
IVR PRIME 1477.62 1 2
ORBIT CORPORATION 308.89 0.30 0.09
INDIA BULLS REAL ESTATE 133.25 0.13 0.02
102907.25 1597
* Sales as on 31st March, 2007 in million.
158
Value of Herfindahl index for Indian Real Estate Companies is 1597
It implies moderate concentration of pricing power and competition in the

Industry. The major players in the Realty segment are Unitech, HCC, PDL, HDIL, DLF
& OMAXE holding 24%, 23%, 12%, 12%, 11% and 9% respectively.
159
MICHAEL PORTER ANALYSIS
The Michael Porter‟s five forces model is as follows:
The figure is self explanatory.
It says that an industry, and an individual company, profitability and the intensity of
competition in an industry are a function of five competitive forces as presented in the
model above.
160
The Michael Porter‟s analysis for the Realty Industry can be done as follows:
Threat Of New Entrant: High
Large untapped market segment

Not so highly regulated market
Bargaining Power Of Suppliers: High

• Land etc. Not easily available
Competitive Rivalry: High
• Competition hots up in RESIDENTIAL as well as COMMERCIAL

sector
Bargaining Power Of Buyers: Low
Customers do not have much market knowledge
Threat Of Substitute: Low
• No alternative option In Residential sector

• Commercial sector have the ball in their court
161
PEST ANALYSIS
POLITICAL FACTORS
In Political factors we have to look at following factors
1. How stable is the political environment?

2. Will government policy influence laws that regulate?
3. What is government’s policy on the economy?
4. Does the government have view on culture and religion?
5. Is the government involved in trading agreements such as EU,NAFTA, ASEAN, or
others?
ECONOMIC FCATORS
In Economic factors we have to look at following factors
1. Interest rates
2. The level of inflation Employment level per capita
3. Long – term prospects for the economy Gross Domestic Product (GDP) per capita,
and so on.
SOCIOCLUTURAL FACTORS
In Sociocultural factors we have to look at following factors
1. What is dominant religion?

2. What are attitudes of foreign products and services?
3. Does language impact upon the diffusion of products onto markets?
4. What are the roles of men and women within society?
5. How long are the population living? Are the older generations wealthy?
6. Do the population have a strong/weak opinion on green issues?
162
7. Long – term prospects for the economy Gross Domestic Product (GDP) per capita,
and so on.
TECHNOLOGICAL FACTORS
In Technological factors we have to look at following factors
1. Does technology allow for products and services to be made more cheaply and to
a better standard of quality?
2. Do the technologies offer consumers and businesses more innovative products
and services such as Internet banking, new generation mobile telephones, etc?
3. How is distribution changed by new technologies?
4. Does technology offer companies a new way to communicate with consumers?
PEST ANALYSIS ON REALTY SECTOR
POLITICAL FACTORS
Property Tax.
Launch of Real Estate Mutual Funds (REMFs)
100% FDI is permitted in hotels and tourism as well as real estate
Government working on Revenue Sharing Model
ECONOMIC FACTORS
Housing Loan bracket to be increase from Rs.20 lakhs to Rs.30 lakhs

EMI Facility which help people to purchase house easily.
SOCIOCULTURAL FACTORS
Developers are building Slum Rehab Projects .Recently Omaxe announce to invest
Rs.200 crore in slum rehab projects.
Disposable income of people increases.
NRI investing In India Real estate.
Youngsters are looking for luxury houses with facilities like Gym, Swimming pool and
many more.
TECHNOLOGICAL FACTORS
Websites like www.magicbricks.com, www.makkan.com,www.99acres.com and many

more helping an individual and organization to find places allover the world by just
one click.
Indian Real estate firm hiring foreign architects
163
PEER COMPARISON:
Last Market
Price* Cap* Sales (Rs. EBITDA Net Income Return of Return on
MN.) (Rs. MN.) (Rs. MN.) Equity (%) Assets (%) P/E (%)
COMPANY (Rs.) (Rs. MN.) (2007) (2007) (2007) (2007) (2007) (2007)
Parsvnath
Developer
s 224.85 421,400 12361.36 3614.53 4874.46 18.58 8.32 17.6
HDIL 731.95 1,554,600 12034.48 6537.75 12065.09 69.83 28.28 NA
India Bulls
Real
Estate 555 1,268,300 133.25 57.45 133.25 2.41 1 408.43
Brigade
Enterprise 197.95 214,100 3781.7 1198.62 3897.78 49.53 10 NA
Kolte Patil
Developer
s 109.75 83,600 2293.68 929.88 2319.57 46.33 15.6 NA
Akruti City 1100.3 735,900 1778.88 1027.76 1788.79 15.12 8.78 35.68
DLF 668.15 11,503,500 11335 7083 11348 39.29 4.19 NA
HCC 125.3 336,400 23576.2 2461 23832.1 13.47 3.55 18.82
Unitech 288.85 4,621,000 24417.35 13956.79 24515.99 84.72 10.91 31.97
Omaxe 231.3 407,000 9408.84 2096.7 9413.14 13.47 6.98 NA
Orbit
Corporati
on 490.4 174,600 308.89 88.68 314.96 5.1 1.79 NA
IVR Prime 221.6 146,100 1477.62 375.43 1478.01 28.81 2.15 NA
*data as on 25/04/08
164
8. MARKET PERFORMANCE:
RELATIVE PERFORMANCE
In this relative performance we have shown the comparison of Sensex with Realty
Sector.
Analysis:-
On January 1, 2008 the realty index of BSE was quoted at 13,037.89 points and it
tumbled to 7,554.80 points, a fall of 5,483.09 points or 42.05 %, as on March 31, 2008.
165
IPO RATES:
Company F.V Issue Listed on BSE 52 Week Today Gain / Loss From
Name
Re. Price List Date List Close High Low Close Issue Price List Close
AKRUTI
CITY LTD 10 540 7/2/2007 564 1,399.00 322 1,103.35 104.32% 95.63%
BRIGADE
ENTERPRISE
S LTD 10 390 31/12/2007 378.55 428 151 190.75 -51.09% -49.61%
DLF LTD(2) 2 525 5/7/2007 570.05 1,225.00 505.6 674.75 28.52% 18.37%
HOUSING
DEVELOP
INFRA
(HDIL) 10 500 24/07/2007 558.6 1,432.00 473.5 725.55 45.11% 29.89%
INDIABUL
REAL(2) 2 SCHEME 23/03/2007 325.65 847.8 300 526.6 _ 61.71%
IVR PRIME
URBAN 10 550 16/08/2007 418.15 509.9 152.2 227.75 -58.59% -45.53%
KOLTE-
PATIL
DEVELOPER
S LTD 10 145 13/12/2007 181.45 272 75.25 111.05 -23.41% -38.80%
OMAXE LTD 10 310 9/8/2007 349.95 613 180 234.5 -24.35% -32.99%
ORBIT
CORPORATI
ON 10 110 12/4/2007 127.95 1,079.95 156 481.5 337.73% 276.32%
PARSVNATH 10 300 30/11/2006 526.3

598 170.2 228.15 -23.95% -56.65%
Source: - www.sptulsian.com
166
9. KEY HIGHLIGHTS OF METROS:
MUMBAI
 Residential prices are still moving up. There is a yawning gap between what
most consumers can pay and what developers are asking for.
 There is a slowdown in some pockets in suburbs such as Andheri and
Ghatkopar. While prices haven‘t fallen, sales volume are slowing down.
 Demand for office space has slowed down.
 Though fresh retail space got added in 2007, affordability remains a key issue.
Retailers say that it will be difficult to make decent margins at current rentals.
NCR
 In some pockets, especially south Delhi, residential prices will stay firm.
Suburbs like Noida and Gurgaon could see a softening. Add-ons like free
furniture and furnishings will be commonplace.
 The drop in prices of apartments in Gurgaon and Noida is sharper than that of
those in the city. In some south Delhi localities, even rentals have come down.
 Rentals for high street retail will continue to rise due to paucity of supply and a
lack of legally compliant buildings. Expect major correction in mall rentals due
to oversupply.
BANGALORE
 Builders are offering 10-15% cash discounts as property registration dropped

45% in 2007-08.
 In 2007, an estimated 26000 homes were sold against 33500 in 2006.
 Commercial property prices are holding firm; 12 million sq. ft of commercial
space was transacted in 2007 as compared to 11 million sq. ft in 2006.
CHENNAI
 Residential prices are stagnating, and deals for luxury apartments are being
sweetened with offers such as free car parking.
 The drop in prices of apartments in suburbs is sharper than that of those in the
city.
 There is a strong demand for office space from non-IT companies in the city but
supply is negligible, and as a result rentals are expected to rise.
 No retail space was added in 2007, which means rentals are likely to go up this
year.
167
HYDERABAD
 Residential prices are stagnating at the moment and deals for luxury apartments
are being sweetened with offers such as modular kitchens.
 Demand for office space from IT companies is stagnant. However there is
limited supply as well. So, prices are unlikely to fall and rentals are expected to
remain stagnant.
 During 2007, no new malls came up in the city, but fresh space is likely this
year. Rentals are however, expected to appreciate till end of 2008 due to limited
supply.
KOLKATA
 Residential and commercial prices are more or less stable. There has not been
any major correction, because prices had not risen astronomically as in other
metros.
 In case of luxury apartments and bungalows, freebies like parking spaces and
gardens are being offered.
 The stock of properties (residential, commercial or retail) remains modest and
stable, compared to other cities.
 Substantial demand is being generated by players like call centre operators,
insurance companies, information processing outfits, restaurants and retailers.
 Large developers like DLF, Unitech and Reit-Eden are making their presence
felt in the suburban areas of Kolkata.
168
10. SYNTHESIS:
Indian Real Estate Industry has witnessed immense growth in the past couple of
years.
The main reasons for its growth were easy access to funds, FDI been allowed
and the phenomenal increase in the real estate demand.
The ever increasing momentum has paved the way for exciting opportunities for
both domestic as well as international investors.
Going forward, we expect the Indian Real Estate market to witness greater
mergers and acquisitions (M&A) driven by consolidation and growing maturity
of the market.
But the demand for luxury homes etc. would come down because the property
prices have escalated 40-45% whilst the salary levels have grown by 14-15%
only. So now these companies can concentrate on providing residence to the
middle and lower middle income group. Although the margins may be low but
the boom in the realty sector has left this area untouched and hence profits can
be generated out of this area.
The commercial area is giving the profits and will continue to do so for some
more time.
169
V. APPENDICES
 Calculation of Excel Sheets
VI. REFERENCES
 Newspapers
 The Economic Times
- “New hotels may be built on revenue share model” dated
3 April, 2008
- “Multiple FDI projects may bring relief to Realty players”
dated 1 April ,2008
- ET REALTY edition
o 1 May,2008
o 17 April,2008
o 3 April,2008
 Mint
- “Lack of takers puts pressure on luxury home prices in
metros” dated 3 April,2008
 Articles
 Realty stocks to face tough times: Citigroup
 Magazines and Books
 Business Times – 18 May,2008
 Money Life- 24 April,2008
 Corporate India-15 April,2008
 Capital Market
 Indian Stock Market – Sandipa Lahiri Anand
 100 World Famous Stock Market Technique – Richard Maturi
 Fundamentals of Investing – Gordan J. Alexandar & Jaffery V.
Bailey.
 Investing in Real Estate – Andrew Mclean & Gary W. Eldred
170
 Prospectus and Annual Report
 Kernex Microsystems- Annual Report (31st March, 2007)
 Reliance Power- DRHP
 DLF- DRHP
 Parsvnath Developers- DRHP
 Websites
 www.sptulsian.com
 www.bseindia.com
 www.nseindia.com
 www.moneycontrol.com
 www.myiris.com
 Various company sites
171
VII. GLOSSARY
Bid – An indication to make an offer during the Bidding period by a

prospective investor to subscribe for or purchase the company‘s equity share at
a price within the price band, including all revision and modifications there to.
BRLM – Book Running Lead Managers
CAGR – Compound Annual Growth Rate
CMP- Current Market Price
DRHP – Draft Red Herring Prospectus
EBITDA- Earning Before Interest, Tax, Depreciation and Amortization
Face Value - The value printed on the face of a stock, bond, or other financial
instrument or document
FDI – Foreign Direct Investment
FII - Foreign Institutional Investors
FY – Fiscal or Financial Year
HNI- High Network Individual
IPO – Initial Public Offering
M&A- Mergers and Acquisitions
Market Capitalisation - Market Capitalization or "market cap" is a measure of
a company's size and financial strength. It consists of a company's global assets
less it's liabilities. The valuation, if it's a public company, ebbs and flows
depending on what the marketplace thinks the company are worth. The
calculation is the company's share price multiplied by the number of shares in
issue.
Market Value - The current quoted price at which investors buy or sell a share
of common stock or a bond at a given time is known as "market price". The
market capitalization plus the market value of debt. Sometimes referred to as
"total market value".
NII – Non Institutional Investors that are not QIB or Retail Investors and have
bid for an amount more than Rs.1, 00,000.
OPM- Operating Profit Margin
Q1- Quarter 1, i.e. April, May, June
Q2- Quarter 2, i.e. July, August, September
Q3- Quarter 3, i.e. October, November, December
Q4- Quarter 4, i.e. January, February, March
QIB – Qualified Institutional Buyers
QoQ- Quarter on Quarter i.e. March,2008(Q4) in comparison with
March,2007(Q4)
Relative Market Index- Comparison of the Company‘s share price with the
Sensex during the same period
Retail Investors – Investors (including HUF) who have bid for equity shares of
an amount less than or equal to Rs.1,00,000
172
SEZ – Special Economic Zone
Tier I – Cities in India with a population exceeding 5 million. Cities like
Bangalore, Delhi & Mumbai.
Tier II – Cities in India with a population between 2 to 5 million. Cities like
Ahmedabad,Chandigarh,Hyderabad,Indore,Kolkata,Nagpur & Pune
Tier III – Cities in India with a population less than 2 million. Cities like
Ghaziabad, Jaipur &Kochi
YOY- Year on Year i.e. 2008 in comparison with 2007
173

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EQUITY RESEARCH

BY WAY OF FUNDAMENTAL ANALYSIS

FACULTY GUIDE: COMPANY GUIDE: PURVA SOMANI

A report submitted in partial fulfillment of

Milestones achieved in the journey of life are never achieved alone,

I am very grateful to my Company Guide, Mr. S.P.Tulsian who

I am highly indebted to my Mother for her moral support and

I would also like to express my gratitude to my friends and colleagues

Particulars Page No.

List of Illustrations iii

1.4. Company Profile 10

II. Union Budget Analysis 12

III. Company Analysis 16

3.1 Kernex Microsystems 17

3.2 Reliance Power IPO 40

3.3 India Glycols 61

IV. Industry Analysis 76

VI. References 170

VII. Glossary 172

Particulars Page No Particulars Page No

Management 20 Global Scenario 23

Product & 21 Sales & Growth 24

Operating Profit 26 Cost structure 25

Financial 27 Operating Profit 26

Particulars Page No Particulars Page No

Issue Details 46 Gap between 44

Objects of Issue 47 Energy 45

Utilisation of 48 Electric peak 45

IPO Details 50 Bid details 51

Listing Details 52 Share price 53

Particulars Page No Particulars Page No

Management 62 Sales & Growth 65

Products & 63 Cost Structure 66

Ratio 69 Operating Profit 67

Particulars Page No Particulars Page No

Commercial 86 Demand Drivers 81

Ratios 105 Financial 104

Ratios 114 Financial 113

Ratios 121 Financial 119

Ratios 127 Financial 126

Ratios 133 Shareholding 134

Ratios 139 Financial 138

Ratios 144 Financial 142

INDIA BULLS REAL ESTATE

Ratios 153 Financial 152

Herfindahl Index 158 Michael Porter 160

Michael Porter 161

Peer Comparison 164

IPO Rates 166 Relative Index 165

Premium Investment runs website www.premiuminvestment.in which

During the tenure of my internship I have worked upon the Railway

We have analysed the “Realty Industry” under which we have covered

To name some DLF, Parsvnath Developers, Unitech, HCC, Akruti city

RELIANCE POWER IPO

The internal environment includes:

The financial performance

The external environment includes:

EQUITY RESEARCH can be done by two methods:

Here we look at balance sheet, income statement etc. to determine a

Technical traders study the price movements of the particular company's

Fundamental Analysis is a conservative and non-speculative approach based on the

A brief glimpse of each of these factors is explained below: