DIVIDEND PAYING PATTERN IN REAL ESTATE INDUSTRY

GROUP NO.4 ADITI UPADHYAY 99/08 ANIMESH SHARMA 37/08 DILEEP V 129/08 SIDDHARTHA SHARMA 127/08 TWISHMAY PANDEY 121/08

MARKET OVERVIEW
Real estate industry is currently estimated to be US$ 16 billion with a CAGR of 30% Total economic value estimated to be US$ 40-45 billion accounting for 4-5% of the GDP (Source: UBS Investment Research) Growth driven primarily by IT/ITeS, growing presence of foreign businesses in India, the globalization of Indian corporates, and the rapidly increasing consumer class providing a huge market potential

CONTD
The real estate sector is in an early growth stage, can be segmented into residential, commercial, retail and hospitality asset classes Demand-supply gap across all segments for quality real estate Source: Industry Sources, E&Y Analysis

MARKET STRUCTURE
Commercial Office Space Dominated by a few large national developers with pan-India presence Regional players are expanding to achieve a Pan-India presence Shift in the type of operations from Sale Model to Lease & Maintain Model

CONTD .
Residential Space Highly fragmented and unorganized Regional players are expanding to achieve a PanIndia presence Retail space Dominated by unorganised retail Large corporate houses entering the organized retail sector International retail brands are tying up with Indian partners

Hospitality Space Entry of several corporate houses such as Reliance Existing hotel operators are scaling up their operations

Factors influencing Dividend Policy decision of all sectors collectively

Shareholding pattern Debt structure and interest payments Liquidity position Investment Opportunity Shareholders expectations

Key decisions
Preferences of shareholders: dividend or capital gains. Financial needs of the company. Constraints on paying dividends. Should the company follow a stable dividend policy? What should be the form of dividend?

UNITECH

SHAREHOLDING PATTERN
PROMOTERS PUBLIC INVESTMENT INSTITUTIONAL NON-INST.: COMPANIES INDIVIDUALS 3. OTHERS 1. 2. 74.56% 8.62% 8.57% 8.08% 0.19%

 2007-08
Payment of Rs.0.25 per share(12.5% of Rs.2). The Company issued 81,16,87,500 equity shares of Rs 2 each as bonus shares in the ratio of 1:1.

2006-07
Payment of Rs.0.25 per share(12.5% of Rs.2). The Company issued 81,16,87,500 equity shares of Rs 2 each as bonus shares in the ratio of 1:1.

 2005-06
Payment of dividend of 10% on equity.

2004-05
Payment of dividend of 40% on equity.

2003-04
Payment of dividend of 30% on equity.

FIGURES IN ABSOLUTE VALUES

YEAR 2007-08 2006-07 2005-06 2004-05 2003-04 DIVIDEND (IN MILLIONS) 405.84 405.84 162.34 49.95 37.46

60

50

40

30

NPR OPR

20

10

0 2007-08 2006-07 2005-06 2004-05 2003-04

DPR
25

20

15

DPR 10

0 2007-08 2006-07 2005-06 2004-05 2003-04

 We see a considerable fall in the DPR of the company. This fall is mainly due to the increase in the share capital of the company. The company has reduced the cash dividend per share but has given bonus shares in the ratio of 1:1. Possible reasons for the some are: 1. Increase in the future investment opportunities. 2. Shareholders preference for capital gains in place of cash dividends.

OMAXE

SHAREHOLDING PATTERN
PROMOTERS PUBLIC INVESTMENT INSTITUTIONAL NON-INST.: COMPANIES INDIVIDUALS 3. OTHERS 1. 2. 89.28% 2.87% 3.30% 4.15% 0.40%

DPR
16 14

12

10

8 DPR 6

0 2007-08 2006-07 2005-06 2004-05 2003-04

40

35

30

25

20 NPR 15 OPR 10

0 2007-08 2006-07 2005-06 2004-05 2003-04

 Considerable increase in the revenue and the profits(NP & OP) of the company. The company is paying almost stable dividend. Also, the company has been able to maintain a stable dividend payout ratio. Year 2005-06 was the only exception when the DPR of the company was 2.89%. One of the reason for this was the upswing in the real estate industry at that particular time period. In that period increased its retained profit ratio in order to increase its investment.

DLF

EPS
50 45 40 35 30 25 EPS 20 15 10 5 0 2007-08 2006-07 2005-06 2004-05 2003-04

DPR
50 45 40 35 30 25 DPR 20 15 10 5 0 2007-08 2006-07 2005-06 2004-05 2003-04

SHAREHOLDING PATTERN
PROMOTERS PUBLIC INVESTMENT INSTITUTIONAL NON-INST.: COMPANIES INDIVIDUALS 3. OTHERS 1. 2. 88.26% 7.30% 0.85% 3.43% 0.16%

 DLF has been paying a 100% dividend on its equity share capital over the past few years. In last year, the company paid 200% dividend on its share capital, 100% being interim dividend and the remaining 100% as final dividend. However, DPR has fallen over the years. This is so because the profits are increasing at a high rate and the dividend is being paid at a constant ratio.

GMR

SHAREHOLDING PATTERN
PROMOTERS PUBLIC INVESTMENT INSTITUTIONAL NON-INST.: COMPANIES INDIVIDUALS 3. OTHERS 1. 2. 73.28% 18.14% 2.64% 5.52% 0.42%

16

14

13.44

12 10.92 10.37 10

EPS DPR

4 2.364 2 2.54 2.67 1.11 1.33 1.23 0.69

0 2003-04 2004-05 2005-06 2006-07 2007-08

 Considerable fall in the DPR of the company. Slight fall in the EPS of the company. There has been a considerable fall in the cash dividends paid by the company. Company is implementing several new projects through its subsidiaries and also actively scanning the global horizon for emerging opportunities. This is the reason why the company has reduced its cash dividends.

CONCLUSION
The complementing growth in the economy, especially the IT players and the manufacturing sector, encouraged developers to cater more to the high end segment. In the past two to three months, the sales have come down by half. Cancellations from clients who had lost money in the market.