Why SEBI Penalized DLF
Securities and Exchange Board of India (SEBI) recently announced decision to penalize DLF for withholding vital information during its IPO in year 2007, there by de barring its top 6 promoters from tapping the financial market and access to fresh funds. What this means in nutshell is that DLF will find it very hard to convince Bankers, Fund Managers, HNI Investors to take any further exposure in its products. Because of high interest rate on existing debt of 19000Cr on its books, roll over to a cheaper vendor was planned by DLF, which not could be in jeopardy because of reluctance of vendors.
Securities and Exchange Board of India (SEBI) recently announced decision to penalize DLF for withholding vital information during its IPO in year 2007, there by de barring its top 6 promoters from tapping the financial market and access to fresh funds. What this means in nutshell is that DLF will find it very hard to convince Bankers, Fund Managers, HNI Investors to take any further exposure in its products. Because of high interest rate on existing debt of 19000Cr on its books, roll over to a cheaper vendor was planned by DLF, which not could be in jeopardy because of reluctance of vendors.
Buyers Getting
Affected
Buyers of under construction projects of DLF especially in
mega townships like Capital Greens in Moti Nagar, New Delhi, DLF Camellias on
Golf Course Extension Road, Gurgaon, DLF Woodland Heights in Bangalore could
now have to wait much longer than earlier estimates before the possession is
handed over. With one sided builder buyer agreements favoring the developer
completely, any chance of delayed penalty is hopeless so as the CRM teams whose
only target is to pacify agitated buyers with whatever hopes. After investing
one’s life savings, taking legal route proves to be too risky because of
backlash from developer.
Road Ahead
The legal understanding between Law (SEBI) and DLF has become too complicated because of shift in political equation at center, that any hews and cries of actual buyers could go un-heard for a while. Wise decision at this juncture would be to re-invest in a safer ready to move in apartment and negate the risk of delayed possession by exiting the current investment in DLF, hopefully at whatever current premium if one is lucky. If this does not prove suitable for any reason, existing investors need to dig deep and prepare for long haul as currently happening with buyers of properties in Unitech Developers.
The legal understanding between Law (SEBI) and DLF has become too complicated because of shift in political equation at center, that any hews and cries of actual buyers could go un-heard for a while. Wise decision at this juncture would be to re-invest in a safer ready to move in apartment and negate the risk of delayed possession by exiting the current investment in DLF, hopefully at whatever current premium if one is lucky. If this does not prove suitable for any reason, existing investors need to dig deep and prepare for long haul as currently happening with buyers of properties in Unitech Developers.
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