DLF plunges on poor results; partner opts out of group company DLF Assets

Indian estate major DLF has come a long way since its blockbuster IPO in 2007. After losing much of its market value over the last year, its shares plunged nearly 14 per cent on Monday, on the back of poor results coupled with weakness in the broad market mainly contributed by the realty sector. The stock closed at Rs153, down 13.88 per cent.

DLF's net profit has dipped 70.6 per cent to Rs1.78 billion (Rs178 crore) for the quarter ended 31 December, as compared to Rs6.05 billion (Rs605 crore) in the corresponding period last year. Total income was down 62.29 per cent to Rs.6.83 billion (Rs683 crore) till Dec 31 as compared to Rs18.12 billion (Rs1,812 crore) in the year-ago period, the company said in a regulatory statement.

Consolidated net profit for the group decreased 68.72 per cent to Rs6.7 billion (Rs670 crore) for the quarter ended 31 December from Rs21.44 billion (Rs2,144 crore) in the corresponding period last year. Consolidated net income was also lower for the period under review at Rs15.02 billion (Rs1,502 crore) compared to the earlier Rs36.51 billion (Rs3,651 crore).

In an unrelated development, one of the two investment funds - US-based DE Shaw and UK-based Symphony Capital - who have put in money in DLF Assets (a privately held firm floated by the promoters of DLF), is looking at exiting its investments, DLF vice chairman Rajiv Singh told analysts in a conference call on Monday.

DE Shaw and Symphony Capital have investments of around $400 million and $650 million respectively in DLF Assets (DAL), a company that buys IT SEZs developed by DLF.

"One of the two investors (DE Shaw or Symphony Capital) is looking at exiting DAL either at the time of listing or before that," Singh said, without naming the investor citing non-disclosure agreement. He added that the promoters are considering an IPO for DAL, but it could be contingent on market scenario and would occur only later next fiscal. DAL's plan to list as real estate investment trust on the Singapore stock exchange in 2008 was put off following the global economic turmoil.

Hedge fund DE Shaw, which invested $400 million in DAL in 2007, is widely believed to be the fund looking to pull out of DAL. But this could not be independently confirmed. Lehman Brothers, which had earlier invested $200 million in DAL, has already exited in the July-September quarter. Lehman sold its investment to an existing investor Symphony Capital, which had invested $450 million in early 2008.