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Stock market investors should be aware of the working of listed real estate entities and understand the cyclical nature of the industry, said Mohit Goel, Chief Executive Officer, Omaxe.
Goel was responding to queries on why the stock price of the company (now trading at about a third of its listing price) had failed to attract investors despite the company clocking strong growth over the years.
Listed in 2007 at an issue price of Rs 310, the IPO to raise Rs 550 crore was oversubscribed over 35 times. The IPO received bids for 63.09 crore shares against 1.77 crore shares put on offer. Omaxe today is present in 30 cities with 42 projects in pipeline.
On September 27, 2013, Omaxe offer for sale to comply with SEBI’s minimum public shareholding norm of 25 per cent failed to attract the required subscription for just 1.525 crore shares.
The company received bids for about 42.3 lakh shares or 27.74 per cent of the offer size. The OFS (offer for sale) floor price was Rs 135 a share.
On Friday, the company stock closed at Rs 138.90 on the BSE.
Turnover of the company rose about two and half times over the last six years to about Rs 2078 crore in FY 13. Net profit, however, declined to Rs 106 crore from Rs 121 crore in the same period. Dividend payout was Rs 0.70 a share in August 2013, prior to which it was Rs 2.50 a share in 2008.
Another ofs
Omaxe is planning another OFS this month to offload about six per cent of its promoter holding to comply with SEBI norms of minimum public shareholding. As of June 7, 2013, the promoter holding in the company stood at 83.79 per cent.
However, investor interest in the 18 township properties the company launched has been high. Goel said about 95 per cent of investors who come in during the initial phase exit later to end users.
Goel said the markets in 2007 were vastly different from today in terms of valuations, though the Sensex is around 20,000 now. On margins, Goel said it was about 15-20 per cent in both tier-2 and -3 cities as well as in Delhi, the only metro where the company operates.
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