4Q)Evaluate DLF as an IPO candidate from various stake holders point of view?

key stake holders of DLF are: share holders, financial institutions, employees and property
buyers.
Share holders: the company first raised from primary market and got listed in BSE in 1975 and
in DSE in 1976. But it later got delisted from BSE in 1982, due to increase in listing fees, and
from DSE in 2003 as they admitted the violation of SEBI regulation 1997. On may 12, 2006
again DLF filed for IPO to raise US$ 2.2bn. but they didnt address the investors concern of
uncertainty .
When they filed for IPO for second time they also missed the minority shareholders issue i.e.,the
company had made rights issue of debentures but had omitted to post the offer letter to the
minority investors. But later on they got back to address this problem when they revised the
DRHP, the company announced that it would take share holders approval for issuing debentures
to minority shareholders.
DLF developed 3000 acres in Gurgaon for the reputed global brands like GE, Nestle, Pepsi Co,
British Airways etc. thus DLF turned the Gurgaon into a huge commercial club. DLF was
mainly into Home, Office and Shopping. From 2002 to 2006 it registered an increase in its net
worth a CAGR of 14.2% and in its net income increased at a CAGR of 25.5% . it has huge land
reserves of 10,255 acres, comprised of developed area of approximately 574mn sq feet.
DLF built considerable brand equity by delivering its propositions to its customers. Now the
company decided to develop a pan-india presence and thus pursued opportunities in new
business segments like hotels, infrastructure and SEZs. In order to facilitate its entry into new
segments, DLF formed strategic alliances with leading firms like Hilton Hotels, Laing O
Rourke, Nakheel etc.
Through IPO DLF intends to raise US$2.2 bn out of which US$1300 mn will be utilized for land
acquisition and US$620 mn will be used to complete the construction of some ongoing projects.
Financial institutions: DLF has secured loans and internal accruals for its operations from
various financial institutions. By November 2006, the company had secured and unsecured
loans of more than US$1800 mn on its balance sheet, mostly raised on a floating rate of interest ,
at an average rate of 9.5%. out of US$2.2 bn DLF intends to clear US$800 mn.
Employees : since DLF is in growth mode i.e, thinking of pan india presence , also is in
diversifying mode i.e., venturing into construction of hotels , providing infrastructure and
developing SEZs they need more skilled and un-skilled labour. Thus providing more
employement opportunities across india. Thus promoting economic growth.
Property buyers: They earned the considerable reputation in delivering the properties with
clear title heads. They build homes for super-luxury, luxury and mid-income segments and it
also promoted the concept of walking to work. They adopted the strategy of selling and leasing
in the shopping and office segment. Now they acquired expertise and experience through joint
ventures the property owning from DLF will be more hassle free and more customer friendly