Promoter Plan to Un­lock Value for DLF

The Economic Times - - Smart -

ET In­tel­li­gence Group: The de­ci­sion of DLF’s pro­mot­ers to sell their 40% stake in the rental arm busi­ness, DLF Cy­berCi­tyDevel­op­ment(DCCDL),has po­ten­tial to un­lock value for the listed com­pany DLF. But given the past track record, when the sale of the com­pany’s some of the other as­sets dragged be­yond ex­pected time, a crit­i­cal task will be to sell the stake at the ear­li­est even if it has to com­pro­mise on the val­u­a­tion. DLF pro­mot­ers have de­manded a val­u­a­tion of ₹ 13,000 crore for the 40% stake. This works out to an en­ter­prise value (EV) of ₹ 41,000 crore af­ter con­sid­er­ing the debt of around ₹ 8,500 crore. DCCDL’s an­nual rent in­come is over ₹ 2,500 crore. It means the rent yield (rent in­come di­vided by EV) for po­ten­tial in­vestors will be 6%.

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