Indiabulls Real Estate surges 9% as board mulls share buyback

Shares of Indiabulls Real Estate have surged 9% to Rs 202 per share on the BSE in early morning trade in otherwise weak market after the Mumbai-based real estate developer said that its board will meet on Friday, May 18, 2018, to consider the proposal of buy-back of equity shares of the company.
“A meeting of the Board of Directors of the Company will be held on Friday, May 18, 2018, to consider, inter alia, the proposal of Buy-back of equity shares of the Company,” Indiabulls Real Estate said in a BSE filing on Tuesday after market hours.

The primary objective of a share buyback programme is to arrest the fall in the value of a stock by reducing the supply of the stock, which essentially pushes up the share price through a better P/E multiple. The other objective is to improve earnings per share (since the same dividend amount is now distributed among fewer shares).

In past three months, Indiabulls Real Estate had underperformed the market by falling 18% as compared to 4% rise in the S&P BSE Sensex till yesterday. In past one year, the stock was up 7% against 17% rally in the benchmark index.

At 10:33 am; Indiabulls Real Estate was up 8% at Rs 201, against 0.66% decline in the Sensex. A combined 8.61 million shares changed hands on the counter on the BSE and NSE so far.

Realty index hits 6-year high; Godrej Properties, Oberoi Realty at new high

STOCK MARKET - Shares of real estate companies were on a roll with the Nifty Realty index hitting an over six-year high after a strong rally in Godrej Properties, Indiabulls Real Estate and DLF on the National Stock Exchange (NSE).

At 01:25 PM; Nifty Realty index was up 3.8% at 316, its highest level since April 25, 2011, the largest gainer among sectoral indices. On comparison, Nifty 50 index was up 1% at 10,440. The S&P BSE Realty index too up 4% at 2,398, against 1.2% rise in the S&P BSE Sensex.

Godrej Properties, Indiabulls Real Estate and DLF from the Nifty Realty index were up in the range of 4% to 8% on the NSE. The non-index stocks such as Hubtown, Dilip Buildcon, Ansal Buildwell, Emami Infrastructure and Simplex Realty were up 5% to 9% on the BSE.

Oberoi Realty hit a new high of Rs 509 on the NSE in intra-day trade. In past three month the stock rallied 27% against 3% rise in the benchmark index. The company had posted 25% year on year growth in its consolidated net profit of Rs 104 crore in Q2FY18.

“With the onset of Real Estate (Regulatory and Development) Act or RERA and Goods and Service Tax (GST), we are already witnessing an increase in customer confidence and an improved market sentiment. We believe that credible players are likely to gain ground and unorganised players will be pushed out and we will witness consolidation in the sector,” Vikas Oberoi, chairman & managing director of Oberoi Realty said while announcing Q2FY18 results.

According to analyst at Edelweiss Securities, the key uncertainties (RERA & GST) appear to have largely settled. Despite near‐term sluggishness, analyst expect uptick in residential new sales in ensuing quarters across key markets.

Indiabulls Real Estate slips 7% post huge block deals

Indiabulls Real Estate dipped 7% to Rs 232 in intra-day on BSE after more than eight percentage points of total equity of real estate developer changed hands in multiple block deals.

At 10:36 am, the stock was trading 5% lower at Rs 238 on BSE and NSE. A combined 41.89 million shares representing 8.8% of total equity of Indiabulls Real Estate have changed hands on both the exchanges, data shows.

The name of the buyers and sellers were not ascertained immediately.

The promoter group entity IBREL IBL Scheme Trust had sold its entire of 8.99% in the company through open market in past two months.

“IBREL IBL Scheme Trust, of which Indiabulls Real Estate (the Company) is the sole beneficiary, has sold 33 million shares or 6.99% stake of the Company, on 22nd June 2017 at the stock exchanges, and has realised approx. Rs 662.83 crore at an average price of about Rs 200.85 per share,” Indiabulls Real Estate had said in a BSE filing.

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