Thursday, January 31, 2008

Emaar MGF IPO - Analysis

Emaar MGF Land, a joint venture between one of the world’s leading real estate companies, Emaar Properties PJSC of Dubai, and MGF Development Limited of India, has fixed the price band between Rs. 540 and Rs. 630 per equity share of Rs. 10 each. The issue will open on February 1, 2008 and close on February 6, 2008.

As disclosed in the Red Herring Prospectus, the issue proceeds will be used for part payment towards the acquisition of land and land development rights and related approvals for its ongoing and planned projects, the development and construction costs for project Palm Drive in Gurgaon and repayment of loans.

Emaar MGF is a good IPO and we would recommend investors to invest in this IPO, especially since the company has reduced the earlier price band of Rs. 610 - Rs. 690 to Rs. 540 - Rs. 630. The company has refixed the price considering the prevailing market sentiments and the developments in the financial markets in India and globally. So, the investors should definately go for this IPO. We expect good response from investors for this IPO and hence there will be oversubscription. But we also recommend the investors to take listing gains and invest instead in DLF which is available at a much cheaper price compared to Emaar MGF.

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