Indian Real estate giant, DLF Universal’s IPO hit the markets on June 11 2007 and will close for subscription on June 14 2007. The DLF IPO issue, initially scheduled for June 2006 faced a lot of hiccups. Minority investors alleged that the company cheated them. DLF managed to settle this issue and then filed a new prospectus with SEBI. SEBI’s approval for the same was received earlier this month. With rising interest rates, the construction and real estate sectors, which are both highly capital intensive and have a high debt equity ratio, have clearly been affected. However, Investment banking sources close to the DLF IPO issue say that the DLF issue is expected to be priced between Rs. 550 and Rs. 600 a share. The face value of DLF universal’s shares is Rs.2 and as per SEBI guidelines the IPO issue cannot be priced less than Rs. 500 per share. After the IPO, DLF Universal’s promoter KP Singh’s 87.5% stake in DLF Universal, will put him high up among the list of richest Indians. Will it make those who invest in the DLF IPO also rich? That’s exactly what millions of Indian investors are hoping. History stands testimony to the fact that mega IPO issues are usually less risky and reward investors with decent listing gains on the day of listing. Lets wait and watch the performance of India’s biggest/largest IPO. When DLF UNIVERSAL lists on the stock exchanges in the first week of July (probable listing date) it would cause a change in the SENSEX and NIFTY compositions and will make it to the Index heavyweights list. DLF will list both on the NSE and the BSE and will be eligible for trading in the Futures and Options segment. For the DLF IPO allotment status, listing date, subscription details, IPO refund date and all updates relating to DLF IPO issue, do check this space regularly.

DLF IPO LOT SIZE

DLF Universal has fixed the lot size for the IPO. The DLF IPO lot size is 10 shares. Retail Investors applying in the DLF IPO can apply for a minimum of 10 shares or a maximum of 180 shares.

DLF IPO opens for Subscription on June 11, 2007 and closes for Subscription on June 14, 2007
DLF IPO Price Band has been fixed between Rs. 500 (floor Price) and Rs. 550 (Cap Price)

DLF IPO Payment Option for Retail Investors

Retail investors [those investing in the stock market (primary market) for less than Rs. 1 lakh] can bid on the DLF IPO on payment of Rs 150 per share of which Re 1 will be credited to face value of DLF shares and Rs 149 towards premium on application. The balance amount will be payable on due date. QIB investors will have to pay 10 per cent of the bid amount and the balance before allotment.

This means if you apply for less than Rs 1 lakh in the DLF IPO, then you need to pay only Rs. 150 per share and not Rs. 550 per share. The balance amount needs to be paid after you get the DLF shares alloted. Its likely that you won’t have to pay the balance amount since the DLF IPO issue is likely to be oversubscribed by atleast 4 times. The balance amount will be adjusted against the refund amount.

Lets take a hypothetical situation
Lets assume you apply for 150 shares in the DLF IPO at cut off
In normal circumstances you would have to pay Rs. 82,500 (150 * 550), but now you will have to pay only Rs. 22,500 (150 * 150). Now if the issue gets oversubscribed by 4 times, you will get an allotment of 37 DLF shares for which you will have to pay (37*550) = Rs. 20,350. This will be adjusted against the Rs. 22,500 you paid while applying for the DLF IPO and you will get a refund of Rs. 2,150.

For more details on the DLF IPO also read DLF IPO NEWS