Commanding a staggering market capitalization of Rs 61 lakh crore at the Bombay Stock Exchange (BSE), the Indian real estate builders have come a long way. Most importantly, this volume of market capitalization is formed out of the 14 top-listed real estate companies only, and the muscle of the sector is quite strong given the fact that about 300 real estate builders are listed on the exchange.
Interestingly, the market capitalization of Indian real estate sector is expected to rise in a phenomenon way, according to investment institutions. As per BSE reports, the current share of real estate sector at BSE is about 5 per cent, which is much below than the global norms of 15 per cent. Now that Indian stock markets are no way less than its global counterparts like Dow Jones, FTSE, Kospi, Nikkie, and Hang Seng, it is a globally acknowledged view that Indian real estate sector, with all its potential and growth dynamics, is set to expand its base in the financial markets.
Real estate: investors' dream land
As far as investment prospects are concerned, the Realty Index managed to clock returns of as much as 46.84 per cent in the past year. The index, which hovers around the levels of 10,500 today, was recorded at 7,218 in February 05, 2007. And thus it is not surprising, Indian real estate has emerged up as one of the most favourite sectors for investors today.
However, investing in Indian real estate companies has become too tricky in the volatile market conditions in the past three quarters. The Realty Index has shown variation of more than 100 per cent between August 2007 and February 2008. The index, which reached the peak of 13,848 on January 08, 2008 was seen at an all time low of 6,485 on Aug 22, 2007. A period of just five months!
Updates on Indian real estate:
. Initial Public Offering (IPO) on the anvil: Emaar MGF.
Price band per equity share is Rs 610-690. Issue starts on Feb' 01, 2008 and closes on Feb' 06, 2008.
. Indian real estate companies that form BSE Real Estate Index: DLF, Unitech, Omaxe, Parsvnath, Sobha Developers, Ansal Infrastructure, Puravankara, Mahindra, Indiabulls, Phoenix, Anant Raj, Penland and Housing Development Corporation.
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