Veritas report says DLF overpriced, stock starts falling
Shares of DLF, the Delhi-based real estate major, fell 5% on Friday as a fallout of a research report by Toronto-based Veritas Investment Research that said DLF shares are worth only Rs 100. DLF's scrip closed at Rs 204 on the Bombay Stock Exchange on Friday.
Veritas had earlier issued similar reports criticising the now-beleaguered Kingfisher Airlines and debt-laden Reliance Communications.
Veritas, in its report "A Crumbling Edifice" calls DLF as "an organisation under duress". It goes on to say that the balance sheet of the company is stretched to the limit. "We do not believe the disclosed book equity and asset base of the company," the report added.The report said DLF is "scrambling to consummate assets sales, rationalise its land bank and divest non-core operations within five years of a much-publicised IPO in May 2007 at a price of R525 per share."
DLF has, however, dismissed the report as "presumptive and mischievous". "The company adheres to the highest standards of corporate governance and financial integrity and the audited financials of the company are always in the public domain," said the company spokesperson.
Further, as a response to the Veritas report, the ministry of corporate affairs has ordered an inspection of the account books of DLF. "We have asked for a scrutiny of DLF account books," a senior official in the ministry of corporate affairs said.
During October-December quarter, net profit of the company plunged 45% to Rs 258 crore.