Angel Broking:
Our fair NAV for GPL (based on its existing land bank) works out to Rs469/share. Around 50% of the NAV is derived from its township project in Ahmedabad.We believe that the IPO is fairly priced and keep a Neutral view on it. However, investors can look at alternate, existing listed players like Anant Raj, which have a debt-free balance sheet, land at prime locations and is trading at a significant discount to our one-year forward NAV.
Stock will quote at a discount to its Fair Value like any other realty stock.
And here is Sharekhan's View
In terms of valuations, on a very quick estimate basis, the net asset value (NAV) for the company works out to Rs547 per share which is marginally higher than the offer price. Currently not many real estate companies trade at premium to their NAV. On an enterprise value/sq ft basis, the valuation comes to Rs740-795 per sq ft on the lower and the upper price band.
Sharekhan Research is getting Worse by the day. We will stop quoting them if they continue their biased approach looting Indian retail invetsors hard earned money.
Edelweiss Capital's Views
We have discounted GP’s cash flow from 50.2 mn sq ft (company’s economic interest in 82.7 mn sq ft) over 12 years and discounted it with WACC of 12.2%. Our NAV for GP stands at INR 463-468/share, which does not take into account any upside possible from: (1) any potential development of land owned by the parent company (not mentioned in the offer document); and (2) successful execution of MoUs (185 acres) which are currently in nascent stages. We believe the stock is fully priced in at the lower end of the price band of INR 490-530/share. Also, we have assumed company’s township project at Ahmedabad and IT SEZ at Hyderabad to be fully developed and sold by FY20 and FY16, respectively. However, being large scale development, these projects run execution risk and any delays in these projects could hamper valuation considerably. We recommend ‘DO NOT SUBSCRIBE’ to investors as there appear to be limited/no upsides.
