DLF stock roiled on Sebi ban, closes 28.56% lower

DLF Ltd shares fell to a record low on Tuesday, wiping out $1.2 billion in market value, after Securities and Exchange Board of India (Sebi) banned the property firm from capital markets and raised investor concerns about how it will service its debt.

DLF, whose shares slumped as much as 28.56 per cent in Mumbai, may be forced to sell assets to pay down its debt that reached Rs 19,100 crore ($3.13 billion) at end-June, analysts say. DLF 's debt has been a longstanding investor concern, and it will not be the first time the company is offloading non-core assets.

The ruling by Sebi on Monday marks the latest regulatory threat to the property developer, which is facing a probe from the antitrust watchdog and is also at the centre of a political controversy over sweetheart land deals in Haryana.

"DLF's inability to access capital markets could impact its fund-raising program, both at the listed company level and potential listing of its commercial assets such as Real Estate Investment Trusts (REITs)," Macquarie research said. "DLF, in this case, would have to resort to large asset sales to reduce debt in the future."

Macquarie has put its "outperform" rating on the company's stock on review, it wrote in a note on Tuesday.

DLF shares ended down 28.56 per cent at Rs 104.95, underperforming a 0.26 per cent fall in the broader Nifty.

The ban follows what Sebi said was DLF's failure to provide key information on subsidiaries and pending legal cases at the time of its record-breaking 2007 initial public offering.

Barclays cut its price target on DLF shares to Rs 159 from Rs 222, citing the latest regulatory headwind for the company.

(Reuters)