Realty Stocks rising high on SEBI, RBI relaxing fundraising rules; Index gains 45% in one year.

By: |
Published: April 7, 2017 2:19:51 PM

Real estate stocks are on a surge for the last one year and have returned stellar gains despite the sharp dip following demonetisation in November, with the major shares up as much as 45% from a year ago.

DLF has risen 37% over the last one year to Rs 156.4, while Sobha Ltd. has risen 45% to Rs 403.15; Delta Corp has risen massively 132% to Rs 184.95.

Real estate stocks are on a surge for the last one year and have returned stellar gains despite the sharp dip following demonetisation in November, with the major shares up as much as 45% from a year ago.

The rally in the real estate stocks has been supported by the markets regulators’ decisions regarding investment and management of Real Estate Investment Trusts (REITs), which has effectively made it easier for the sector to raise funds and boost the availability of money for developing projects.

DLF has risen 37% over the last one year to Rs 156.4, while Sobha Ltd. has risen 45% to Rs 403.15; Delta Corp has risen massively 132% to Rs 184.95; Prestige Estates Projects Ltd today made a 52 weeks high of Rs 235.3, has risen 34%; Godrej Properties today made an all-time high of Rs 453 has risen 43%. Nifty Realty Index has risen 45% in one year, and today made a new 52-week high of 230.6 points.

Nifty Realty Index has risen 45% in one year, and today made a new 52-week high of 230.6 points.

The realty sector is rallying on the increased interest from the investors since earlier last year, as the capital markets regulator Securities and Exchange Board of India (SEBI) in July 2016 relaxed the rules for REITs and foreign fund managers to relocate to India. Further, it allowed REITs to invest larger corpus in under construction assets, raising the limit from 10% to 20%. SEBI also proposed to raise the number of REIT sponsors and relaxed norms on clearing third party transactions.

You may watch:

Later in December, SEBI issued guidelines allowing REITs to go for the public issue with the help of a group of merchant bankers and fund managers. The move enabled them to raise more funds to invest in infrastructure and construction.

Earlier yesterday, the sector got yet another big boost, with the Reserve Bank of India allowing the commercial banks to invest in REITs and Infrastructure Investment Trusts (InvITs), paving the way for huge capital inflow into the cash-strapped sector.

In November, Indian realty sector was drastically hit due to the demonetisation and sudden replacement of currency as the Real Estate sector is heavily dependent on cash transactions, which froze due to unavailability of cash. However, realty stocks have recovered all the post-demonetisation loss and risen further since the beginning of this year.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1Gold hits 5-month peak after Donald Trump launches missile strike on Syria
2Australia, NZ dollars tumble vs yen after US missile strikes on Syria
3Asian stocks skid, safe-haven assets jump as US strikes Syria