Real Estate Intelligence Service, Tuesday, December 22, 2009

India Inc calls for land-use reform

India Inc calls for land-use reform
The Financial Express, December 22, 2009, Page 1

fe Bureau, Mumbai

In the Indian reform story, policies on land have been the least reformed, said Ratan Tata on Monday. The chairman of the Tata group, whose company Tata Motors had to shift the production base for its Nano small car from Singur in West Bengal to Sanand in Gujarat following crippling protests over land acquisition for the project, said political leaders must strike a balance in deciding whether land is needed for agriculture or for industry.

Speaking at the TiE Entrepreneurial Summit 2009, Tata said, “Land is a hot issue and it is going to impact projects.” Tata Motors had already pumped Rs 1,500 crore into the Singur facility and many of its vendors had set up base there before the project site was abandoned.

“More often than not, conflicts related to land are promoted by individuals who do not belong to that area, but who have other political motives. Leaders need to define and reconcile between cultivated land and industrial land, because agriculture also needs to be efficient. There should be no long-term detriment to the land owner,” he added.

Tata was participating in the inaugural session of the TiE Summit, along with Infosys Technologies chairman & chief mentor NR Narayana Murthy. Moderator for the session, Indian Express Group editor-in chief Shekhar Gupta, posed to them the question, whether land was the least reformed sector in India.

Agreeing with him, Tata said land reforms would create more jobs and take India to the next level of growth. “Given that India wants to create job opportunities for not-so-educated people, it has to be in the non-technology sectors like manufacturing, where we need a lot of land,” he said.

Murthy, in turn, also stressed the need for more land to do business in the country. In urban areas for instance, Murthy said, "India needs to improve its floor-area ratio from the current 1:1 to 1:15.”

Defining the Singur experience as sad and inevitable, Tata said, “A lot of infrastructure projects are impacted due to the conflict of personal interests. Industry faces several issues on land, and these come from individuals who are politically inclined and they exploit the situation.”

Tata also said bureaucratic hurdles emerge in such circumstances. “A misinterpretation of the businessmen’s motives by people with ulterior motives can bring out a defensive attitude from the bureaucrats.”

Quoting examples from developed countries, Tata said it's easier to bring about an agreement between businessmen on a common platform in other locations. However, in India, it continues to be a challenge. “Infrastructure is a good example where we have seen countries that were way behind us (move ahead) as their infrastructure is in place.”

We need flexible land use policy: Tata

We need flexible land use policy: Tata
The Financial Express, December 22, 2009, Page 20

fe Bureau, Mumbai

Ratan Tata, chairman, Tata Motors, which had to shift production of its Nano car from Singur in West Bengal to Sanand in Gujarat last year after protests over land acquisition, said on Monday that political leaders should strike a balance when it comes to using land for agriculture or for industry.

“Land is a hot issue and it is going to impact projects,” said Tata, whose automotive company pulled out of Singur last October, after months of agitation by farmers. Tata Motors had already pumped in Rs 1,500 crore into the project, and many of its vendors had set up base there. Tata was speaking at the inaugural session of the TiE — The Entrepreneurial Summit 2009 being held here. NR Narayana Murthy, chairman and chief mentor at Infosys Technologies, said infrastructure development could bring about a huge change in the way business is done in India. Stressing the need for more land to do business, he said, “India needs to improve its floor area ratio from the current 1:1 to 1:15”

Moderating a discussion between Tata and Murthy, Shekhar Gupta, editor in chief of The Indian Express, posed the question as to whether they felt land was the least reformed sector, to which Tata replied in the affirmative. Tata said land is an issue even in Japan. To Gupta’s question whether India was headed in the right direction, Murthy replied that though India was headed in the right direction, it needed a flexible labour policy, liberalisation in education and better infrastructure.

Defining the Singur experience as sad and inevitable, Tata said, “A lot of infrastructure projects are impacted due to the conflict of personal interests. The industry faces several issues on land, and these come from individuals who are politically inclined and they exploit the situation.” This is where the government needs to step in to mitigate the negative impact, he said. “More often than not, conflicts related to land are promoted by individuals who do not belong to that land area, but who have other political motives. Leaders need to define and reconcile between cultivated land and industrial land, because agriculture also needs to be efficient. There should be no long-term detriment to the land owner,” he added.

Tata went shared his views on bureaucratic hurdles faced by the industrial sector. “A misinterpretation of the businessmen’s motives by people with ulterior motives can bring out a defensive attitude from the bureaucrats.”

Quoting the examples from developed countries, Tata said it’s easier to bring about an agreement between businessmen on a common platform in other locations. However, in India, it continues to be a challenge. “Infrastructure is a good example where we have seen countries that were way behind us in growth have now grown ...(since) their infrastructure is in place,” Tata said.

Land reforms would also bring about job opportunities in India and take it to the next level of growth. “Given that India wants to create job opportunities for not-so-educated people, it is going to be in the non-technology sectors like manufacturing where we need a lot of land,” Tata added.

Curbing liquidity should be top priority: Rangarajan

Curbing liquidity should be top priority: Rangarajan
The Hindu Business Line, December 22, 2009, Page 15

RBI likely to raise CRR, key rates soon.

Our Bureau, New Delhi

Expressing concern over the excess liquidity in the system, the Prime Minister's Economic Advisory Council Chairman, Dr C. Rangarajan, threw his weight behind the possibility of the Reserve Bank of India increasing in the Cash Reserve Ratio (CRR) to tackle the situation.

He also said there could be hike in interest rates later on to tackle inflation.

Dr Rangarajan said if the traditional seasonal decline in prices does not happen in December, then early action will be called for, adding that reduction of liquidity will be the first priority.

CRR is the liquid cash that banks have to park with the central bank as a percentage of their deposits and it currently stands at 5 per cent.

Asked about the possible action on inflation and excess liquidity, Dr Rangarajan said, “The behaviour of interest rate will depend upon a number of circumstances. But probably there could be some need to reduce liquidity at some particular point after December, if the traditional decline in prices does not happen.”

“They (RBI) could increase interest rate or reduce liquidity by acting on CRR. I think action to reduce the liquidity will be the first priority as it (reduction of liquidity) can only happen by acting on CRR. I think the overall monetary demand needs to be kept under check even though primarily it (inflation) is a supply-side problem.

“Therefore some action to reduce liquidity may be called for,” he said.

Dr Rangarajan's statements mean that the RBI could follow the CRR hike with increase in key interest rates. Repo rate or the rate at which RBI lends cash to banks, currently stands at 4.75 per cent and reverse repo rate or the rate at which RBI borrows from banks, is now at 3.25 per cent.

Monetary moves

Amidst speculation that the RBI could tighten monetary policy to curb inflation and inflationary expectations, the RBI Governor, Dr D. Subbarao, had met the Finance Minister, Mr Pranab Mukherjee, and top Finance Ministry officials on December 18.

Inflation had risen to a 10-month high of 4.78 per cent in November from 1.34 per cent in October due to a surge in the prices of primary articles coupled with a low base effect.

Food inflation had risen to 20 per cent for the year till December 5, the fastest pace in over a decade.

India must tighten monetary policy: Bimal Jalan

India must tighten monetary policy: Bimal Jalan
Business Standard, December 22, 2009, Section II, Page 2

Bloomberg

The Reserve Bank of India (RBI) was needed to drain cash from the economy to check speculation in commodities, former Governor Bimal Jalan said, after food price inflation climbed to an 11-year high this month.

“Reduction in availability of money may help in reducing the speculative pressure on retail prices,” Jalan, who headed the central bank between 1997 and 2003, said in an interview. “Monetary policy could give a signal that it is worried about inflation.”

RBI Governor Duvvuri Subbarao said he discussed the country’s economic situation with Finance Minister Pranab Mukherjee on December 18, fuelling expectations he may tighten monetary policy soon. Bonds and stocks fell today, extending their decline from last week on concern the central bank may raise interest rates.

“The market has begun to price in a monetary policy action in the near term to anchor rapidly escalating inflation expectations,” said Shubhada M Rao, chief economist at YES Bank Ltd in Mumbai.

The 10-year government bond yield, which rose 14 basis points last week, gained 2 basis points to 7.74 per cent at 4:15 pm in Mumbai today. The key Sensitive stock index fell 0.7 per cent to 16,601.20 on the Bombay Stock Exchange, sliding 3 per cent since December 14.

Surging food price
Food prices are rising after the June-to-September monsoon rains, the main source of irrigation in Asia’s third-largest economy, were the weakest this year since 1972, hurting output of rice, pulses and wheat.

Production of monsoon-sown rice may total 71.65 million tonnes (mt) this year, less than the 84.58 mt reaped a year ago, according to government estimates. Sugar crop in India, the biggest grower after Brazil, fell 9.6 per cent in the first two months of the season that started October 1 to 1.7 million tonnes from a year ago.

An index of food articles compiled by the commerce ministry advanced 19.95 per cent in the week ended December 5, the highest since December 1998. India’s key wholesale-price inflation accelerated to 4.78 per cent in November from a year earlier, following a 1.34 per cent gain in October, the ministry said.

“You don’t need a stark action because inflation is confined to food prices,” said Jalan. “According to one school of thought, some indicative monetary action is worth considering, a mild one.”

RBI can hike key rates to control price rise

RBI can hike key rates to control price rise
Times of India, December 22, 2009, Page 23

New Delhi: The Prime Minister's Economic Advisory Council chairman, C Rangarajan, on Monday suggested that the RBI could reduce money supply and raise interest rate to tame the rising prices of food articles.

"If price decline does not happen in December, then early steps could be taken. RBI could increase interest rates...preferably could reduce liquidity by acting on CRR," he said.

Rangarajan was responding to a question, what measures the RBI should take to moderate food inflation that climbed to a 10-year high of 20% during the first week of December, driven mainly by higher prices of potato, other vegetables and pulses.

Making a case for reduction in money supply, Rangarajan, also a former Reserve Bank governor, said the apex bank could raise the Cash Reserve Ratio (CRR), the portion of amount that banks are required to keep with the central bank.

Through a slew of measures, the RBI has injected liquidity into the system to help the cash-starved industry to combat the adverse impact of the global financial meltdown since September last year. The RBI Governor, D Subbarao had met finance minister Pranab Mukherjee on December 18, fuelling speculation that the monetary policy would be tightened.

The RBI in October had raised the Statutory Liquidity Ratio (SLR), the portion of funds that banks are required to park in government securities, to 25%, though it retained the CRR at 5%. The central bank would come out with its next monetary policy statement on January 29.

Political pressure is mounting on the governing coalition headed by Prime Minister Manmohan Singh to arrest the price rise. Opposition parties have accused the government of being ineffective in tackling prices and disrupted parliament proceedings. A parliamentary panel last week took the government to task for failing to curb inflation. Former RBI governor Bimal Jalan, meanwhile, said the central bank needs to drain cash from the economy to check speculation in commodities, reports Bloomberg. PTI.

US eco to slow down in ’10, needs more stimulus

US eco to slow down in ’10, needs more stimulus
Times of India, December 22, 2009, Page 24


Nobel Prize-winning economist Joseph Stiglitz says the US needs to prepare for a second stimulus package as there’s a “significant” chance growth will slow in the second half of 2010.

The world’s largest economy isn’t likely to expand fast enough to create jobs for new entrants into the labour force or compensate for increases in productivity that will reduce demand for workers, Stiglitz said on Monday.

“The likelihood of this slowdown is very, very high and there’s a significant chance it may be in a negative range,” he said. “If the economy recovers, we don’t need to spend the money. If you don’t prepare now and the economy turns out to be as weak as I think it will likely be, then you are in a very difficult position.”

Stiglitz’s comments echo the view of Nobel laureate Paul Krugman and counter the Obama administration’s judgment that it’s premature to consider another stimulus package after this year’s $787 billion measure. President Barack Obama has instead praised a more limited, $154 billion plan approved by the US House aimed at shoring up the job market.

The worst US recession since the Great Depression has drained more than 7 million jobs in the past two years. The government and the Federal Reserve have spent, lent or committed more than $10 trillion to revive the economy and credit markets. Employers in the US cut the fewest jobs in November since the recession began, and the unemployment rate unexpectedly fell, the Labour Department said. Payrolls slid by 11,000, and the jobless rate declined to 10%.

Federal Reserve policy makers project a decline in the unemployment rate to a range of 9.3% to 9.7% in the fourth quarter of 2010. The US economy expanded last quarter for the first time in a year, growing at a 2.8% pace as government incentives spurred consumers to spend more on homes and automobiles.

The job market is still “in very bad shape” and it is too early for the US and other countries to begin easing stimulus measures put in place a year ago to avert a financial market meltdown, Joseph Stiglitz said in October. BLOOMBERG.

India Inc raises over Rs 150,000cr in 2009

India Inc raises over Rs 150,000cr in 2009
Times of India, December 22, 2009, Page 24

New Delhi: Companies knocking on government doors for bailout funds may have been the norm in the West, but India Inc begged to differ from this rule by raising over Rs 1,50,000 crore of capital for expansion from investors across the world in 2009. Nearly two-thirds of these funds are estimated to have come from investors in overseas markets, which themselves were in shambles and where companies were in dire need of capital, forcing them to beg their respective governments for money.

Also, Indian companies took the quickfire QIPs to meet their immediate capital needs, instead of the time consuming IPO route. As a result, the funds raised by Indian companies during 2009 were more or less equal to the levels seen in 2008, when economic downturn was not a reality for most part of the year.

A total of about 50 companies raised a record-breaking cumulative figure of about Rs 55,000 crore through sale of shares to qualified institutional investors, mostly overseas private equity firms and also local and foreign financial services firms like banks, insurers and fund houses.

According to global consultancy firm Grant Thornton, private PE and QIP space saw 221 deals till December 13, totalling $11.17 billion (about Rs 52,000 crore). “The worst seems to be over for PE investing and clearly there is renewed PE interest in investing in the country, specifically in sectors supporting India’s domestic consumption like education, healthcare and real estate. As a result PE activity in 2010 is expected to rise significantly,” said S Krishna, executive director, PwC.

E&Y’s partner and national director Pankaj Dhandaria said: “PE investment activity is on the rise again as is evident from the deal activity, which has picked up in the past couple of months.” Dhandaria added that India, which is on a growth trajectory and with its ability to generate relatively superior returns, would attract even higher degree of capital (including PE) in the years to come.

It was realty major Unitech which kicked off the QIP bandwagon earlier in the year and raised a total of close to Rs 4,500 crore in two separate deals. Other major QIP deals of the year included a consortium of foreign players putting in close to Rs 3,000 crore in Indiabulls Real Estate. Similar amounts were raised by Axis Bank and Hindalco, while a number of smaller fund-raising deals were also striked successfully.

The QIP performance of 2009 was even better that a total of little over Rs 20,000 crore — a record at that time — raised through this route during 2007, when markets and economy, both in India and abroad, were flying high. The QIP funds raised were not even Rs 2,000 crore in 2008. It was the QIP-push that took India Inc’s fund raising spree in 2009 to the overall levels seen in the previous year, as capital raising activities turned tepid in 2009. PTI.

Use entrepreneurship and innovation as antidote to poverty, says C K Prahalad

Use entrepreneurship and innovation as antidote to poverty, says C K Prahalad
The Economic Times, December 22, 2009, Page 5

ENTREPRENEURS, big or small, should think beyond available resources to become successful. This isn’t merely limited to a particular region, the golden rule applies to all. That’s what Dr CK Prahalad, Paul & Ruth McCracken Distinguished University Professor of corporate strategy at the University of Michigan’s Ross School of Business Management, told ET’s Sutanuka Ghosal and Atmadip Ray in a freewheeling chat. Excerpts:

As author of The Fortune at the Bottom of the Pyramid, are you happy with the way India is looking to achieve inclusive growth? Is there a need to strengthen the ecosystem here for unlocking value at the bottom?

There’s no denying that India needs to do more to eradicate the abject poverty in the country. Yet, we have to take notice of the success stories all around us in reaching out to the poor. The self help group system, ITC’s e-choupal model or Amul’s dairy plant are successful experiments of using the ecosystem for reaching out to the poor masses. Cellphones too have penetrated rural markets and now a million kirana shops are selling telecom products. If the telecom boom can happen, what’s stopping us from achieving similar success in other areas? It’s all about mindset...how you look at it.

Do you think, India lacks entrepreneurship in reaching out to the poor ?

There’s no dearth of entrepreneurship in the country. Even the little boys on the street, who sell small things to earn a living, are entrepreneurs. Entrepreneurship doesn’t necessarily mean volume of investment. In fact, it largely depends on innovation and the way you think. Entrepreneurship and innovation are the antidote to poverty alleviation.

The opportunities are immense in the era of globalisation. The surge in connectivity, digitisation, convergence and social networking have opened up new doors for entrepreneurial boom.

But public policy is a real stumbling block for entrepreneurial development. Why should the licences not be given in two days? Who should an entrepreneur wait months to get the requisite clearances for business? The procedures are cumbersome and the authorities need to address these issues.

What is your advice to the GeNext who aspire to take on entrepreneurial roles?

Transformation isn’t about resources. It’s all about aspiration and imagination. Why doesn’t one try to offer one-consumer-experience for a product? For instance, an entrepreneur can bring in innovation in a very traditional shoe business. Let him scan the footprint and take a 3-D image and send it to the design centre for a tailor-made product. A customer will be happy to shell out a little more for such an innovative product.

So, don’t focus on best practices, focus on your next practices.

The country has been growing at a decent clip. However, the global recession slowed down the pace a bit. What is your prescription for India Inc in the light of the latest situation?

For the last six to seven years, Indian companies had performed well and their bottom lines have risen significantly. The global recession provided them an opportunity to look back and consolidate and pay more attention to expanding operations in rural India.

Officially, India is growing at 7%. This means, some states like Gujarat, Punjab or Tamil Nadu are growing at a much faster rate. So, the average growth doesn’t mean much. It’s a segmented growth. Truth is India is a huge market and everybody is interested to come to India.

How important is scale of operation, especially in a country like India?

The scale of operation is a necessity if you want to make a difference for the people in the country. That’s why Amul is so special; ITC’s e-choupal is a runaway hit. Can’t we replicate these models?

If you have desire to do it, you can achieve it. To enhance scale, one can always opt for the franchisee model. Once you’ve perfected your business, then the franchisee model is the way to get a virtual scale.

You have always batted for the Indian economy. What makes you so upbeat about the economy?

India became independent in 1947. But it achieved economic independence only in 1992 and, in merely 17 years, the country has come a long way. India is doing pretty well compared to others. Every time a comparison is drawn between India and China, but don’t forget that China is 20 years ahead of us as far as economic reforms go. It’s like the story of the hare and the tortoise.

Changes in realty market forces landlords to revise strategies

Changes in realty market forces landlords to revise strategies
The Financial Express, December 22, 2009, Page 12

Sajan C Kumar, Chennai

With the rapid changes in real estate market cycles triggering pressure on tenants, landlords have been caught in a bind, grappling to minimise any negative impact on their investment. Since tenants will use the prevailing economic conditions to leverage better deals and incentives that may not have been available previously, a good defensive strategy that involves understanding the market, optimising the lease expiry profile and effectively engaging with the tenants should be deployed by landlords, says a recent research paper by global real estate consultant Jones Lang LaSalle.

There is also a downward pressure exerted on rental rates when tenants move to accomodations that are more cost-effective or re-negotiate their current lease terms. Tenants are negotiating with landlords in a number of areas, in an effort to reduce their real estate costs and increase their flexibility.

According to the research paper, a good defensive strategy involves a detailed analysis of the market in order to understand its dynamics and individual nature. The analysis should consider not only what the markets look like today, but also what it might look like in the future. The key elements of preparing the strategy are, understand the market, including the tenant base (what they come from and the impacts on their industries) and how brokers operate in the market.

Also, it is important to review one’s current lease expiry and determine what is the ideal weighted average lease expiry for the asset or portfolio.

Identifying the best and worst spaces, understanding what made these spaces the best and worst, and looking at ways to maximise their attractiveness is also crucial. The paper advises landlords to engage both with their tenants and potential tenants. The paper adds that forecasting potential market conditions will help identify the best mix of offensive and defensive strategies in order to maintain asset value over time. A good strategy when negotiating rentals is to ask about and see their comparables. Moreover, rent review decisions may have a significant impact on future cash flow.

Deciding when to time the lease expiry profile will depend on the landlord’s appetite for risk and how far ahead in the future one can credibly forecast the market.

Timing the majority of the lease expiries to occur in a single year can result in the maximum benefits if one manages to pick the pick rental period. However, one can also be exposed to the maximum downside, should it arrive at the bottom of the rental cycle. Alternatively, spreading the lease expiries evenly across five years may not yield the maximum returns, but it will enable the landlord to spread the risk and ensure that he ends up with average returns during the period.

Consumer sentiment rising in India: MasterCard survey

Consumer sentiment rising in India: MasterCard survey
The Financial Express, December 22, 2009, Page 11

fe Bureau, Chennai

Consumers across Asia Pacific, West Asia and Africa markets are approaching the next six months with optimism, according to the latest MasterCard Worldwide Index of Consumer Confidence survey, released on Monday.

As the global economy recovers, 21 of the 24 markets polled reflected positive consumer sentiment looking ahead, including Vietnam (90.3), Nigeria (89.4), Qatar (89.2), United Arab Emirates (86.1) and China (85), which topped the list.

Consumers in India continued to be optimistic. They are slightly more optimistic than six months ago (68.0) and a year ago (63.9). Consumer sentiment have gone up on three economic indicators. Consumers are more optimistic about employment (66.9 vs 60 six months ago), the stock market (70 vs. 68.3) and regular income (70.5 vs. 70). Outlook on the other indicators has declined from six months ago: Economy (66.7 vs. 67.2) and quality of life (69.8 vs. 74.5).

Both Mumbai (79.1 vs 61.7) and Chennai (95.2 vs 61.3) consumers have become more optimistic than they were six months ago. New Delhi (49.4 vs 79.3) has experienced a dip in consumer confidence score. A new market, Bangalore (47.2), is added to the list of markets surveyed in India.

Developed markets in the region have seen a quick recovery in consumer confidence. United Arab Emirates leapt up in confidence with the largest Index score increase of the markets last surveyed six months ago (29.6 to 86.1). Sharp improvements were also evident for Singapore with a strongly optimistic Index score of 79.4, up from a pessimistic 31.2 in the previous survey, New Zealand (69.7, up from 21.5 six months ago), and Australia (69.5 from 24.1). Across the three markets, confidence in the economy and employment has improved dramatically.

The Asia Pacific region saw an increase in its consumer confidence index score from six months ago (66.3 up from 38.7). Vietnam (90.0), China (85.3) and Singapore (79.4) reflected significantly higher consumer confidence compared to other markets in the region. Most markets showed increased confidence in their employment outlook, particularly Vietnam and Singapore, which topped the region for confidence in this indicator.

Japan (24.4), which has been pessimistic in its outlook for 30 of the 34 surveys since the inception of the index, continued this trend - more than one in three Japanese consumers expect the economy to be worse in the next six months. Philippines (49.7) hovered near the neutral mark, pulled upwards by a positive outlook towards regular income for the six month period ahead.

Markets in the West Asia seemed to be tracking to 2008 levels of optimism with the current index score of 74.5. The consolidated Index score across the six West Asia markets surveyed was much higher than that of six months ago (49.9) and even a year ago (72.7). Sentiment were particularly strong in Qatar (89.2), UAE (86.1) and Saudi Arabia (83.2).

Ansal API to raise Rs 650 cr via QIP

Ansal API to raise Rs 650 cr via QIP
The Financial Express, December 22, 2009, Page 5

Rajat Guha, New Delhi

Delhi-based real estate developer Ansal API will raise around Rs 650 crore through a qualified institutional placement (QIP) in February, 2010, a banker involved in the process told FE. The company has mandated IDFC-SSKI as its lead banker for the slated QIP.

In June, the board of directors of Ansal API had decided to seek the approval of shareholders to issue equity shares, to qualified institutional buyers to raise up to Rs1,500 crore. The company had informed the same to the Bombay Stock Exchange (BSE) as well.

Now, after weathering the slowdown and assessing its financial requirement, the company has decided to go ahead with a QIP of just Rs 650 crore, a company official said. The realty firm is also planning to increase the limit of foreign institutional investors' (FIIs) in the company to 49% from the present limit of 24%.

When contacted a company spokesman said, “We do not comment on market speculation.”

The funds raised through the QIP would be mainly used to retire the company’s debt of Rs 1,000 crore and fund its Rs 2,000 crore megapolis project. This QIP will also be used to partly fund and support the two large hi-tech integrated townships consisting of hotels, buildings, shopping malls, IT parks and group housing in Lucknow and Dadri.

Ansal API, which has built Ansal Plaza, Delhi’s first mall owns majority of commercial real estate in Connaught Place.

The promoters of the company feel that via QIP they will be able to mobilise funds faster as there are fewer formalities with regard to rules and regulation, as compared to other rights issue.

Reeling under acute cash crunch, a host of real estate companies are now resorting to QIP and preferential allotment of warrants to promoters to strengthen their cash balance.

Realty firms like Unitech, Parsvnath, Sobha Developers, HDIL, Puravankara, Anantraj Industries, Akruti City and Orbit Corp are looking to raise additional long-term funds through sale of shares, mostly through QIP, where shares are sold to institutional investors.