DLF''s $2.4 billion IPO almost covered in days

Mumbai: The $2.4 billion initial public offer (IPO) by India''s biggest developer DLF Ltd., is fully subscribed just days into a two-week global roadshow, a source close to the issue said.

Sources cited several large bids of between $200 million and $500 million by institutional investors, with "surprisingly" strong interest from Indian institutional investors.

Fund managers who met company executives in Singapore and Hong Kong this week were also enthusiastic, he said.

DLF, which built much of the outsourcing centre of Gurgaon, near New Delhi, has relaunched its initial public offer after a stock market meltdown in May last year and some disputes with minor shareholders stalled the issue.

The IPO comes at a time when many fund managers and analysts expect a property price correction in India, after a surge in building activity doubled land prices in major cities in the last two years.

DLF vice chairman Rajiv Singh said last week that there was no property price bubble and that his firm''s earnings in the next year would be a pleasant surprise. DLF is selling 175 million new shares, equal to 10.27 per cent of the enlarged company, at Rs500-550 each.

Some $864 million of the IPO''s proceeds has been earmarked for land purchases. The offer price values DLF at over $23 billion at the upper end of the band and places it above the country''s top private bank ICICI Bank which is valued at $20.6 billion, Wipro Ltd. which is valued at $19.5 billion and top lender State Bank of India which is worth $17.1 billion.

DLF''s road show, which runs till June 12, will also take in the United States and Europe. Kotak Mahindra and DSP Merrill Lynch are the lead arrangers for the issue, along with Citigroup Deutsche Bank, ICICI Securities, Lehman Brothers, UBS and SBI Capital Markets.