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- Unitech home buyers angry at stalled project, want monitoring agency was reported in Business Standard paper on Oct/09
- BNP Paribas in a report 29/Sep said, “Where's the construction?” If seeing is believing, we lack belief!
Bull market rally starts with Auto and ends with Realty and now most of the investor are holding realty sector I would advise take informed decision.
In many of my investor meet, seminar or interactive session I normally feel Realty is one sector liked by retail investor as they feel Land prices never falls and it is only one way that is up. Sub-Prime in U.S was also cause of the same belief.
CBI said it had registered a case on October 21 against “unknown” DoT officials and “unknown private persons and companies and others” under the Prevention of Corruption Act. The press release did not specify who made the complaints.
“It has been alleged that there had been serious irregularities in the award of Unified Access Services Licences to private companies. As per information received, there was criminal conspiracy between certain officials of DoT and private persons/companies and others in order to award licences to these companies by putting a cap on the number of applicants against recommendations of the Telecom Regulatory Authority of India and by awarding licences to private companies on first come first served basis on the rates of 2001 without any competitive bidding,” the CBI said in a statement.
Department of Telecommunications comes under CBI scanner, in response to complaints of irregularities in the way 2G (second-generation) licenses were awarded to nine new operators in 2008. Suspicions arose last year when two new players — Unitech Wireless Services and Swan Telecom — sold part of their stake in their companies at huge premiums within weeks of acquiring the licences. While Swan sold 45% stake to Etisalat for $900 million (Rs 4300 crore), Sanjay Chandra-promoted Unitech group sold 74% to Telenor for over Rs 6,100 crore. http://www.business-standard.com/india/news/dot-comes-under-cbi-scanner/374057/
http://www.business-standard.com/india/news/unitech-home-buyers-angry-at-stalled-project-want-monitoring-agency/372732/ Unitech home buyers angry at stalled project, want monitoring agency Irate buyers of homes from Unitech, the country’s second-largest real estate developer, today threatened legal action against the company for failure to complete construction within the promised schedule. Buyers of homes in the under-construction Unitech Habitat in Greater Noida have come together under the banner of the Unitech Habitat Owners Association. In a protest meeting today at the Unitech sales office in Gurgaon, they demanded refund of the money they’d paid, with 18 per cent interest. |
BNP Paribas
Unitech: Where's the construction?
- Site visits to UT’s projects launched in 1H09 in Chennai, Kolkata, NCR (~80% of sales) indicate no construction activity.
- Incremental progress in old projects. Lack of const. activity raises concerns on fund use and receipts from sales.
- Investor sales increase cancellation risks. Reiterate REDUCE and TP of INR50 based on 1x book + INR10 for Telecom.
If seeing is believing, we lack belief!
8m sqft of sales and counting, but no construction!
We visited Unitech’s project sites in NCR, Chennai and Kolkata, which accounted for more than 80% of Unitech's 8m sqft of residential sales (~6.5m sqft on pro-rata basis) in the past 7 months. There was no sign of development activity on the new projects (see Appendix). Our channel checks with the company officials and brokers suggest more than 60% of sales are to investors who have paid a notional token amount of 5-10% of total cost as the booking amount. Unitech has raised approx INR1.5b through these sales bookings but we were surprised to see no construction progress even after 6-7 months of the launch of some of the projects. In comparison, HDIL has made visible progress in the construction of its newly launched residential projects in Mumbai, which provides more confidence on its sales. Developer cash flows are frontend loaded and lack of construction progress despite huge project launches raises concerns about diversion of funds to other projects and whether cash receipts for the stated bookings has been obtained.
CBI searches DoT office http://www.thehindubusinessline.com/2009/10/23/stories/2009102351970100.htm
Among the lapses identified by the CVC are the non-transparent
manner of spectrum allocation, the absence of competitive bidding, loopholes in
tender documents that allegedly benefited some companies and the fact that the
licences were issued in 2008 at a low price fixed in 2001.
http://economictimes.indiatimes.com/News/News-By-Industry/Telecom/CBI-zeroes-in-on-DoT-offices/articleshow/5151158.cms?curpg=2
The last time CBI raided DoT was in 1997 in a case that ultimately led to the conviction of then communications minister Sukh Ram and DDG (licence finance) Runu Ghosh. The scam involved DoT officials favouring a Hyderabad-based private firm that had provided substandard equipment, resulting in a loss of Rs1.6 crore to the government. A raid by CBI had found Rs3.6 crore in Sukh Ram’s house. http://www.livemint.com/2009/10/22234433/Telecom-dept-under-CBI-lens-ov.html?h=B
