DLF shares sink 28% on Sebi's ban; mcap falls by Rs 7,439 cr

Shares of realty giant DLF today fell sharply by over 28 per cent, wiping-out Rs 7,439 crore from its market valuation, after Sebi imposed a three-year ban on the company and its top executives from securities markets.

After falling 29.99 per cent to Rs 102.70 -- its lifetime low on the BSE in intra-day trade, DLF shares finally ended at Rs 104.95, down 28.46 per cent.At the NSE, the stock plunged 27.98 per cent to settle at Rs 105.80.

DLF was the worst performer among the 50-bluechip Nifty scrips.The carnage in DLF shares led to Rs 7,438.67 crore-loss in the company's market valuation which stood at Rs 18,701.33 crore at the end of trade today.

On the volume front, 168.10 lakh shares of the company changed hands at the BSE, while over 8 crore shares were traded at the NSE during the day."Markets lost all their early gains instantly in reaction to Sebi's decision to ban DLF top management to access capital markets over the next 3 years. DLF, which is an index stock, corrected by over 27 per cent," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio.

Selling was also seen in other realty stocks, with HDIL falling 5.11 per cent, Unitech (2.43 per cent), D B Realty (2 per cent) and Anant Raj (1.23 per cent).
Led by the losses in these scrips, the BSE realty index ended 9.24 per cent lower at 1,419.23, emerging as the biggest loser among the sectoral indices.

In a major blow to DLF, Sebi has barred the realty major as well as its six top executives, including chairman and main promoter K P Singh, from the securities market for 3 years for "active and deliberate suppression" of material information at the time of its IPO.

Besides K P Singh, those barred from the markets include his son Rajiv Singh (Vice Chairman), daughter Pia Singh (Whole Time Director), Managing Director T C Goyal, former CFO Ramesh Sanka and Kameshwar Swarup, who was ED-Legal at the time of the company's public offer in 2007.

On its part, DLF said late last night that it has not violated any laws and it would defend its position against any adverse findings in the Sebi order.
"DLF has full faith in the judicial process and is confident of vindication of its stand in the near future," the company said in a statement.

The stock had fallen by nearly 4 per cent yesterday too.The company said that the order, dated October 10, came to its notice only yesterday and same was being reviewed by DLF and its legal advisors.

After its over four-year-long probe, Sebi found that a "case of active and deliberate suppression of any material information so as to mislead and defraud the investors in the securities market in connection with the issue of shares of DLF in its IPO is clearly made out in this case."

In his 43-page order, Sebi's Whole-Time Member Rajeev Agarwal also said that violations are grave and have larger implications on safety and integrity of the securities market.

While the regulator has not imposed any monetary penalty, the prohibition order would bar DLF and the six persons, from any sale, purchase or any other dealings in securities markets for a period of three years, including for raising funds.

DLF had debt of more than Rs 19,000 crore as on June 30, 2014, while its already-proposed fund raising plans include nearly Rs 3,500 crore through issue of certain bonds to lower its debt burden.

This is one of the rare orders by Sebi where it has barred a blue-chip firm and its top promoter/executives. Sebi's order can be challenged at Securities Appellate Tribunal.
DLF is the largest real estate group in the country with nearly Rs 10,000 crore annual turnover and market value of over Rs 26,000 crore. Its market cap had crossed Rs one lakh crore mark soon after its listing in 2007, but fell later.

DLF's IPO in 2007 had fetched Rs 9,187 crore -- the biggest IPO in the country at that time.In the broader market, the Sensex ended 34.74 points lower at 26,349.33.