Shares in DLF and the Indiabulls Group slumped on Wednesday, a day after anti-graft activist Arvind Kejriwal alleged that the company received undue favours from the government in Haryana.
DLF, valued by investors at about $6.82 billion at Wednesday's close, ended down 4.95 per cent, after losing 7.3 per cent since Monday. Investors, worried about the allegations, have dumped the stock, wiping out more than $1 billion of its market value over the last three days. India Against Corruption (IAC) activist Kejriwal said the Haryana government allotted DLF 30 acres of land marked for public use, and it got another 350 acres as a result of a bidding process that favoured the developer.
On Friday, Kejriwal, who is setting up an anti-corruption political party, accused DLF of arranging favourable loans and real estate transactions for Robert Vadra, a businessman who is married to the daughter of the ruling Congress party chief, Sonia Gandhi. Vadra and DLF have denied the accusations. In a statement issued to the Bombay Stock Exchange (BSE) on Wednesday, DLF said: "DLF has neither sought nor enjoyed any special favours from the government of Haryana and all developments of DLF undertaken over the last four decades are strictly in compliance with all applicable laws, rules and regulations with an adherence to the highest ethical standards."
Shares of Indiabulls Group companies such as Indiabulls Real Esate, Indiabulls Financial Services, Indiabulls Power and Indiabulls Securities are under pressure on back of heavy volumes.
The Indiabulls Financial Services stock closed down 3.16 per cent to Rs 224.95 at the close of trading hours on the Bombay Stock Exchange on Wednesday. Arvind Kejriwal’s statement on Tuesday that Indiabulls had received investments by politicians had a negative impact on the stocks of Indiabulls firms.
Indiabulls Financial Services had a promoter holding of 32.31 per cent as of September 30 this year from 37.01 per cent in June.
Indiabulls Real Estate and Indiabulls Infrastructure and Power tanked 7.96 per cent and 4.85 per cent at Rs 60.70 and Rs 6.28 respectively on the BSE. Indiabulls Securities was down by 7.43 per cent to Rs 9.10 while Indiabulls Power fell 8.25% to Rs 12.23 on the Bombay Stock Exchange (8.61 per cent fall to Rs 12.20 on NSE) on Wednesday.