DLF, Unitech shares drop 8% each
DLF Ltd
Shares of New Delhi-based realty majors DLF
and Unitech came under heavy selling pressure on Wednesday, falling eight per
cent each, the most in three months.
Market players said the
sell-off could have been sparked by apprehensions of a Bharatiya Janata Party
(BJP) -led alliance likely forming the next government.
While Robert Vadra,
son-in-law of Congress President Sonia Gandhi, has been under a lens for his
alleged land deals with DLF, Unitech has faced action from the Central Bureau
of Investigation during the second term of the United Progressive Alliance
government. Also, Unitech Managing Director Sanjay Chandra was in judicial
custody over alleged arbitrary spectrum allocation to his company's telecom
arm.
"It's logical to
believe a BJP regime will be tough on Vadra, as well as DLF," said an
analyst who did not wish to be named.
Unitech has exited its
telecom business and is now focusing on real estate. Analysts say, uncertainty
over which party might form a government and what its stand could be on the
telecom scam probe might have caused a decline in the Unitech stock price.
The DLF shares ended 8.66
per cent lower at Rs 140.25, while Unitech slipped 8.32 per cent to Rs 15.86.
The two stocks pulled BSE's realty index five per cent down on Wednesday, even
as the benchmark Sensex recouped most of its losses to end 0.2 per cent lower
than the previous close.
Both DLF and Unitech
refused to comment. BJP leaders, however, have earlier said on record that they
do not believe in being vindictive.
Analysts said
profit-taking after a sharp run up in recent months could also have led to a
fall. In the past two months, realty stocks have outperformed the broader
market by a wide margin. Since March, the BSE realty index rose 22.5 per cent
until Tuesday, against a 6.4 per cent rise in the Sensex.
"Going ahead, one
needs to be cautious. A rational view suggests one should take an investment
call in these stocks after election results, rather than taking a plunge now.
The markets are already factoring in a positive poll outcome to some
extent," said Vaibhav Sanghavi, director (equities), Ambit Investment
Advisors.