Sobha shares climbed 11% to Rs 962.50 on BSE in intraday trading on Wednesday amid large volumes after the property developer announced a plan to raise funds through the issue of unlisted secured non-convertible redeemable bonds on the basis of a private placement. In the past four trading days, the stock has risen 27% from Rs 759 on October 28, 2021.
at 2:17 p.m. the stock was trading 10 percent higher at Rs 950, against a 0.35 percent drop in the S&P BSE Sensex. Over-the-counter transaction volumes have increased sevenfold today. A total of 4.3 million shares had changed hands on the NSE and ESB. Over the past year, Sobha’s market price has risen 226%, compared to Sensex’s 48%.
A meeting of the board of directors of the company is scheduled for Monday, November 8, 2021 to review the financial results of the company for the three and six months ended September 30, 2021. The board will also review and approve the proposed issuance of debentures non-convertible redeemable unlisted collateral on a private placement basis, Sobha said in an exchange deposit.
For the July-September quarter (T2FY22), Sobha achieved the best sales volume of 1.35 million square feet valued at Rs 1,030.2 crore. The company had reported a total sales value of Rs 682.90 crore. at T1FY22 and Rs 689.90 crore at T2FY21.
Structural changes in the real estate industry have never created opportunities before for established, financially strong, multi-site-based developers to capitalize on the gradual but stable recovery in housing demand, Sobha said in her update. operational for the second quarter of fiscal year 22.
The consensus of most industry experts remains that working from home, low interest rates, increased affordability, significant upturn in prospects for the IT industry and rising wages, etc. the sustainability of demand, the company said.
“The constant reduction in unsold inventory and the recovery in demand are pushing the housing market out of the down cycle. The prices are going up. This, along with the potential market share gains, puts organized developers in an ideal location, ”he added.
ICICI Securities analysts believe the company’s trading performance in T2FY22 is commendable given the impact of the second wave of Covid in India, and expect sales momentum to continue ahead of S2FY22E as well. only thanks to the new launches.
The listed developers, including Sobha, have staged a number of launches in Tier I cities. Low mortgage rates, stable house prices, and strong hiring prospects for IT / ITeS and financial services, particularly in South India, and continued work from home is also expected to support residential housing demand in FY 23-24E.
Developers maintaining price discipline with price increases of 4-5% on a comparable basis in new phases of ongoing projects, we expect single-digit price increases every year to protect EBITDA margins of developers based in the South, which range between 20 and 25 percent, the brokerage firm said the postal firm’s business update in the second quarter.