Rakesh Jhunjhunwala latest stock pick

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Pee Vee
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Rakesh Jhunjhunwala latest stock pick

Post by Pee Vee » Sat Sep 01, 2018 1:59 pm

Rakesh Jhunjhunwala holds 1.19 crore shares in DLF as per information in the ET.

At today’s price of Rs 216, Jhunjhunwala’s DLF stake is worth Rs 257 crore. According to a source, his last purchase was at Rs 170. JP Morgan has an ‘overweight’ rating on the stock with a target price of Rs 280 by March 1, 2019.

The information of Jhunjhunwala’s holding in DLF was so far not made public as neither DLF nor the billionaire investor was legally required to disclose this. Neither is it required now but nonetheless, the company has made it public.

Rakesh Jhunjhunwala made his first share purchase of the Delhi-based realtor in 2016, according to the annual report. He bought and sold shares of the company during 2017-18, according to the annual report. At the start of the last financial year (April-March), he held 75 lakh shares of the company equivalent to 0.42 percent stake in the company.

As a practice, Jhunjhunwala, known for his stakes in Lupin and Titan, usually doesn’t discuss his stock-specific investments.

Jhunjhunwala’s investments in stocks are widely tracked by market followers, their disclosures at times leading to run-up in the price of the given scrip in short-term.

While it cannot be said with certainty but going by available information, the DLF holding is the second acquisition by Jhunjhunwala in a Delhi NCR-based company, the other being Jaiprakash Associates. The Manoj Gaur-run company also has exposure to real estate. A second acquisition is thus surprising since he is a big critic of the Indian real estate sector.

According to a BSE disclosure by Jaiprakash for April-June, he held 5 crore shares in the Noida-based company, equalling 2 percent equity of the company.

Fortunes may be turning around for DLF as its home market of Gurugram in Haryana and the competing areas of Noida, Ghaziabad and Greater Noida in Uttar Pradesh and Faridabad, also in Haryana, are seeing an exit of small-time realtors, leaving large established ones like DLF to reap the benefit.

The company also recently made an accounting change under which it is now booking sales only on handover of the property. The company also plans to do a Rs 4,000-crore qualified institutional placement this financial year, all of this lending solidity to the company’s books.

Chairman KP Singh believes that the company would achieve faster growth in the development of offices and retail space on the back of its partnership with Singapore's sovereign wealth fund GIC, according to a report by PTI.

However, he said the parent company DLF would also continue to build commercial projects, separate from the joint venture with the GIC.

Singapore's investment firm had bought 33.34 per cent stake in DLF's rental arm DLF Cyber City Developers Ltd (DCCDL) for about Rs 9,000 crore. DLF has the remaining 66.66per cent stake in the JV firm DCCDL.

“Real estate demand in the recent months has also received much needed impetus with the Credit Linked Subsidy Scheme (CLSS) for the middle income group under the Pradhan Mantri Awas Yojna (PMAY). Your company (DLF) is well placed to capitalise on these opportunities in the business development space,” he told shareholders.

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