Can HDIL be a beneficiary of the affordable housing theme? They have huge parcels of land in and around mumbai and have been trying hard to monetize it,but in vain.recently they have come out with a affordable housing theme at mulund by the the name nest and is said to be having very good customer response.As per the company they have received bookings for more than 85% of the project launched.Their price/book ratio is only 0.25.Even if one consider affordable housing to be just a asset monetisation exercise with very little margin ,it can be hugely attractive for a heavily debt laden company .Recently in Nov ,Morgan Stanley bought shares in the company
making it more attractive.
If you go through the review sections of the Various properties of the company,customers have given a serious thumbs down. Handover delays,inferior materials are some of the issues cited and numerous dealings of part payments in cash only.
Central bank of India has taken symbolic possession of some of their properties ,if the issues are not sorted out immediately they will not be any sales in these properties.and similar issues with Andhra bank and Union bank.
FIIs have entered in the company previously too and has exited with loss in numerous times.
But any proper settlement negotiations with the banks could be a huge positive,their debt too have come down in previous years.
.At a cmp of 65,if you consider the risk reward ratio,reward seems greater.
Kindly correct me in things where I have gone wrong
Disc: not invested ,tracking closely as an investment opportunity