In my last reply in the last para read "Don`t expect dazzeling lights` in place of "expect dazzeling lights"....

Parawise Reply:

1. "Assets managed by Unitech" - Either the Management or the God knows.

2. "Brand Image": It does have positivity in as far as brand image is concerned.

3. "Economy has come a long way in last 5 years" - Does not relate to Unitech.

4. "Every MNC wants to have...." - Oh Really! Do they have the money to buy? MNCs are filing for insolvency one after the other. Big names like Lehman, Meril Lynch (would have done but for having been saved by the Bank of America), Fenny and Fredie. Latest on the list being Ford. Citi may follow soon - or at least is not in the pink of health.

5. "Real Estate Never Come Cheap....Afordable" - It is a comparative term. Reliance looked cheap at 3300 but looks expensive at 1000; L&T looked cheap at 4800 but is expensive at 750; Sensex was going cheap at 21000 because of overplaying of `India Shining Story` but is expensive at 9000; a flat looked cheap at 6800/- a sq ft but the same flat is expensive at 4500/- a sq ft.....

6. "Now world want India to grow, it will help Global economy so lot of money still will come to INDIA and it`s real estate. ...." Provided there is money available globally.

7. "Market Cap of DLF was peaked at 2.5 Lac crore. Is`nt it whoping? ..." But it is now a meagre 34948.4 Crore now and would come down to perhaps less than 10000 crore the way market is sliding. A whooping drop! Isn`t it?

8. "Demand has come down majorly bcoz of interest rates factor and global slow down". - For oncec you are right. But it is in contradiction to your other assertions.

9. "What if the interest rates further fall to 7%". - Nothing would happen until liquidity is improved. Luckily, India`s scenario is different from world scenario in as much as we thrive on domestic consumption and we have generally agri-based economy. But you won`t expect run-away rise in realty prices, which were earlier driven by the foreign companies that have gone bust now or are in bad financial shape. Seeing runaway price rise in realty, speculators joined in that further acted as a catalyst. Now the prices have to settle down at a reasonable level because even the input costs are coming down - commodities like steel, alluminium, copper etc. are all coming to new lows.

So don`t expect magic in realty. See realty in reality.

Finally, India`s story differs from US or USA or Japanese or China`s or Korea`s story for the reasons stated herein. Still our market is apeing western markets. A sneeze in NASDAQ or DOW JONES brings cold here. We Indians are not confident of ourselves. Our monetary system is better controlled and regulaed.

There is a blessing in disguise - with falling Indian Capital market and depreciating INR the FIIs are able to take out those many lesser dollars. For example if they had exited when Sensex was 21000+ each Reliance share would have given them Rs.3300/- and at one US$ = INR 38/- they would have taken out US$ 86.84. Now at current valuations of Reliance and US$ each Reliance share would give them INR 1058/- which is equal to 1058/50.18 = US$ 21.08 - see the difference US$ 21.08 against 86.84.

India`s story would continue to be shining - but expect dazzling lights because dazzeling light only makes one blind. See enough light that shows you the path to reality....

Parawise Reply:

1. ...

You are being gracious and generous to the Management by calling it `Lousy`. I would call it `fraudulent`.

Despite my number of mails on this Board in 2005-06, the Management did not reveal the details of Company`s land bank. The Management started counting on and evaluating as its own even such landbank that was owned by some other owner and with which the Company had only signed an `MOU`; without even having paid a single penny to te owners. I think the CMD is a learned man - having lot of knowledge of `Organic Chemistry` and in particular `Covalent Bond` - in which when one atom joins another with a co-valent bond, each atom carries the valency as its own.

Thus if Unitech had signed an MOU with say `X` having landbank worth 100 Crores, Unitech started calling it as its own landbank without even having paid any money to `X`.

Unitech made 12:1 bonus and 1:1 bonus not to please the shareholders but to have large capital base. We all know that foreign direct investment comes only in companies having large capital base and liquidity. It improved the liquidity further by 5:1 stock split. In 2003 its equity was 12.1 Cr, which now stands at 324.68 crores; 162.38 Crore shares of Rs.2/- each.

Now, see the fraud Unitech has played on the DOT and in turn on the country. Without having any infra-structure it applied for 2G spectrum; with no intentions to go in for mobile communication but to sell it in black. On a smaller scale if someone buys cinema ticket with no intentions of seeing the film but sell the ticket in black, he is arrested for selling the ticket in black.

But Unitech promoters are going scot free. The matter is now before Hon`ble the Delhi High Court. I hope Unitech promoters are punished for their black deed of selling in black 2G spectrum to a foreign company. Or did they act as catpaw for that foreign Company and made lot of money for themselves.

So I say once again you are being generous to Unitech management....

Friends, even at current price of Rs.42.75 Unitech share is 183.7 times its price in 2003 - a rise of 18270%. Wow!

In 2003 Unitech share was trading at Rs.30/-. Its face value was Rs.10. Then the Company issued bonus shares in the ration 12:1 and stock split of 5:1 in 2006. So one share became equal to 65 shares. Again in 2007 it issued bonus shares in the ratio 1:1. One share of 2003 is equal to 130 shares now. If you divide Rs.30/- by 130, cost of each share purchased in 2003 works out at .23P. Present value of Rs.42.25 is 183.7 times or a percentage gain of 18270%!

In the case of DLF 1 share of 2002 is equal to 440 shares today. In 2002 DLF in a `Buy Back` offer, bought its shares at Rs.306/- around declaring Rs.306/- to be the fair value. The Offer was made to get the shares de-listed from the Stock Exchange. (It was perhaps only listed on the Delhi Stock Exchange and had noliquidity). Shareholders fell for the Offer - not knowing it was a fraudulent design by the promoters.

So current share at 2002 valuation of 306 is priced at 406/440 = .92P. (Rs. 406/- includes Rs. 100/- paid for 10 shares of Rs.10/- issued at par after 10:1 right issue of convertible debentures).

Today at its CMP 231.45 the share trades at a multiple of 250; i.e. a rise of 24900%. Wow!

Believe it or not.

Truetalk...

Friends,

Look for my messages regarding realty companies, more importantly Unitech during 2005-2006. What I said then has come true. I told you all that Unitech is bluffing the investing public by giving out false figures of its holdings of land bank.

Now Unitech has played fraud by becoming catpaw for some other company in bagging 2G licence.

Don`t worry, the High Court would set aside the 2G licences granted to various licencees on `First Come First Served` basis, a policy declared illegal by the Delhi High Court in 1999.

Truetalk ...

I think you are right. I have wiped out all my gains in this counter. However, at this juncture it is futile to get out. At current price one gets 10% tax free yield in the form of dividend. Further downside is limited. One may add at CMP.

Considering that even large caps like Reliance, L&T and many others too have seen upto 75% downfall from their high, a small cap which is not even fancied by the market can not resist downfall. Being an ill-liquid stock, a large sell order would put it on lower circuit and a large buy order would put it on upper circuit.

The management is not investor friendly. Otherwise, sitting on huge reserves it could improve liquidity by announcing bonus in large proportion.

Thanks anyway. ...

Now money is at ??? what ??? is going to do with the moeny and where they will invest to see it growing. Obvious answer is ASIA or those countries which can give growth. If money comes to INDIA it will definately go to real estate also. But it is a time taking process but not Inevitable ...

Now money is at ...

I highly appreciate your reply. I agree on couple of replys of my queries. Liquidity and Sentiments are driving these markets downwards. So as realty stocks and prices of realty as well. (centre of the problem is US subprime) Where is the money going what is it`s destination? Currency or money will not have any value if it is not flowing. People took money from banks and defaulted, but where has that money gone is it destroyed or disaapeared from the system? the answer is NO. People bought house following is the flow chart of maoney-- Investors -to- Banks -to- Borrowers( Defaulters)-to-Realty developers -to-??? Now banks asking thier money from borrowers ( Bankrupt people) and Investors asking thier Money from Banks. Banks either getting bankrupt or writting off losses and withdrawing money from whereever they have invested. This has worse the situation and people are retaining thier money. This scenerio has to end otherwise value of currency will diminish and we will enter in to barter system again. So for this with fear of utter failure US govt and govt of other countires as well taking steps. US will come up with a better policies on lending and better regulation this time to avoid simmillar mishappening in Future. Now money is at ...

I never supported the management. I was critical, for them diluting the share value of the investors by splitting their shares. I only contradicted your way of valued their share gain as 20000% or more. ...

WOW - seems like a fairy tale - in fact, it is a fairy tale. You would be better of comparing market cap of Unitech in 2003 with its current market cap. This will be a true, true value ;) At the end of Mar2004 Unitech had 1.24 cr shares outstanding. It was same until march 2006. In march 2007 the outstanding shares issued climed to 81.7 cr and in march 2008 it jumped to 162.4 cr. The book value of its share in 2004 was 120, in 2006 it was 179 and currently it is 13.21(Rs Thirteen and twenty one paise). Among their assets, they list a) capital work in progress at 7083 cr. and investments at 1400 cr. Only Unitech can clarify how much their 7083 is actual worth after shaving in real estate prices. Only god knows how much of the 1400 cr investments were shaved in this down turn. Factor in these two and their book value is less then ten bucks. Their EPS in 2006 was over Rs 55 per share and now it is about Rs 6 per share. In 2004 net cash from operating activitiy was + 60 cr and in 2008 it is -3686 cr. Please re calculate using the then and now market cap and shares outstanding - you would arrive at the true, truevalue. Your method is like adding all money that is owed to you by the people, but does not take into account all money owed to the people. :) Whatever said - this is a company with lousy management. ...

Really encouraging True talk. You have missed one vital point for DLF- DLF-AUE out of court settlement for the share holders during 1997 settled around 23000.00 per 10.00 share. Only those oldies will remember their booty. Your Unity working is some thing worth more than five star. Cheers and have a nice day. ...

Dear Truetalk, Unfortunately my family sold a lot of Unitech in 2003.... otherwise we would be somewhere on cloud 9... Now i have to live with this misfortune of missing the bus......