DLF share price plunged 19.73% intraday to hit the lowest level since February 17, 2017, after the realty major received a notice from the Supreme Court for non-disclosure of key information in prospectus of Qualified Institutional Placement (QIP), as per media reports.
The DLF stock was the worst performer on S&P BSE 200, NSE Nifty 100 indices too.
The stock of India's largest real estate developer by market value that has developed many housing and commercial projects fell after a report by Hindu Business Line said the Supreme Court has issued a notice to the company based on a petition that highlighted how it had suppressed key information in 2019 QIP prospectus regarding judicial proceedings against its largest chunk of land-bank in Haryana.
The stock has fallen for the third day in a row and tanked almost 20% today to touch a new low of Rs 137.75, the largest fall registered in more than 2 years. The realty major's Market-Cap value stood at Rs 42,476.35 crore on Wednesday. Today the M-cap stands at Rs 35,718.75 crore. Overall, investors have lost Rs 6,757.6 crore in a day's trading session.
Supreme Court issued a notice to the company based on a petition that highlighted how it had suppressed key information regarding judicial proceedings and ordered an investigation into DLF group companies and its admitted subsidiaries, DLF New Gurgaon Home Developers (DNGHDPL) for violation of land ceiling laws and other laws.
Following the speculative activity witnessed in the trading of stock, a clarification notice was issued by the exchanges, on which DLF later responded quoting, "The article seeks to present a one-sided view and the matter referred to in the article is just another attempt to rake up old issues in a new garb."
"DLF firmly denies this allegation," said the clarification reply by the Gurugram-based realty major referring to the fresh application filed by the Petitioner KK Sinha before the Hon'ble Supreme Court in May 2019, alleging that certain ongoing land litigation before the SC should have been disclosed as a part of the RHP (2013) & Placement Document (2019).
"In strict compliance with the SEBI ICDR Regulations, DLF had disclosed all material litigations pertaining to entities of the DLF group including the pending appeals filed by SEBI and the complainant before the Hon'ble Supreme Court," DLF said in the clarification, adding that," Since the SAT order had stated that certain entities are not subsidiaries of DLF group and consequently litigation pertaining to such companies does not require disclosure, in compliance therewith and the current securities regulations, the alleged ongoing land litigation did not require disclosure. Notwithstanding the aforesaid legal position, the said on-going land litigation even otherwise did not satisfy the materiality threshold for such disclosure."
The regulatory filing further added, "As per the established process, the Hon'ble Supreme Court issued notice on the said application and DLF shall respond to the same in due course."
DLF also added that it is confident that its position will stand fully vindicated in the ensuing legal proceedings and also had a call with the investors and analysts today on the matter.
Other real estate stocks were among the top losers in Thursday's trading session, with the BSE real estate index shedding 6.01% and NSE Realty declining over 7%, the biggest fall registered compared to all the other sectoral indices.
Scripts of Oberoi Realty, Indiabulls Real Estate and Sunteck Realty were among top laggards in the realty indices segment.
By Rupa Burman Roy