The company has raised Rs 16,750 million as private equity in eight projects in November 2007.

According to sources, DLF Home Developers, the wholly-owned arm of DLF, would develop about 40,000 housing units in the mid-income category.

Despite slump in the housing demand for the last six months, the company has witnessed marvelous response for its mid-income housing projects and sold over 7,000 flats so far in the current fiscal.

DLF has unveiled mid-income housing projects in Bangalore, Gurgaon, Hyderabad, Indore, Kochi, Kolkata and Pune.

“We must have laid off some employees somewhere,” DLF Chairman K P Singh told reporters on the sidelines of India Economic Summit, but did not give the number of jobs that were cut.

The company has also deferred some of its projects due to poor demand. “In hotels, residential and commercial everywhere…deferred because of lower demand and liquidity crisis,” he said, again without sharing the specifics.

Singh also said high interest rates have taken a toll on demand. “There are no takers for housing sector… Ideally, the interest rate should be around 7%.”

Asked if the current prices of the realty projects are inflationary, Singh denied and said: “It cannot be inflationary as it has to be competitive. It also depends on supply and demand.”

Because of demand going down, many projects have been closed down by many developers across the country, he added.

On an average, they registered an 18% negative return over the last two months. The market capitalization of all the Indian developers has eroded around 60-85% during the past few months and it has had its impact on the AIM market.
Unitech Corporate Parks, the AIM-listed entity of the Delhi-based real estate firm Unitech, has been the worst performer with 27% negative return; while the Mumbai-based Hiranandani group’s Hirco has suffered a 23% fall.

KPMG executive director Jai Mavani said, “This is largely due to the environment and has nothing to do with a particular developer. The projects offered by the AIM entities are largely construction and development rather than operating ones. Currently, they are not generating cash. This is the reason why these funds have been lagging behind since the time of their listing”.

The India-focused funds listed on the Singapore Stock Exchange tell a similar story. The recently-listed Indiabulls Properties Trust is also trading below its issue price.

According to a recent Credit Suisse report, despite developers’ assertions that prices remain at an all-time high, a deeper look shows that all is not well with the sector. Recent land auctions, discounts being offered by developers, cancellations and prices in the secondary market all point to an impending price correction.
It added that mortgage disbursals, stamp duty and registration fee collections also indicate a slowing demands. Developers are finding it increasingly difficult to raise funds and distress sales are on.