DLF

DLF, India’s largest real estate developer is in for tough times. While its scrip closed lower by 6.7 percent to Rs189 per share on 16th August 2011, it is trading 4 per cent lower today and has hit a 2 year low. This fall can be justified as the Competition Commission of India imposed a fine of Rs.630 crore on the company for abusing its dominant market position.[caption id="attachment_62496" align="alignleft" width="380" caption="Image from Reuters"][/caption]The Competition Commission of India’s verdict on Friday came after Belaire’s Owners Association said that DLF imposed arbitrary, unfair and unreasonable conditions on them. As per the initial plan, the Belaire project was supposed to have a 5 multi-storeyed residential buildings in Zone-8, Phase-V of DLF City, Gurgoan with each building comprising 19 floors and 368 apartments.

DLF is currently sponsoring Indian Premier League (IPL), a Twenty20 format cricket league in India. DLF Group has paid$40 million to be the title sponsor of the tournament for 5 years.

The problem occurred when DLF constructed 29 floors over 564 apartments. In their complaint, Belaire Owners Association said that owing to the fall out of this delay, they would have to bear huge financial losses and wait indefinitely for the occupation of their apartments. By constructing more number of floors, the areas and facilities earmarked for allotees has also been compressed. Also, the execution of the project was delayed and is now expected to be completed by the year end as against the earlier date of 2009.

The company, in its defence has said that they are studying the order and will consult legal options.

For the June 2011 quarter, the company reported a 12.8 percent fall in net profit to Rs358.36 crore while sales rose by 20.6 percent to Rs.2,445.82 crore compared to the corresponding year ago quarter.

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