In a major ding for the Indian equity markets, the planned IPO for Emaar MGF was withdrawn from the markets on Friday near the close of the market. Emaar MGF had blanketed the country with advertising highlighting all the projects they did, that is Emaar did in Dubai. And that’s the issue, Emaar MGF is a joint venture between Emaar of Dubai and MGF of Delhi. MGF has completed ZERO real estate projects in India, Asia or planet earth. Whereas, Emaar has done a boatload of work in Dubai, which is great but that is Dubai and the IPO was for India.
The back tracking has already started by Emaar MGF saying they have “enough funding” available for their projects. – Really, then why go through the whole IPO process?
Better yet, they said now they will look at other avenues such as private placements or PE deals at the SPV level. Once again why didn’t they do that before, because private investors would ask 1,000 questions while the general investing community would look at the nice billboards and blindly invest.
Their slogan is “Creating a New India”, which still might be the case it just won’t be creating it with money from the equity markets.
Trivia time. What does MGF stand for? Motor and General Finance. Which has been their main business for many years – loaning money.
Update: Someone just sent me an SMS saying “Emaar has become BEmaar”, too funny.