The builders are back on Dalal Street after a gap of more than a year. At least six real estate firms plan to mop up more than $2.5 billion from the capital markets by December, 18 months after poor response forced Emaar MGF to scrap its Rs 6,500-crore maiden share issue a day after it opened in February last year.

There are two reasons for this rush

One, the market is looking comparatively better today.

Two, most of these companies are in serious need of liquidity.

With market conditions still tight, it will not be easy for these issuers to demand substantial premium from investors,Looking at the present volatile market, it would be really difficult to predict the premium. But if we go by the recent response to IPOs, these real estate companies could debut at a 5-10% premium Godrej Properties, the real estate arm of the Godrej Group, plans to sell around 10% through its maiden public issue.   

Five companies have so far raised Rs 3,160 crore from the capital markets this fiscal, according to market research firm Prime Database. The last to be listed, Mahindra Holidays and Resorts, debuted on BSE 7% higher than its issue price.

Emaar MGF, Sahara Prime City, Godrej Properties, Lodha Developers, Nitesh Estates and Sriram Properties will all hit the capital markets this year, signalling that the worst may be over for an industry that virtually cratered in the global economic storm last year.