mumbai cashstrapped real estate companies looking for succour from the capital market are likely to run into headwinds on the pricing front market watchers say unless the promoters price their issues a bit more realistically they are likely to see a tepid response from investors some of the highprofile new issues over the past few months were felt to have been priced expensively resulting in the stocks faring poorly on listing nearly a dozen real estate companies are looking to mop up over rs 15000 crore through public offerings in the coming months godrej properties db realty emaar mgf lodha developers sahara prime city kumar builders ambience ashoka buildcon are among the companies which have filed their draft red herring prospectuses drhp with sebi those in the pipeline but which have not yet filed their drhps include nitesh estates prestige constructions bptp and oberoi constructions the ipofilings mark the second round of fundraising in the real estate industry which had been wracked by the global financial crisis and the resultant drop in demand signs of a revival in the residential segment in aprilmay this year prompted many to hit the capital market to raise fundsmerchant bankers are however sceptical about investor appetite given the huge overhang of paper there are serious challenges on the pricing front says nimesh shah md fortune financial mr shah is of the view that there is too much paper on offer at the moment which is dampening investor appetite and with almost all of the recent quality companies quoting at a discount to the offer price the prospects look bleak he added industry experts point out that investors should look at the earnings model of the real estate companies rather than the landbank model because in the latter prices tend to be volatile also there are concerns that builders are putting value to the whole piece of land where they have partial ownership investors need to do due diligence as to whether the land bank is agricultural land or nonagricultural land currently valuation of land is being done arbitrarily if it is agricultural land one needs to factor in the cost of conversion property tax cost to be paid to the government etc said a real estate developer on condition of anonymityinvestment bankers believe that this phenomenon is not true of india alone but is also seen in other countries like china real estate companies are quoting at an almost 60 discount to their navs said a banker with interests in the region given the overall weakness in the ipo market in the recent months pricing and quality of promoters will be paramount says munesh khanna ceo mdinvestment banking centrum capital however jc sharma md shobha developers believes one should look at the macro picture the real estate industry is still not getting proper representation in india in a developeddeveloping economy it constitutes 10 of the market cap of the country we still have a long way to go he told et