JAICORP "OVER"? what about other real estate stocks ?This post is regarding Real estate in india also , so kindly read completely for the effort i kept into writing this article
jaicorp
sold their sez zone at very discount price
its is a real estate company and its main asset was sez almost entire business
so investors lost trust in this company in future also we dont know what they will do to other sales if any,they might never show real value for any other sales also like many unlisted real estate companies
there is a saying
"once a crook is always a crook"
i dont know why sebi is not taking any action or how is it even legal , may sebi need to bring laws for real estate companies in such a way that investors evote in case of low value sale etc
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now the real dilema is that what if same practices are done by other real estate companies
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we know in india others see a guy doing illegal things and they also start doing thoes things or others will also start to exploit those loop holes
so others are also risky which have land bank stories
i.e is why land value is never included in book value in stocks and are traded at discount
//////////////////(and this is different topic about real estate in india, is real estate going to crash?)
however in india land prices are inflated in such a way that in USA , Europe, Canada, Australia,germany, etc have cheaper prices and better ROI
but why in india land prices are hyped ?
for example if you buy an acre of land for 2CR (crore) and give it to development
for 1 acre i take minimum count ,atleast you will get 30 2bhk apartments
lets say each sold for 30 lakhs
30*30=900 lakhs which is 9cr
construction cost say 4cr atmost still left with 5 cr , after land cost is taken off it will be about 3 cr profit still , so people assume this and are saying 1 acre here cost around 2cr ,
and all real eastate guys marketed people into buying apartments saying you can take house loan , or instead of paying rent you can buy on loan and can pay interest , this went so hype that people started to buy houses as investment than to live in that house ,
soon people started over construction apartments are build too much ,
people who thought apartment as investment thinking later it will appreciate the problem is when years pass on for the same price any guy who want to buy will buy a new apartment that to some what far from the city center as cities are expanding , and there will be lesspollution and they also think city will expand later and our land price will appreciate,
and however they will get it much cheaper so they prefer some what outside and people who bought as investments remains unsold and their value will keep depreciating with time
any country in world you go and look everyone prefers individual house only in india they are promoting apartments so that they get huge profits , but individual house are the best we do not lack land but people over hype prices that are costlier than USA, and greater fool theory is going on thinking someone will buy it for much higher prices
simply an agricultural land they say 2cr per 1acre but if you buy it 2cr and do agriculture you hardly get 20,000 rupees over 2cr so is the prices justified ?
road side lands are a different thing as they can be used to develop commercial real estate like you build a showroom and rent it ,so roi will be good
but in villages people are saying 2cr is so stupid they are assuming apartments case and are saying those prices so best thing is prefer individual house ,
unless its commercial real estate land value will not appreciate. so i think already realestate is overhyped do not when people will start to realize individal is house is better just like in other countries
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Here are list of some companies where like jaicorp people think they have land banks
and we dont know they might also do just like jaicorp did to their investors
if you know any please mention in comments if i missed any
BF Utilites
Bf Investments
Nesco
BBTC
Maharastra scooters
bombay dyeing
BDH
KCP
empire industries etc if you know any other please mention
Disclaimer- Just my view and opinion trade at your own risk not an investment advice
these are only for educational purposes
