Need to probe Indiabulls trust

THANKS are due to BT from the small suffering investors for highlighting the conspicuous events concerning Indiabulls Property Investment Trust ("What went wrong with Indiabulls Property Investment Trust?", BT, Aug 15).

IPIT's initial public offer in Singapore in 2008 priced at S$1.00 raised some S$260 million, valuing the trust for office and retail properties in India at a whopping S$2.3 billion at inception. Then a rights issue at a mere S$0.16 quickly followed in 2009. One can't help thinking now that the rights issue was a planned sequel to the IPO - not because of unexpected business exigencies that might have arisen later.

This raises a vital question: how much were the properties valued at IPO compared with the current valuation that is the basis of the buyout at S$0.25 (S$0.05 before share consolidation)? If it is the same portfolio of properties, it would suggest that the incredible collapse from an IPO price of S$1.00 to a pittance buyout at S$0.05 is because of a horrid collapse of real estate in India from 2008 to 2016 - which is hardly the case. Either the valuation in 2008 or the current one is grossly incorrect. If some properties have been sold since then, what were the profits or losses? Further, the rosy forecast dividends for 2009 and 2010 were not paid.

IPIT is in the business of owning commercial real estate and leasing it for predictable, recurrent income - a traditional business not exposed to the volatile caprice of tech startups or the secular decline of the oil-and-gas sector. How its (concrete) assets can dissipate so fast should compel more than the cursory interest of the Singapore Exchange. Also, what is the opinion of the Securities Investors Association (Singapore)?

While it is ultimately caveat emptor for the investing public, stringent standards must be applied while accelerating and increasing the number of public listings here.

Andrew Tan

Read more: Indiabulls trust clarifies issues raised in BT column

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