Post-issue, the DLF stock is by all indications, set to join the Sensex. Its cousin Unitech (trading around Rs 550), is unlikely to be left behind. Their combined weight in the Sensex is expected to be around 2.27 per cent. This is based on the current price of Unitech and the higher of DLF’s Rs 550 price band.

The number could be higher - given the relative fundamentals of the two companies, I expect DLF to settle at a higher price. Comparing valuations, DLF’s price-earnings multiple, given its quality of land banks, the expanse of business and brand value, should come at a 20-25 per cent premium over Unitech’s, but we await the market for ‘price discovery’.

Raising Rs 9,625 crore based on an issue price of Rs 550, DLF would be India’s largest IPO. At this price, with a market capitalisation of around Rs 96,000 crore, DLF would be India’s eighth most valued company, between ICICI Bank (Rs 84,000 crore) and Reliance Communications (Rs 104,000 crore) and its 10 per cent free float would enable it to influence the Sensex to the extent of 1.04 per cent, more than ACC (1.02 per cent), Maruti (1.01 per cent), Reliance Energy (0.94 per cent), Dr Reddy’s (0.89 per cent)and Hero Honda (0.77 per cent).

Country cousin Unitech - the company has 64 per cent of its land banks in non-metros than DLF’s 75 per cent, according Sharekhan - which, at Rs 46,000 crore, is valued at less than half of DLF, is India’s 17th most valuable company. But it will carry a higher weight in the Sensex than DLF. Because of its higher public share holding of 25 per cent, its Rs 11,000 crore free float would give it a weight of 1.23 per cent - this would add Ranbaxy (1.10 per cent) and Cipla (1.19 per cent) to DLF’s list (above).

... contd.