The benchmark BSE Sensex has soared past 13,500 and most stocks are on fire, but nowhere is the hype as intense as in the realty market. Nearly 80 to 100 companies plan to raise public money and there is a clear vested interest in keeping investor sentiment charged up. As a result, it is difficult to tell the difference between irrational exuberance and brazen manipulation. The stock of a sick company like Nirlon has jumped from Rs 16 to Rs 48 and is hitting the upper circuit in minutes after trading begins, apparently because of its huge land holding in Mumbai; and an active grey market has developed in the IPOs of Sobha Developers and Parsvnath Developers. Meanwhile a regional developer with global aspirations and a foreign partner wants to raise upwards of Rs 1,200 crore of public money. The Securities and Exchange Board of India (Sebi) tells us, "There are no internal rules regarding disclosure of land banks by realty companies". This was in the context of Sobha Developers which told Sebi that its strategy of acquiring small plots of land made the data about sellers too "voluminous" to reveal all names. It only disclosed "number of sellers, consolidated payments made for land and amount outstanding on location basis". Further, "instead of affirmation to the effect that the land is free from all encumbrances, disclosure has been made about the procedure followed for verification of title deeds and also about status of title on lands". Sobha also has certain private companies as subsidiaries for land holding where two key managers are shareholders. Clearly, all this is difficult for ordinary investors to understand, making realty IPOs an ideal sector for mandatory IPO grading. As Sebi told us, "public issues by realty companies is a recent phenomenon and disclosures in respect of such companies are getting evolved and there is an attempt to constantly improve upon disclosures based on offer documents filed by different issuers".

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