DELHI: Shares of New Delhi-based realty majors DLF and Unitech came under heavy selling pressure on Wednesday, falling eight per cent each, the most in three months.
Market players said the sell-off could have been sparked by apprehensions of a Bharatiya Janata Party (BJP) -led alliance likely forming the next government.
While Robert Vadra, son-in-law of Congress President Sonia Gandhi, has been under a lens for his alleged land deals with DLF, Unitech has faced action from the Central Bureau of Investigation during the second term of the United Progressive Alliance government. Also, Unitech Managing Director Sanjay Chandra was in judicial custody over alleged arbitrary spectrum allocation to his company's telecom arm.
"It's logical to believe a BJP regime will be tough on Vadra, as well as DLF," said an analyst who did not wish to be named.
Unitech has exited its telecom business and is now focusing on real estate. Analysts say, uncertainty over which party might form a government and what its stand could be on the telecom scam probe might have caused a decline in the Unitech stock price.
The DLF shares ended 8.66 per cent lower at Rs 140.25, while Unitech slipped 8.32 per cent to Rs 15.86. The two stocks pulled BSE's realty index five per cent down on Wednesday, even as the benchmark Sensex recouped most of its losses to end 0.2 per cent lower than the previous close.
Both DLF and Unitech refused to comment. BJP leaders, however, have earlier said on record that they do not believe in being vindictive.
Analysts said profit-taking after a sharp run up in recent months could also have led to a fall. In the past two months, realty stocks have outperformed the broader market by a wide margin. Since March, the BSE realty index rose 22.5 per cent until Tuesday, against a 6.4 per cent rise in the Sensex.
"Going ahead, one needs to be cautious. A rational view suggests one should take an investment call in these stocks after election results, rather than taking a plunge now. The markets are already factoring in a positive poll outcome to some extent," said Vaibhav Sanghavi, director (equities), Ambit Investment Advisors.