NSE Symbol: UNITECH | BSE Code: 507878
Unitech was consolidated on 9th February as United Technical Consultants Pvt. Ltd., and it was transformed into a public company on 3rd October. The company takes over industrial projects on a turnkey basis and it also executes housing projects and export orders.
Unitech Share: History and Trends
In 1985, the company was renamed to Unitech Ltd and the company was developed by a group of technocrats, who were skilled in the field of foundation engineering and soil which is managed by professionals. The Company was involved in projects which were located both in India as well as abroad. Out of the total shares which were issued till date, 1,00,000 of the shares were issued as bonus shares.
In 1986, additional contracts for water supply and sewage works at Hun and a mosque at Sokna were also taken up by the Company.
In the same year, the Company also received the contract for maintenance work for six school buildings near Tripoli, Libya. The Company also signed a treaty with the Libyan Authorities for construction of 270 houses at Wadan. The Company also launched a real estate mini-city - the South City and a similar one at Rae-Bareilly, which is situated in the south of Lucknow. The company also signed multiple contracts with different companies to construct multi-storeyed buildings and apartments. In February, the Company issued 14,10,000 equity shares of 10 rupees each with a dividend worth Rs.6 per share. Fifteen percent of the secured non-convertible and debentures worth Rs.100 each of which the following shares was reserved for distribution on a preferential basis:
(i) 70,500 of the equity shares associated with 10,575 debentures were provided to the employees
(ii) 28,200 of the equity shares connected to 4,230 debentures were given away to business associates of the Company. Around 64,500 shares linked to 9,675 debentures were taken up by the above segments. The remaining 13,11,300 of the equity shares associated with 5,130 debentures which were not taken up under this preferential quota were issued to the public. An additional 3,52,500 shares associated with 52,875 debentures were distributed to maintain the levels oversubscription.
The debentures under both schemes, both cumulative and non-cumulative were supposed to be purchased at a premium of 5% of the face value in three annual installments of Rs.40, Rs.30 and Rs.35 respectively with an expiry of 6th, 7th and 8th year from the date of allotment of the debentures.
40,30,000 premium shares were issued in prop. 2015, 100 on 1st January 1986. In February 1986, 14,10,000 of the total shares were issued to the public linked to 2,11,500, which equates with 15% of the total number of non-convertible debentures.
1987 - The Company secured major orders for construction of Okhla Sewage treatment plant in Delhi, the capital of India, which is valued at eight crores and a steel melting shop at Vizag Steel Plant estimated to be 16 crores.
Also, the additional contracts for water supply and sewage works at Hun and a mosque at Sokna were also awarded to the Company.
The Company obtained further licenses from the Haryana Government for development of its residential township near the Delhi-Haryana border.
In 1988, Other projects secured during the period were the development of chimney for Dadri Thermal Power Station of NTPC, which is a 300 meter tall TV Tower at Jaisalmer, Rajasthan and a pile foundation work for Durgapur Steel Plant.
The Company commenced implementation of a five-star deluxe hotel project in Agra, which is situated near Delhi. The company ventured into a technical collaboration contract with Ramada Inn Chain, for the hotel project.
In 1989, The projects bagged during this year include the construction of superstructure for the main powerhouse and auxiliary building for BHEL located in Bihar, construction of industrial buildings for J.K. Tyres at Gwalior, M.P., modernization of slab casting shop for TISCO, Jamshedpur and building the residential complex township for Chambal Fertilizers Ltd., in Kota, Rajasthan.
The Company was bestowed with two major projects for laying 66 KV transmission lines.
The company also signed contracts for executing sizeable real estate projects in Delhi, Bangalore and Gurgaon in the same year.
The Company decided to launch the construction and sales of multi-storeyed apartments at Firozshah Road in New Delhi.
A contract was approved with the Kazakh Republican Council and their associates for a joint venture for a renovation of the existing hotel at Medeo at Alma Ata (USSR) to 5-star deluxe standard. The primary aim of the joint venture was to build a new block of high-end rooms to carry out the operations and management. A Joint venture Company with the name Benetone Unitech Co. Ltd. was incorporated in Thailand to undertake development and construction projects. The joint venture looked over the development and construction of a 35 storeyed luxurious residential complex.
In 1990, the Company secured jobs for the construction of container depot for Container Corporation of India in Tughlakabad, Construction of HUDCO Bazar for HUDCO at New Delhi, modernization of Kalyanpur Cement Ltd., in Rohtas, Bihar and construction of mass houses for CIDCO at New Mumbai.
The Company had received a request for developing a project for the construction of a transmission station in collaboration with a Yugoslavian Company.
In 1991, The Company offered 36,04,300 equity shares of Rs.10 each at a premium of 15 rupees per share on Rights basis in the ratio of 1:2. At the same time, 1,80,215 equity shares of Rs.10 each at a premium of 15 rupees were held for allotment to the employees (additional 74600 No. of equity shares taken up). Unitech Exports Ltd., Unitech Metals Ltd., Supernal Corrugation (India) Ltd., Ruhi Construction Co. Ltd., Unitech Industries Ltd., New India Construction Co. Ltd., Unitech Builders Ltd., and Unitech Investments are wholly owned subsidiaries of the Company.
In 1993, 36,78,900 equity shares were allotted on the right basis.
In 1994, The Company signed a Memorandum of Understanding with Singapore Consortium and Haryana Urban Development Authority for setting up Technology Park in Gurgaon. The company also negotiated for tie-ups with many companies to enable the bidding for highway construction projects. In the same year, 16,00,000 equity shares of Rs.10 each allotted for each at a premium of 82.5 rupees to II Foreign Institutional Investors.
In 1995, the Company subscribed into a partnership with Resources Development Corporation Ltd., Singapore and Comcraft Asia Pacific Pte Ltd., to set up automatic block plants at New Mumbai and concrete plants at Powai, Goregaon and South City.
The assembling plant at Goregaon, Mumbai was fully computerized state-of-the-art imported plant which had a capacity of 100 cubic meters per hour. The Company also offered to develop a state of the art quarry in New Mumbai to produce a million tonnes of aggregate per year. In the same year, the Company signed a Joint Venture contract with Haryana Urban Development Authority and First Capital Property Ventures Pte.Ltd. For developing a technology park at Gurgaon. In the same year, the Hyundai Unitech Electrical Transmission Ltd also became the subsidiary of the company.
In 1996 the Company handed over ownership of many apartments in the Heritage Estate in Bangalore, Legacy Complex in Lucknow and, Sunbreeze Tower-III.
In 2005 Unitech surged its staked to buy in a Pantaloon subsidiary. Unitech also formed a joint venture with Hyundai in the same year.
In 2006, Unitech joined the top-30 market cap league in the country. It also got the biggest land deal. In the same year, the company decided to set up an SEZ in West Bengal. It also entered into a supplemental agreement with IST Ltd for the development of Software/IT Park in Gurgaon. In the same year, Unitech gave a bonus in the ratio of 12:1. The company also split its face value of shares from 10 to 2 rupees.
In 2007, the company issued bonus shares in the ratio of 1:1. The company acquired the Vizag tract for 3328 crores.
In 2008, Unitech entered a joint venture with Ruby Mills
In 2010, Unitech launched Unitech Wireless. It also generated venture capital worth 300 crores for raising funds for its slum development projects
In 2011, the development of Unitech known as InfoPark was given a silver rating by the Indian Green Building Council. Unitech also launched Crestview Apartments in Gurgaon. Ramesh Chandra, the Chairman Unitech Ltd, was recognized with the Lifetime Achievers' Award for Outstanding Contribution to the Real Estate Sector. Unitech also launched two new projects in Chennai, known as Chaitanya and Ekanta. The company launched Unihomes in Ambala. It was ranked amongst the 15 fastest growing companies.
In 2012, the company inaugurated a night gofing luxurious residential project in Noida. Unitech Infospace in Sector-21, Gurgaon started a new Amenity-Block (with a world-class food-court, fitness club and other facilities). Unitech also launched the Gardens Galleria Mall, Noida. In the same year, Unitech launched luxury villas in Bangalore.
In 2013, Unitech signed Rs 1,000 cr worth office leasing agreement with Accenture.
In 2014, the Canadian asset management firm Brookfield Asset Management sought to acquire 100% stake in Unitech Corporate Parks, which is a London Stock Exchange-listed investment firm.
Understanding the risks and return that could impact the investors is very important. There are two types of risks that primarily affect stocks like Unitech in the market. The first risk is the loss of opportunity cost linked by investing in a low performing stock, which can be avoided easily by diversifying your portfolio. The second kind of risk is the market risk, which arises from the macroeconomic factors that affect all the stocks in the market.
The volatility of Unitech stocks has been high since the 2008 crisis. Investors may be attracted to invest in Unitech primarily due to its low selling value in the market but the only way of getting returns from this share is in the times of economic growth which can only be obtained by holding on to the stock in the low times. The low fixed cost also grants high flexibility to the shares so that it can preserve margins even in downturns. However, investors must take into account the composition of their portfolio before investing in Unitech share.