Compat asks CCI to review antitrust case against DLF

New Delhi/Bengaluru: The Competition Appellate Tribunal (Compat) on Friday asked the antitrust regulator to review its order declining to investigate whether DLF Universal Ltd and DLF Home Developers Ltd were in a dominant position in Delhi’s luxury residential apartments market and had abused their position to influence consumers.

The Compat order is in response to an appeal by Ess Cee Securities Pvt. Ltd and Signature Securities Pvt. Ltd against an earlier decision of the Competition Commission of India (CCI) to close the case.

The tribunal said CCI had not accurately defined the relevant product market, which is an important consideration for analysing the impact of anti-competitive conduct.

CCI, in its 2015 order, noted that DLF Ltd was one of many real estate developers engaged in the development and sale of residential apartments in Delhi. It observed that these developers—including Delhi Development Authority, Ansal API, Umang Realtech, Emaar Group, CGHS Group and Parsvnath Developers—appeared to pose competitive constraints to DLF in the relevant market.

Compat went on to define the relevant product market as “the provision of services relating to development and sale of high-end luxury residential apartments in Delhi”.

A DLF spokesperson said the law would take its course.

The Compat order means CCI will have to reopen the case and assess whether DLF Universal and DLF Home Developers are dominant in the market for luxury residential projects in Delhi and whether they abused their dominant position.

DLF on Friday reported that net profit for the three months ended September remained unchanged at Rs206.09 crore, from the year-ago quarter.

Revenue at India’s largest property developer rose marginally by 1.5% to Rs2,070.67 crore in the fiscal second quarter.

Sequentially, DLF’s net profit was 21.16% lower. This was because in the June quarter of fiscal 2016, the company’s net profit included a one-time extraordinary gain of Rs372 crore from the sale of DT Cinemas to multiplex owner PVR Ltd.

DLF’s sales volumes at a pan-India level were muted in the second quarter, despite a marginal price correction in some pockets.

The National Capital Region remains under pressure, while Mumbai continues to see sales volume only in select projects, according to an October report by Elara Securities Ltd.

Shares of DLF Ltd gained 1.41% to close at Rs114.90 apiece on Friday on the BSE, while the benchmark Sensex gained 0.2% to close at 26,747.18 points and the realty index gained 1.62% to close at 1298.50 points.