Indian property developer DLF Ltd., which is relaunching its initial public offering (IPO) to raise a lower-than-expected $2.4 billion, expects real estate prices to be steady, a senior official said on Tuesday.

"I don`t think there is any bubble, neither will it burst," DLF Vice-Chairman Rajiv Singh told Reuters on the sidelines of a media conference.

India`s booming market has seen property prices double in the last two years as the economy, growing at more than 9 percent a year, boosted demand for shopping centres, offices and homes.

However, demand for homes has slowed down after a sharp rise in interest rates and some analysts and fund managers say prices may drop up to 40 percent in the short to medium term.

Singh said he expected prices to mostly hold at current levels.

"I think prices will remain steady around levels of today. There could be upward or downward movement, depending on location," he said.

DLF is selling 175 million shares, or 10.27 percent of the company, at a price band of 550-550 rupees each. Subscription opens June 11-14.

The New Delhi-based company expects to spend 35 billion rupees from the IPO to buy land, Singh said.

The offering will be India`s largest IPO to date, above top software firm Tata Consultancy Ltd., state-run utility NTPC Ltd. and energy firm Cairn India Ltd., all of which had raised just under $1.2 billion.

Last year, DLF scrapped its plans for a public issue after a stock market meltdown and some disputes with minority shareholders.

At that time the IPO was expected to raise up to $3.5 billion.

India`s most valuable listed real estate firm, Unitech Ltd., reported on Monday its earnings for the fiscal fourth-quarter ended March jumped more than 10 times as it sold more properties and expanded to new markets.

DLF, which has developed 20.4 million sq metres of property, is expected to exceed Unitech`s market value of about $11 billion.

Kotak Mahindra and DSP Merrill Lynch are the lead arrangers for the issue, with Citigroup, Deutsche Bank, ICICI Securities, Lehman Brothers, UBS and SBI Capital Markets.