MUMBAI: The shares of Dewan Housing Finance Limited (DHFL) crashed by over 17 per cent on Wednesday’s opening trade after news reports said that the company will not accept new fixed deposits or renew existing deposits. DHFL shares opened lower at Rs 116.95 from the previous close of Rs 129.90, hit a day’s low of Rs 107.15. At the end of the trade, it was down 9.43 per cent at Rs 117.65 on BSE.
DHFL, in a regulatory filing, said that the company has stopped acceptance and renewal of FDs due to the recent revision in the credit rating of fixed deposits programme of the company, which is below the minimum rating prescribed under the NHB (National Housing Bank) guidelines. Rating agencies such as CRISIL, ICRA, CARE and Brickwork downgraded the company’s ratings.
On May 18, the company informed stock exchanges of Brickwork Ratings downgrade – Rs 12,000 crore FD programme was downgraded from BWR FAA- to BWR F Triple B Plus (Credit Watch with Negative Implications) among other instruments that went through rating revisions. Reasons given for the downgrade was that there was “limited progress in building up of liquidity, selling/existing riskier construction finance loans and delay in announcing a strategic investor for DHFL”.
Strapped for liquidity, DHFL stock has been a witness to severe drubbing on bourses ever since the September credit events that has shaken many in the NBFC and housing finance sectors. The group had in the past announced stake sale in Avanse Financial Services, education-focused NBFC to Warburg Pincus, exited mutual fund business selling stake in DHFL Pramareica to its partner Prudential Financial and sold 70 per cent stake in affordable housing finance firm Aadhar Housing to private equity player Blackstone.
What has been a worry to the market is also the news that the company will not honour any premature withdrawal except in cases of contingency. While the DFHL filing has been silent on the issue, PTI, quoting sources, said that in order to reorganise its liability management, premature withdrawal of deposits has also been put on hold. “This is completely under NHB regulation,” it said.