HYDERABAD: Shares of beleaguered Indiabulls Housing Finance Ltd (IBHF) suffered a double blow on Monday. The twin shocks of the Delhi High Court probe ordered into allegations of fraud at IBHF and the Reserve Bank of India’s Prompt Corrective Action initiated on Lakshmi Vilas Bank, with which the housing finance entity proposed a merger, battered shares of all group companies.
While shares of IBHF plunged 38% — the biggest single-day decline since its listing in July 2013 — other group stocks also hit the lower circuit. In all, the four listed Indiabulls group firms shaved off `8,000 crore in market cap Monday. The IBHF scrip touched a five-year low of `250.10 on the BSE as traders queued up for a selloff frenzy following the court order. It opened with a loss of 6.79% at `363 and crashed 38% further to touch a low of `240.10 during the intra-day trade. The previous trading session, it closed at `389.45. Excluding Monday’s session, the scrip fell nearly 30% over the past five sessions.
Following RBI’s restrictions last Friday on LVB, its shares hit the 5% lower circuit on Monday, piling pressure on IBHF over fears of the merger plan hitting a roadblock. The merger was considered a win-win for both, with IBHF getting access to a bank and LVB coming under a capitalised financial institution. According to Icra, as of June 2019, IBHF’s cash and cash equivalents stood at `28,511 crore, providing a 12-month cover for its debt repayments.