MUMBAI: Dewan Housing Finance Corporation’s (DHFL) shares recouped on Monday, closing at Rs 393 with 11.8 per cent gain, as management came out with statements to calm the markets and assert that it had enough cash. DHFL said that the company has neither defaulted on any bonds nor has there been any delay in repayment.
The stock crashed 42 per cent on Friday on fears of liquidity after a mutual fund offloaded DHFL debt in secondary markets, triggering an overall crash in financial stocks.
In a regulatory filing on Monday, DHFL said it repaid commercial papers worth Rs 575 crore on Friday as per schedule and is repaying another Rs 400 crore.
DHFL said it anticipated the hardening of interest rates and accelerated borrowings from debt market raising Rs 10,945 crore from public bond issue and Rs 5,200 crore through private placement including masala bond this fiscal. It has also planned to cut its exposure to commercial paper as part of the overall borrowing plan.
Financials came in for rerating by some of the brokerages on Monday after stocks in the segment had recorded anywhere between 15-50 per cent crash from the yearly highs they had hit.
“Post recent events in debt markets, mutual funds and other debt market players may likely take a more measured and cautious stand on NBFCs,” Kotak Securities said in a research report. It flagged only a short-term pressure on the net interest margin of the companies as funding costs go up in a risk-averse market.
“In the context of current valuations, we see a case for several upgrades,” Kotak said, putting a buy on LIC Housing Finance and Shriram Transport Finance, and add-rating to Cholamandalam Finance and Mahindra & Mahindra Financial Services.