INSUBCONTINENT EXCLUSIVE:
After defaulting on its debt obligations, crisis-hit Dewan Housing Finance Ltd (DHFL) Friday said it is taking all necessary steps to meet
repayments within the seven-day grace period and prevent any future default
DHFL, the third-largest pure-play mortgage lender, has received rating downgraded on its Rs 850 crore worth commercial papers (CPs) to
default grade by Crisil and ICRA due to delay in meeting its obligations
The mortgage lender had defaulted on bond repayments on June 4
The company said there has been delay in payment of interest on non-convertible debentures issued by the company through public issue
"The company is taking all necessary steps and shall ensure the payment of the due interest within the cure period of 7 days as prescribed
under the respective trust deeds pertaining to the said NCDs," it said in a regulatory filing
DHFL said it will make necessary disclosures at appropriate time
However, a day-ago, DHFL expressed surprise on the rating downgrade on its debt instruments saying it has been making and continues to make
substantial efforts in ensuring no defaults on any instruments
"These actions are unwarranted and the company is seeking clarification on the rationale that predicts DHFL's inability to service
pay-outs on the due dates
Such speculative rating rationale is not adequate," the housing finance company said Thursday
Besides, DHFL has repaid close to Rs 40,000 crore of financial obligations since September 2018, it said
To ensure adequate liquidity to meet the repayments, DHFL also sold its strategic retail assets including Aadhar, Avanse and DHFL Pramerica
Following the rating action, shares of DHFL plummeted nearly 16 per cent Thursday
Its shares fell as much as 11 per cent on Friday
Crisil in a note on Wednesday said the downgrade to 'default' or 'D' reflects delays in debt servicing by DHFL on some of its
non-convertible debentures (NCDs) because of inadequate liquidity
The payments were due on June 4, 2019
In the bi-monthly monetary policy review Thursday, RBI Governor Shaktikanta Das had said that the regulator was keenly watching the
developments in the non-banking financial companies (NBFCs), ensuring there was ample liquidity in the system to mitigate any challenges
The country's largest lender SBI too stepped into action saying it was closely monitoring its exposures to the NBFC sector for the past
many months and taking all steps necessary to safeguard its interests
As of March 2019, SBI had an exposure of Rs 1.87 lakh crore to the NBFC sector, which has been in trouble since ILFS went belly up last
The bank has been receiving queries on the impact of the developments in accounts like DHFL, could have on the bank and on the financial
Stock of DHFL closed down by 11.08 per cent to Rs 83.50 on the BSE.