INSUBCONTINENT EXCLUSIVE:
DHFL shares: Till Friday's closing price, the stock has declined 66.52% so far this calendar yearDHFL or Dewan Housing Finance Corporation
Limited shares jumped as much as 10 per cent on Monday, recovering from recent losses after the downgrade of its commercial papers by credit
On the National Stock Exchange, DHFL shares soared as much as 9.84 per cent to trade at Rs 91.50 apiece at the day's strongest point,
compared to their previous close of Rs 83.30
On the Bombay Stock Exchange (BSE), the DHFL stock rose 9.46 per cent to touch an intraday high of Rs 91.40 apiece
Housing Finance said the action by ICRA and Crisil was "extremely surprising" as it had been making substantial efforts in ensuring no
defaults on repayment of its financial obligations.ICRA had cut its rating on the company's paper to "[ICRA]D" from "[ICRA]A4", while
Crisil downgraded to "CRISIL D" from "CRISIL A4+", implying that the company was in default or expected to be in default soon
That marked the fifth rating cut on the company's paper by Crisil this year, and fourth by ICRA.DHFL said it is "committed towards
ensuring repayment of all its obligations as well as onboarding the strategic partner for its business".The ratings downgrades underline the
problems in the country's non-banking financial company (NBFC) sector.The looming trouble at DHFL comes nine months after a series of
downgrades and defaults at another major NBFC, Infrastructure Leasing and Financial Services (IL-FS), shook stock markets and stoked
concerns of a malaise in the sector.RBI Governor Shaktikanta Das said on Saturday that the central bank would closely monitor the health of
required steps to maintain financial stability in the short-, medium- and long-term," he said.NBFCs typically raise short-term funds through
commercial paper and lend for long-term purposes such as housing loans
Concerns about the sector mean raising funds through commercial paper is becoming expensive and difficult.At 9:57 am, DHFL shares traded
6.48 per cent higher on the NSE, outperforming the benchmark Nifty index which was up 0.72 per cent.Till Friday's closing price, the DHFL
shares had declined 66.52 per cent so far in 2019.(With inputs from Reuters)
