INSUBCONTINENT EXCLUSIVE:
Mumbai: Shares of Dewan Housing Finance (DHFL) crashed 42% Friday on concerns that it could default
on outstanding bond re-payments,
with many in the equity markets holding the belief that exposure to troubled financier ILFS could further stretch the finances at the
mortgage lender.
Shares of the company, which helps many Indians step on to the property ladder for the first time, began plunging around
noon when DSP Mutual Fund sold about ?300 crore of DHFL papers at 11% in the secondary market
The sale triggered concerns of tight liquidity, spotlighting the potential inability of the home financier to raise funds at lower rates.
As shares of the entire home-financing sector went into a tailspin, dragging the broader markets with them, the DHFL management spoke to the
media to underscore the financial soundness of the company, denying prospects of a default
8.18%, LIC Housing 5.05% and PNB Housing Finance 4.92%
private placement of non-convertible debentures earlier this month at 9.25%.
Wadhawan said that ILFS has been a contagion issue and would
surely impact the perception for the industry
He said that Dewan Housing Finance has sufficient liquidity to take care of any redemptions for the rest of the year
commercial papers and securitisation
shall be about 6% of our total borrowings and the total assets and liability book is over ?1 Lakh crore
We will remain cash surplus even after considering repayment till March 2019 of all our liabilities on account of CP, NCD, interest payment,
31 banks, NCDs, CPs, ECB and masala bonds
said Wadhawan.
Dewan Housing Finance shares closed at ?351.55 on the Bombay Stock Exchange, down 42.43%.
Stretched finances at the ILFS
Group have investors worried about a liquidity crisis in the financial sector
