Profit

Crisil Downgrades Rs 850-Crore Dewan Housing Finance Commercial Papers

DHFL, as a strategic decision, did not resort to securitisation of readily available housing loans to prop up the liquidity levels, Crisil said.

 Share
EMAIL
PRINT
COMMENTS
Crisil Downgrades Rs 850-Crore Dewan Housing Finance Commercial Papers

Crisil said DHFL's liquidity levels are expected to remain low (representational image)


New Delhi: 

Ratings agency Crisil has lowered its rating of Dewan Housing Finance Corporation's (DHFL) commercial papers worth Rs 850 crore citing a more-than-expected reduction in the company's liquidity. In a statement on Monday, the agency said it reduced the rating to "A4+" from "A3+" 

The rating continues on "watch with negative implications", it added.

"The downgrade is driven by more-than-expected reduction in the company's liquidity because of further delays in fund raising from sell down of project finance loans and lower inflows from securitisation of non-housing loans," it said.

Crisil noted that DHFL, as a strategic decision, did not resort to securitisation of readily available housing loans to prop up the liquidity levels.

"Crisil also notes higher-than-scheduled liability repayments. Crisil believes there is heightened additional risk of unscheduled early redemption of NCDs. On the other hand, there is low visibility regarding timely fund raising," it said.

Consequently, DHFL's liquidity levels are expected to remain low with reduced cushion or buffer for upcoming cash outflow and with liquidity weaker than previously envisaged, sensitivity of timely receipt of funds from various initiatives has increased significantly, said Crisil.

The liquidity of DHFL dropped to Rs 2,775 crore as on April 30, 2019, including statutory liquidity ratio (SLR). On the other hand, scheduled aggregate cash outflows, including loan repayment and securitisation payouts, till July 2019, remain high, estimated at Rs 8,400 crore, Crisil said.

It, however, also said that DHFL's management continues to focus on induction of a strategic investor and securitisation of non-housing loan exposures and the initiatives remain critical for restoring market confidence, which will help build resource-raising ability.



Get Breaking news, live coverage, and Latest News from India and around the world on NDTV.com. Catch all the Live TV action on NDTV 24x7 and NDTV India. Like us on Facebook or follow us on Twitter and Instagram for latest news and live news updates.

NDTV Beeps - your daily newsletter

................................ Advertisement ................................

................................ Advertisement ................................

................................ Advertisement ................................

Top