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Dewan Housing Finance Limited (DHFL) Misses Debt Payments, Shares End 6% Higher

DHFL stock price: At 10:23 am, DHFL shares traded 2.39 per cent lower at Rs 73.65 apiece on the NSE, underperforming the Nifty which was up 0.24%.

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Dewan Housing Finance Limited (DHFL) Misses Debt Payments, Shares End 6% Higher

DHFL share price: Dewan Housing Finance shares however recovered most of the losses in late morning deals

DHFL or Dewan Housing Finance Limited recovered all of intraday losses after plunging around 9 per cent in intraday trade on Wednesday, a day after the mortgage lender said it had made a 40 per cent payment on unsecured commercial papers due on Tuesday. In a regulatory filing late on Wednesday, Mumbai-based DHFL said: "Out of the aggregate amount of Rs 375 crore, Rs 150 crores i.e. 40 per cent has been paid on a proportionate basis and the balance amount of Rs. 225 crore shall be paid in next couple of days."
Here are 10 things to know about DHFL:
  1. DHFL ended 5.77 per cent higher at Rs 79.75 apiece on the BSE, after declining as much as 8.89 per cent to Rs 68.70 during the session, outperforming the benchmark Nifty index which finished 0.43 per cent higher. (Dewan Housing Finance share price)
  2. The country's non-banking finance companies sector has been struggling with a liquidity crunch, after a series of defaults at Infrastructure Leasing and Financial Services (IL&FS) last year triggered fears about contagion in the financial sector.
  3. Earlier this month, credit ratings agencies ICRA and Crisil categorised DHFL's commercial paper at default levels for missing bond payments.
  4. That marked the fifth rating cut on the company's paper by Crisil - a unit of Standard & Poor's - this year, and fourth by ICRA, an affiliate of Moody's.
  5. DHFL said on Tuesday that it would make the outstanding payment in the next few days "once the surplus cash flow position improves". (Also read: Dewan Housing Finance misses debt payments)
  6. Dewan Housing Finance also said it had met over Rs. 41,000 crore worth of liability obligations since September 2018. 
  7. “Without any recourse to fresh debt funding, a situation exacerbated by multiple rating downgrades, the Company met all its financial obligations through a combination of internal accruals, sell down of its loan assets and monetisation of non-core assets,” DHFL said in its regulatory filing.
  8. Dewan Housing Finance said it is "already in the process of selling down its loan assets including wholesale project loans to make good all its obligations and maintain its 100 per cent commitment to all its creditors as it has done since the liquidity crisis started in September 2018".
  9. It also noted that it “does not differentiate between secured and unsecured creditors and will continue to uphold its standing as one of the leading Housing Finance Companies of the country”.
  10. As of Wednesday's closing price, DHFL shares have declined 68.02 per cent so far this calendar year, and 88.04 per cent since September 2018.




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