Dewan Housing Finance, IL&FS Shares Rise 15%

Housing finance company DHFL and construction major IL&FS, which triggered the sudden fall in markets on Friday, traded with gains on Monday. At 10:50 am, Dewan Housing Finance Limited or DHFL stock price was at Rs 403.60, up Rs 52.05 or 14.81 per cent on the Bombay Stock Exchange (BSE). IL&FS stock price was at Rs 14.05, with a gain of Rs 1.80 or 14.69 per cent on the BSE. On Friday, DHFL had plunged 43 per cent on reports of default on bond payments and alleged exposure to debt-hit IL&FS.

The DHFL management had then sought to reassure investors by saying, "We wish to categorically state that DHFL has not defaulted on any bonds or repayment nor has there been any single instance of delay on any of its repayment of any liability. We do not have any exposure with IL&FS. DHFL continues its loan growth disbursements in the affordable housing segment going forward."

IL&FS and its associates owe a debt of $12.5 billion, of which $500 million is due over the next six months. It is, however, facing a cash crunch as it has only $27 million of liquidity at hand. This has led to a debt-repayment crisis that threatens to engulf banks, mutual funds, insurance and pension funds.

The government, however, said on Monday that it will ensure liquidity in mutual funds, non-banking housing companies (NBFCs) and small and medium enterprises (SMEs).

In Monday's trade, however, only DHFL shares - out of a total of 16 housing finance companies' shares - traded in the green on the BSE, whose benchmark Sensex was down 172.34 points to 36,669.26 by 11 am.

On Friday, NBFCs led a panic selloff on Dalal Street as the Sensex tanked over 1,100 points before closing 279 points lower 36,841.