Shares of Dewan Housing Finance Corporation (DHFL) on Thursday plunged by nearly 16 per cent as rating agencies downgraded rating of over Rs 1 lakh crore debt of DHFL. The scrip dived 15.86 per cent to close at Rs 93.90 on the BSE. During the day, it fell as much as 18 per cent to Rs 91.50 — its 52-week low level — even as mutual funds suffered a fall in net asset values (NAVs) of fixed income schemes.
The company’s market valuation also fell by Rs 555 crore to Rs 2,946 crore on the BSE. Care Ratings said it has downgraded DHFL’s bank facilities of Rs 42,713 crore, non-convertible debentures of Rs 46,655 crore, fixed deposits of Rs 8,940 crore and subordinated debt of Rs 2,205 crore to the ‘D’ category. The total liabilities of DHFL downgraded to the D category amount to Rs 102,563 crore, the rating agency said.
The downgrade of DHFL is expected to exacerbate the already parlous liquidity situation in the non-banking financial companies (NBFC) sector.
With DHFL missing interest payments on a set of outstanding bonds, several fixed income schemes have seen a fall in net asset value (NAV). Market participants say the mark-down for the schemes has been around 75-100 per cent of the value of the assets. Data from Value Research showed that till April, mutual funds invested around Rs 4,423 crore across 135 debt schemes in instruments issued by DHFL.
Crisil said the downgrade to ‘default’ or ‘D’ reflects delays in debt servicing by DHFL on some of its non-convertible debentures (NCDs) because of inadequate liquidity. The payments were due on June 4, 2019. In a separate note, Icra said the rating revision factors in further deterioration in company’s liquidity profile and delays in meeting scheduled debt obligation on June 4, 2019.