DHFL crisis explained: On July 14, the housing finance company reported a net loss of Rs 2,223 crore for the fourth quarter (Q4) of 2018-19. The result was in stark contrast to Rs 134 crore of net profit that DHFL reported in the same quarter of the previous fiscal year (2017-18).
FILE PHOTO: A woman walks past a signboard of Dewan Housing Finance Corporation Ltd. (DHFL) outside its office on the outskirts of Mumbai, India, January 31, 2019. REUTERS/Francis Mascarenhas/File Photo A woman walks past a signboard of Dewan Housing Finance Corporation Ltd. (DHFL) outside its office on the outskirts of Mumbai, January 31, 2019. (Reuters Photo: Francis Mascarenhas)
Dewan Housing Finance Corporation (DHFL), a major housing finance company, has been in the news for all the wrong reasons. Its stock price has fallen by around 90 per cent over the past year and there are apprehensions about the viability of the company even as it is in the process of figuring out how to come out of its financial troubles. Here’s why you should care.
DHFL crisis explained: What is the latest trigger?
On July 14, Dewan Housing Finance Corporation (DHFL), a housing finance company, reported a net loss of Rs 2,223 crore for the fourth quarter (Q4) of 2018-19. The result was in stark contrast to Rs 134 crore of net profit that DHFL reported in the same quarter of the previous fiscal year (2017-18). Not surprisingly, the full-year results also showed a massive decline. The company posted a net loss of Rs 1,036 crore in FY 19 when it in FY 18, it had announced a net profit of Rs 1,240 crore.
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Alongside its latest results, Kapil Wadhawan, Chairman and Managing Director, DHFL, said: “In the backdrop of a significant slowdown in disbursement and loan growth post September 2018, the financials of the company have been quite strained for the quarter impacting the overall performance of the year”.
In other words, the company has struggled to forward any new loans even as their existing loans are turning into non-performing assets (NPAs). DHFL’s gross NPAs have risen to 2.74 per cent in the fourth quarter of the last financial year as against 0.96 per cent during Q4 of FY18.
DHFL’s troubles started after another big non-bank financial company — Infrastructure Leasing & Financial Services (IL&FS) — defaulted on its debt obligations in September 2018. IL&FS was found to be afflicted with a serious asset-liability mismatch, and its performance resulted in many investors in the NBFC sector to hit the pause button for fresh investment. DHFL’s finances, too, suffered as a result of declining investments and rising demands for meeting its obligations. Essentially, since September last year, DHFL has been playing catch up on its financial obligations. That too without fresh money to count on and worsening loans portfolio.
What is at stake?
As of Q4 FY 19, DHFL had almost Rs 1.2 lakh crore of assets under management. DHFL’s financial health is a matter of concern for even the common man because some of the biggest investors in DHFL are public sector banks and mutual funds. If DHFL was to struggle in paying back, the loss would be spread across the financial world.
Wadhawan says DHFL in the process of submitting its resolution process under the inter-creditor agreement as entered into by banks. The terms of a resolution will be finalised by July 25. DHFL is also trying to identify a strategic investor to bring in fresh equity.
Udit Misra is Senior Associate Editor at The Indian Express. Misra has reported on the Indian economy and policy landscape for the past two decades. He holds a Master’s degree in Economics from the Delhi School of Economics and is a Chevening South Asia Journalism Fellow from the University of Westminster.
Misra is known for explanatory journalism and is a trusted voice among readers not just for simplifying complex economic concepts but also making sense of economic news both in India and abroad.
Professional Focus
He writes three regular columns for the publication.
ExplainSpeaking: A weekly explanatory column that answers the most important questions surrounding the economic and policy developments.
GDP (Graphs, Data, Perspectives): Another weekly column that uses interesting charts and data to provide perspective on an issue dominating the news during the week.
Book, Line & Thinker: A fortnightly column that for reviewing books, both new and old.
Recent Notable Articles (Late 2025)
His recent work focuses heavily on the weakening Indian Rupee, the global impact of U.S. economic policy under Donald Trump, and long-term domestic growth projections:
Currency and Macroeconomics:
"GDP: Anatomy of rupee weakness against the dollar" (Dec 19, 2025) — Investigating why the Rupee remains weak despite India's status as a fast-growing economy.
"GDP: Amid the rupee's fall, how investors are shunning the Indian economy" (Dec 5, 2025).
"Nobel Prize in Economic Sciences 2025: How the winners explained economic growth" (Oct 13, 2025).
Global Geopolitics and Trade:
"Has the US already lost to China? Trump's policies and the shifting global order" (Dec 8, 2025).
"The Great Sanctions Hack: Why economic sanctions don't work the way we expect" (Nov 23, 2025) — Based on former RBI Governor Urjit Patel's new book.
"ExplainSpeaking: How Trump's tariffs have run into an affordability crisis" (Nov 20, 2025).
Domestic Policy and Data:
"GDP: New labour codes and opportunity for India's weakest states" (Nov 28, 2025).
"ExplainSpeaking | Piyush Goyal says India will be a $30 trillion economy in 25 years: Decoding the projections" (Oct 30, 2025) — A critical look at the feasibility of high-growth targets.
"GDP: Examining latest GST collections, and where different states stand" (Nov 7, 2025).
International Economic Comparisons:
"GDP: What ails Germany, world's third-largest economy, and how it could grow" (Nov 14, 2025).
"On the loss of Europe's competitive edge" (Oct 17, 2025).
Signature Style
Udit Misra is known his calm, data-driven, explanation-first economics journalism. He avoids ideological posturing, and writes with the aim of raising the standard of public discourse by providing readers with clarity and understanding of the ground realities.
You can follow him on X (formerly Twitter) at @ieuditmisra
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