DHFL shares fell 4.9% in the trade today after apex bank Reserve Bank of India (RBI) superseded the board of Dewan Housing Finance Corp. Ltd (DHFL) and appointed an administrator in its place, in a move to initiate an insolvency process of the debt-laden mortgage lender by approaching the National Company Law Tribunal (NCLT). RBI cited governance concerns and payment defaults by DHFL as the reasons for superseding the board.
The share price of DHFL opened 4.9% lower at day's low of Rs 19.15 on Bombay Stock Exchange, against its previous closing value of Rs 20.15. Today's low of Rs 19.15 is mere 4 points away from the HFC's 52-week low, registered at Rs 15.15.
DHFL share price has eroded 23% value in the last 6 sessions of straight fall. Dewan Housing Finance shares currently trade lower than 5, 20, 50, 100 as well as 200-day moving averages. Dewan
Volume-wise, 11 lakh shares on BSE and 65 lakh shares on NSE changed hands, both higher than 5, 10 and 30-day average volume traded.
DHFL is the first Housing Finance Company (HFC) or non-banking finance company (NBFC) to be sent to the bankruptcy court, under new rules notified by the government on 15 November.
The RBI has also appointed R Subramaniakumar, ex-MD and CEO of Indian Overseas Bank, as the administrator of DHFL. DHFL, one of the biggest defaulters in the country currently owes almost Rs 1 lakh crore (over $14 billion) to its debtors.
According to the changes to the Insolvency and Bankruptcy Code (IBC) released by Corporate Affairs Ministry on November 15, the apex bank can move the resolution of NBFCs with assets of at least Rs 500 crore or more to the bankruptcy court for proceedings, under Section 227 of IBC.
In September, DHFL had proposed a resolution plan where lenders would be given a 51% stake in the company after converting debt to equity.