Shares of housing finance companies rose up to 17 per cent in intraday on domestic bourses on Thursday after the Reserve Bank of India (RBI) permitted the extension of project loans for commercial real estate. The Monetary Policy Committee (MPC) of the RBI also said there will be no downgrade of commercial realty loans if delays are genuine.
Boosted by the development, shares of Indiabulls Housing Finance rallied as much as 17 per cent to hit an intraday high of Rs 323.70 after opening higher at Rs 276.75. There was spurt in volume trade as 56.50 lakh shares changed hands over the counter as compared to two-week average volume of 13.30 lakh shares.
Among others, share price of PNB Housing Finance was trading 5.82 per cent higher at Rs 448.35 apiece on the BSE. LIC Housing Finance shares were also trading over 8 per cent at Rs 438.40 on the BSE. Meanwhile, the BSE Sensex was trading at 166 points, or 0.41 per cent, higher at 41,309.
Other NBFC stocks such as HDFC, M&M finance, L&T finance rose between 1-7 per cent on the bourses.
RBI, in its sixth bi-monthly policy resolution, decided to permit extension of date of commencement of commercial operations (DCCO) of project loans for commercial real estate, delayed for reasons beyond the control of promoters, by another one year. The extension of one year will be without downgrading asset classification.This is a positive development for all the banks, NBFCs, HFCs with higher exposure to commercial real estate projects.
The RBI has proposed to release draft revised regulations on housing finance companies (HFCs) on the bank's website by the end of this month, for public comments. In August last year, the central bank had issued a statement saying that the central bank would carry out a review of the extant regulatory framework applicable to HFCs and issue revised regulations in due course. Currently, HFCs comply with the directions and instructions issued by National Housing Bank (NHB).
By Chitranjan Kumar