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Dewan Housing share price extends losses on downgrade by ICRA, Crisil; hits fresh 52-week low

BusinessToday.In     June 7, 2019

Dewan Housing Finance Corporation (DHFL) share price extended losses for the third consecutive session amid domestic ratings agencies lowering rating on Rs 850 crore worth of commercial paper of DHFL to 'default' from 'A4' due to the mortgage lender's deteriorating liquidity condition.

Dewan Housing share price fell to a fresh 52-week low of 80.75%, down 14% from the previous close of 93.90 on BSE. Dewan Housing Finance share price has been falling for the last three days and is down 25.66% in the period. The stock opened at a loss of 2.45% at 91.60 level in trade today.

Dewan Housing Finance share price has lost 86.49% during the last one year and fallen 66.62% since the beginning of this year.

The rating of the company, which defaulted on a debt repayment earlier this week, has been removed from watch with negative implications by both the rating agencies. Crisil, in a note, 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. The NCDs are not rated by Crisil.

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 04, 2019." Icra added that given the stretched liquidity profile and limited visibility on fresh funding, the company is unlikely to be able to service its debt obligation with regard to commercial paper programme in a timely manner. The company has commercial paper (CP) worth Rs 750 crore maturing in June 2019 with the first repayment on June 7.

"With liquidity inadequate as on date to service debt and visibility very low on timely fund raising, we expect the CP to be in default on maturity," Crisil said.

Edited by Aseem Thapliyal

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