By CNBC-TV18 Mar 7, 2019 11:21:53 AM IST (Updated)
CARE Ratings downgraded long-term rating of DHFL's debts worth about Rs 1.13 lakh crore, saying that the company has made limited progress on sell down of builder book and inflows from securitization deals.
CARE Ratings on Thursday downgraded long-term rating of Dewan Housing Finance Corporations Ltd's debts worth about Rs 1.13 lakh crore, saying that the company has made limited progress on sell down of builder book and inflows from securitization deals.
Recommended Articles
View All
Budget 2023: Prioritising defence and innovation
Jan 31, 2023 IST4 Min(s) Read
Budget 2023—ESOP tax incentives drive start-up growth
Jan 31, 2023 IST6 Min(s) Read
Budget 2023: Focused investment in edutech and human capital must become an imperative
Jan 31, 2023 IST2 Min(s) Read
This Microsoft project is enabling the digital presence of low-resource languages
Jan 30, 2023 IST7 Min(s) Read
DHFL’s non-convertible debentures, non-convertible debentures (public issue), fixed deposit programme and long term bank facilities received "AA-" rating (Double A minus) from its previous "AA+" rating by CARE. As of March 6, 2019, the total debt of DHFL stands at Rs 1,13,623.92 crore.
DHFL shares fell as much as 4.9 percent to Rs 141.40 per share in early trade. At 10.55 AAM, the stock was down 2.15 percent at Rs 145.60 per share.
The rating agency said it will keep monitoring the progress of various initiatives, including a sale of builder portfolio, inflows from the retail pool securitization, and plans to explore strategic partnership and fresh capital infusion.
"Though current cash & liquid investments are sufficient to bridge the negative mismatches for next 2 to 3 months, any acceleration of debt obligations by lenders and/or any higher than anticipated withdrawal of deposits, may put further stress on the liquidity profile of the company," noted CARE.
In fact, DHFL’s wholesale loans (builder loans) has substantially increased to 20 percent of the outstanding loan book as on September 2018, which is the highest since 2017 when it was only 14 percent, added the rating agency.
DHFL termed the rating downgrade as non-merit based and entirely irrational, arguing that the company has taken several steps to re-establish normalcy into the business.
"We would like to reiterate that DHFL continues to honor timely repayments of all its financial obligations as it takes several steps to re-establish normalcy into the business," said DHFL in a statement.
DHFL said the company is well capitalized and have sufficient retail assets, which can be securitised further to preserve liquidity and service all its financial commitments.
First Published: Mar 7, 2019 10:33 AM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!