The share price of Dewan Housing Finance Corporation (DHFL) rose nearly 10 percent on Tuesday as investors cheered NCLT's nod to Piramal Group's resolution plan. The stock rose as much as 9.8 percent to its day's high of Rs 22.85 per share.
The rally came even as the stock became worth literally 'zero' after the company said the shares will be delisted from the exchanges as part of the resolution plan.
''As part of the Resolution Plan, the equity shares of the Company are proposed to be delisted,'' said DHFL in an exchange filing.
The Mumbai bench of the National Company Law Tribunal (NCLT) cleared Piramal Group's resolution plan with certain conditions. The bench also rejected Kapil Wadhawan's plea to get access to a copy of the resolution plan.
Piramal's wholly-owned subsidiary, Piramal Capital and Housing Finance (PCHFL), has proposed to acquire DHFL for Rs 37,250 crore. The resolution plan includes delisting DHFL, writing off the equity, merging businesses into PCHFL.
Piramal Group's offer includes an upfront cash payment of Rs 12,700 crore to the creditors. The Group has also offered to pay Rs 3,000 crore of cash to lenders from interest earned on the existing cash on DHFL's books, and another Rs 1,000 crore for insurance stake, and Rs 1,000 crore additional cash for interest income.
The NCLT ruling will be subjected to final orders from the Supreme Court and the National Company Law Appellate Tribunal (NCLAT), which have DHFL’s former promoter Kapil Wadhawan's plea pending still.