Shares of Indiabulls Housing Finance ended 14 percent higher on Thursday after the rating agency reaffirmed its long-term and short-term ratings.
The company, in a BSE filing, said that Crisil has revised the rating due to fundraising challenges. However, the rating agency reaffirmed the long-term rating of the company at 'CRISIL AA+' and short-term rating at CRISIL A1+'
It added that the watch resolution of negative outlook follows the announcement of RBI not approving the merger with Lakshmi Vilas Bank.
At the opening, Indiabulls Housing Finance shares hit a 52-week low of Rs 165.95, falling 4 percent from its previous close. Later, the stock rebounded and hit a high of Rs 204 per share on BSE, rising 23 percent. In intraday deals, the stock has surged as much as 18 percent.
Crisil also noted that the company continues to maintain strong liquidity with cash and cash equivalents at around 20 percent of total assets as of October 10, 2019.
The company has aggregate liquidity of more than Rs 18,500 crore as on October 10, 2019, which provides around 100 percent cover over its debt repayments till September 2020, it added.
According to the filing, Crisil also stated that there seem to be signs of improvement in the first fortnight of October 2019 with Indiabulls Housing having received sanctions to raise Rs 5,200 crore via term loans, working capital lines, commercial papers, and securitization lines.
The stock has been on a downward trend since the Reserve Bank of India (RBI) rejected its proposed merger with Lakshmi Vilas Bank. The central bank's decision to reject the merger comes days after the RBI initiated Prompt Corrective Action (PCA) against Lakshmi Vilas Bank following high non-performing assets (NPAs), insufficient capital adequacy levels, negative Return on Assets and high leverage.
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First Published: IST