Dewan Housing Finance Corporation (DHFL) on Friday said it has not defaulted on any repayments and the stock fall has come as a surprise and shock.
In an interview to CNBC-TV18, Kapil Wadhawan, chief managing director, said, "At the same time, there is close to Rs 10,000 crore of liquidity available with us in the system other than the collections that we accrue on a monthly basis. Those collections are anyway between Rs 2,500-3,500 crore a month, so from that perspective, we are extremely comfortable."
Watch: DHFL tanks 50%, loses over Rs 10,000 crore in market cap
According to Wadhawan, "My fundamentals are strong, my non-performing asset (NPA) positions are strong, my asset quality is above notch."
Edited excerpts: Q: Has the company defaulted on any kind of a bond right now and also, if you could tell us if you had to borrow in the market today. What rate would it be and how would it compare with say a fortnight ago?
A: This has come as a big surprise and a shock to me that someone who is sitting on strong liquidity position, and it's not just been recent, we are extremely conservative in maintenance of liquidity and there is no default what so ever. The repayments are not even due yet and there is ample liquidity lying with us in our system to take care of interest as well as the principal pay-outs over the next couple of quarters. So, what we are seeing is a panic driven, panic stricken market reaction.
Q: Maybe you want to detail to the market what is your one year liability and what is your one year asset maturity position?
A: My total liability position, say till March 31 is just Rs 4,800 crore. Obviously, there is some amount of commercial papers (CP) that is also there in the system, but it's not a very big amount. At the same time, there is close to Rs 10,000 crore of liquidity available with us in the system other than the collections that we accrue on a monthly basis. Those collections are anyway between Rs 2,500-3,500 crore a month, so from that perspective, we are extremely comfortable.
Q: How much is the CP outstanding? Even if I ask you up to one year, not just up to March, up to March 31, but up to say September 30th next year. How much of the CP is outstanding and what would happen if they were not ruled over?
A: My total CP book as it stands today is about Rs 7,500 crore out of my total asset and liability book of more than Rs 100,000 crore.
Q: How much of assets mature within a year?
A: If you go by the total amount available to us, on a per annum basis, it will cross almost Rs 25,000 crore.
Q: If you could tell us, if you have any pledge shares or a loan against shares and are you aware if that has been sold into the market today?
A: That is a policy of the family not to go and pledge your own shares. We have never done this in the past. There is no intention of doing that in the future.
Q: One of the funds tried to sell DHFL’s paper on Wednesday and they had to pay 11 percent yield that was one talk in the market. You were aware of that?
A: Yes, I was absolutely aware of that and when we got to hear of this, and when the funds came to us – that is a secondary trade between a buyer and seller. It has got nothing to do with the fundamentals of the company, which are extremely strong. Obviously, this panic has been started for some other fundamentals reason out there as we all know. So, this probably seems to be some cascading effect. My fundamentals are strong, my non-performing asset (NPA) positions are strong, my asset quality is above notch that is all I can say.
Q: You indicated that 11 percent yield on the paper was a secondary transaction only between a buyer and a seller, but if you can tell us for the Dewan Housing in the primary market, if you had to go and raise money what would it be, the rate?
A: Honestly, with all this unfortunate mayhem that has gone around in the market, this only puts a dent no any further primary issues that we do for the immediate future. These are all sentiment spoilers out there in the market.
Q: What are the primary yields quoting at sir?
A: The last money that we have raised – I will go back about two months ago when we raised the money through the non-convertible debentures (NCD) IPO, the rates were anywhere between 9.10 and 9.25 for three years, five years, seven years. We are extremely well-matched as far as the asset and liability management (ALM) position of the company is concerned.
A: Nil exposure.
Q: Do you have any exposure to IL&FS Group?