DHFL sinks 10 per cent on ratings downgrade

Leading housing finance company DHFL was facing negative sentiments in the morning session on Thursday and dipped more than 10 per cent after rating agencies downgraded its commercial paper to default (D) citing delay in interest payment of NCDs.

DHFL missed its interest payments deadline on Tuesday. This triggered mutual fund houses to revalue the company's securities and take a haircut as per valuation norms. All this has led rating agencies including Crisil, Care and ICRA to downgraded DHFL commercial papers.

Crisil has downgraded DHFL's commercial papers worth Rs. 850 crore to CRISIL D from the earlier CRISIL A4+. The agency has cited delays servicing debt of some the company's Non‐Convertible Debentures (NCDs) as the reason for the downgrade. While ICRA downgrade the same papers from ICRA A4 to (ICRA) D.

However, the company has refuted the action of the rating agencies has surprising and unwarranted and that the company is making all efforts to ensure that there is no defaults on any bonds or repayment of financial obligations. DHFL has repaid approximately Rs. 40,000 crore of financial obligation, since September 2018, said the company's clarification posted on the exchanges.

DHFL has also sold its retail assets including Aadhar Housing Finance, Avanse Avanse Financial Service and its stakes in mutual funds joint venture DHFL Pramerica Asset Managers to reduce debt.

At 9:27 hours, the stock of Dewan Housing Finance Corporation Ltd (DHFL) was trading at Rs. 98.35, down by Rs. 13.25 or 11.87 per cent on BSE.