DHFL stock crashes 9.93% in early trade after management raised doubts on its ability to survive
- One of
India’s biggest housing finance companies Dewan Housing Finance CorporationLtd’ management has announced that the company may not survive the grim financial situations.
- DHFL stock crashed 9.93% in early trade to ₹61 after the company management itself raised doubts in its ability to survive.
- DHFL debt stands at a hovering ₹ 1.2 lakh crore.
“The Company's ability to raise funds has been substantially impaired and the business has been brought to a standstill with there being minimal/virtually no disbursements. These developments may raise a significant doubt on the ability of the Company to continue as a going concern,” Chairman and Managing Director Kapil Wadhwan said on Saturday July 13, as a part of quarterly results announcement.
DHFL’s results itself will bring no comfort as it is expectedly in the red, with a net loss of ₹2,223 crore as compared to a profit of ₹134 crore in the same quarter last year.
The stock also touched a lower circuit, which is a new low, in today’s trade.
The housing finance company has been under financial stress as it saddles heavy debt of ₹ 1.2 lakh crore. It also faced downgrades by credit rating agencies CRISIL, ICRA and CARE after they raised doubts on its ability to repay it.
In the meanwhile, the management is trying to sell chunks of the company to stay afloat. “The Company is taking active steps to monetize its assets and is in discussions with multiple Indian banks and international financial institutions to sell off its retail as well as wholesale portfolio,” said Wadhawan.
DHFL also said that it is in discussions with the consortium of bankers to restructure its borrowings and will take all the necessary steps to ensure that it meets its financial commitments.
“There have been discussions for stake sale by the promoters to a strategic partner with further equity infusion,” the company said.