Companies

Race for DHFL’s assets may be down to Piramal, Adani, Welspun

Our Bureau Mumbai | Updated on October 13, 2020 Published on October 13, 2020

Unearthing of a major fraud in one ‘branch’ may have put off other bidders; final bid submission on October 17

 

The race to acquire the stressed assets of Dewan Housing Finance Corp Ltd (DHFL) is likely to come down to just three bidders — Piramal Enterprise, Welspun group and Adani group. The last date for submission of final bids is October 17.

“We are expecting three players to submit final bids for DHFL. There are no bidders to take control of the entire company. Bidders have expressed interest in buying certain assets of the company,” said a source close to the development.

Piramal is understood to be interested in the retail portfolio, which has assets of ₹40,000 crore. Adani and Welspun are expected to bid for the wholesale and the slum redevelopment assets. When contacted, Adani and Welspun did not comment. A spokesperson for Piramal said, “We do not comment on market speculation.”

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Though a number of foreign investors had shown interest in acquiring the assets, the recent investigations into the alleged fraud at DHFL may have put them off, sources said. Investigations have revealed a whopping 2.6 lakh fake accounts in a Mumbai branch that did not exist. The ‘branch’ created fake accounts using names of account holders who had already repaid their loans in full to siphon out ₹11,750 crore. There could be other complications as the National Housing Bank could make it difficult for other financial creditors in realising money. “Any sum received by DHFL in repayment/realisation of loans and advances against which refinance has been availed from NHB shall be shall be paid to NHB,” explained another source.

 

Initially, more than 20 entities had shown interest in DHFL’s assets including Edelweiss Financial Services Ltd, Kotak Investment Advisors Ltd, Lonestar Asia Pacific Acquisitions (Hong Kong) Ltd, and KKR Credit Advisors.

DHFL was the first and only company to be referred to the National Company Law Tribunal by the Reserve Bank of India under the special power under Section 227 of the Insolvency and Bankruptcy Code. State Bank of India is the lead banker with an exposure of over ₹10,000 crore.

“The interested parties’ bid for DHFL’s assets will take into account the debt they will need to take on and the fresh capital they will need to infuse to run the housing finance company’s retail and wholesale businesses. The haircut that lenders will have to take will be a function of these two factors,” sources added.

Financial creditors’ claims aggregating to ₹87,048 crore have been admitted against the ₹94,691 crore submitted.

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Published on October 13, 2020
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