Money & Banking

Dewan Housing Finance pays ₹838 crore to NCD holders

Our Bureau Mumbai | Updated on April 30, 2019 Published on April 30, 2019

DHFL said it paid ₹500 crore in principal and ₹338 crore in interest on four NCD series that matured on Tuesday

Dewan Housing Finance Corporation (DHFL) has paid ₹838 crore as interest and principal on its non-convertible debentures issued on private placement, laying to rest the fear of another default rocking mutual funds and the debt market.

In a statement issued to the stock exchanges, DHFL said it paid ₹500 crore in principal and ₹338 crore in interest on four NCD series that matured on Tuesday.

Earlier this month, rating agency Crisil had downgraded ₹850 crore worth of commercial paper of the company to ‘A3+’ from ‘A2+’ with negative implications. However, DHFL had contested the rating downgrade.

Liquidity situation

Crisil said the downgrade was driven by continued low visibility in raising funds and its belief that liquidity levels will remain subdued against earlier expectations.

Expected fund flow from sell-down of project finance loans, high-value securitisation transaction (comprising greater proportion of non-housing loans), and proceeds from stake sale of associate entities are taking longer than expected.

Liquidity remains a critical monitorable due to the limited visibility in fund raising (including securitisation) and the agency’s belief that liquidity will now remain lower than earlier expectations. Liquidity level was at ₹4,000 crore during the second week of April 2019.

Collection from loan assets is estimated at ₹2,200 crore per month.

On the other hand, scheduled monthly cash outflow (including loan repayment and securitisation payouts) over the next two-and-half months remains high at an estimated ₹9,900 crore. Any higher-than-anticipated premature redemption of fixed deposits remains a key rating sensitivity factor.

Additionally, a portion of the NCDs raised by DHFL has triggered acceleration clauses linked to downgrades in the NCDs’ long-term ratings. Any exercise of option by investors would materially increase the scheduled outflow, said the rating agency.

Published on April 30, 2019

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.