Real Estate

DHFL: Worsening retail assets can complicate resolution

Surabhi Mumbai | Updated on December 13, 2020

Final offers to be submitted on Monday

Even as lenders to distressed Dewan Housing Finance Corporation Ltd are expecting higher bids from Oaktree and Piramal, the deteriorating portfolio of the housing finance company could be a cause of worry.

According to updated business figures for October and November, available at the data centre, DHFL’s retail book is said to have shown a further deterioration as also the performing portfolio.

‘Assets undervalued’

Sources privy to DHFL’s data said that the performing portfolio declined by ₹5,000 crore between August and November this year. The performing book of the retail portfolio is estimated to be down to about 55 per cent, they added.

“While the final bids that will be submitted by the interested entities are not known, at least some feel that there has been a considerable worsening of the portfolio, especially the retail assets,” said a person familiar with the development.

A large part, or over 90 per cent, of the wholesale book is also said to be non-performing.

There is also a view that the long-drawn resolution process has weakened the company’s financial position.

But DHFL’s former promoter has been saying that the bidders have undervalued the company’s assets. In a letter to the lenders, Kapil Wadhwan said that even the revised bids are abysmally low.

Another source, too, said: “There is inherent value in DHFL as a company and it has sizeable assets.”

The final bids have to be submitted by Monday morning.

Oaktree Capital declined to respond to an e-mail query from BusinessLine on whether it intends to raise its bid. A similar query to Piramal did not elicit a response.

Published on December 13, 2020

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