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The share prices of housing finance companies (HFCs) received a thrashing on the bourses on Wednesday on news that Delhi-based real estate developer SuperTech’s rating was downgraded to junk.
Brickwork is said to have revised its ratings on the ₹1,866-crore bank facilities of SuperTech to junk status, citing failure to service debt. The IL&FS fiasco has vitiated the scenario, and any adverse news leads to panic reaction in the stock markets, traders told BusinessLine .
Indiabulls Housing Finance (IBHF), which is said to have an exposure of between ₹500-600 crore fell the most at over 13 per cent. Among others, PNB Housing Finance and DHFL fell by 5 per cent and 12 per cent, respectively. Other bank and NBFC shares too reacted and fell by 1-5 per cent on the news. The panic selling in financial sector shares led to a last-hour sell-off in the Sensex and Nifty, resulting in a fall of over 1 per cent.
Earlier last month the share price of IBHFs had crashed by 35 per cent intraday on news of default by IL&FS. In intra-day trading that day, shares of DHFL fell 70 per cent. The share price of L&T Finance too declined by 8 per cent as markets feared that it had huge exposure to SuperTech.
Brickwork last week revised ratings on ₹1,866.4 crore of SuperTech’s bank facilities to default, citing its failure to service debt obligations. It blamed the developer’s troubles on cash-flow mismatches because of a slowdown in the real estate industry.
Macquarie’s sales team, in a note to clients on Wednesday said Indiabulls’ loans to SuperTech could be more than ₹500 crore. An Edelweiss report said the exposure was ₹600 crore.
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