Dewan Housing Finance Corp. Ltd (DHFL) shares rallied over 10 per cent in intraday trade on the Bombay Stock Exchange (BSE) on Monday after the company paid the entire pending debt to DSP Mutual Fund.
DSP Mutual Fund has said the housing finance company had paid the entire pending amount, according to CNBC-TV18 report.
DSP MF had an exposure of Rs 150 crore to commercial papers issued by DHFL. The company had made partial payments of Rs 75 crore in June and the remaining amount was paid on September 7.
Boosted by the development, share price of DHFL gained as much as 10.20 per cent to hit an intraday high of Rs 51.30 apiece against the previous close of Rs 46.55 on the BSE. Paring half of early gains, DHFL shares closed trade at Rs 49 apiece, up 5.26 per cent. In the last 15 days, the stock has gained as much as 30 per cent.There was surge in volume trade as a total of 22.09 lakh shares changed hands on the BSE as compared to two-week average volume of 19.10 lakh shares.
In a similar fashion, stocks of DHFL ended 4.51 per cent higher at Rs 48.70 on the National Stock Exchange. The scrip opened tad lower at Rs 45.90 against previous close level of Rs 46.60.
Also Read: DHFL board approves conversion of debt to equity
In an anther positive development, lenders to the cash-strapped company are considering Rs 7,000 crore in emergency funding even as the creditors decide on the formula for conversion of debt into equity, which is a part of the proposed restructuring plan, reported The Economic Times.
On August 30, the board of debt-laden DHFL had approved conversion of whole or part of its debt into equity shares, which may result in a change in ownership of the company. The 35-year-old housing finance company has around Rs 1 lakh crore ($14.15 billion) of debt, and owes nearly Rs 40,000 crore to banks alone.
DHFL has been undergoing substantial financial stress and has defaulted on its obligations several times. The mortgage lender has been the worst hit by the liquidity crisis in the NBFC sector, that crippled numerous Indian non-banking finance companies (NBFCs) following last year's defaults at the infrastructure lender, Infrastructure Leasing and Financial Services Ltd (IL&FS).
Edited by Chitranjan Kumar