Dewan Housing Finance defers Q4 results, share price falls nearly 9%

Dewan Housing Finance Corporation share price fell in trade today after the firm deferred its earnings announcement to July 13, 2019. Earlier, meeting of board of directors of the company to consider and approve the audited financial results (standalone & consolidated) was scheduled to be held on June 29. Dewan Housing Finance Corporation share price fell to 74.65 level, down 8.63% intra day.

Dewan Housing Finance Corporation share price has lost 88.19% during the last one year and has fallen 69.89% since the beginning of this year.

Dewan Housing in a communication to stock exchanges said, "This is further to our letter No. DHFL/CSD/2019-20/1563 dated 23rd June, 2019 whereby it was intimated that a meeting of the Board of Directors of the Company is scheduled to be held on Saturday, 29th June, 2019, inter-alia, to consider and approve the Audited Financial Results (Standalone & Consolidated) of the Company for the fourth quarter / financial year ended 31st March, 2019 and matters relating to the ensuing Annual General Meeting.

In this connection, please note that in light of certain unforeseen operational engagements including nonavailability of a few directors to ensure participation of all the members of the Audit Committee as well as the Board for taking into consideration and approval of the financial results for the fourth quarter /financial year ended 31st March, 2019, the date of the Board Meeting, inter-alia, to consider and approve the Audited Financial Results (Standalone & Consolidated) of the Company for the fourth quarter / financial year ended 31st March, 2019 and matters relating to the ensuing Annual General Meeting, as intimated earlier Le. 29th June, 2019 is being postponed to 13th July, 2019."

On June 26, Dewan Housing Finance Corporation said it would shortly divest its full stakes in subsidiary firms DHFL Pramerica Asset Managers and DHFL Pramerica Trustees.

The Securities and Exchange Board of India (Sebi) vide its letters on June 25, 2019 addressed to DHFL Pramerica Asset Managers Pvt Ltd (DPAMPL) granted its prior approval for proposed change in controlling interest of DPAMPL and for amendment in trust deed, subject to certain conditions, DHFL said.

DHFL has already entered into binding term sheet with PGLH of Delaware Inc (Prudential) for divestment of its stake entire shareholding of 50 per cent in DPAMPL (17.12 per cent being held directly and 32.88 per cent being held by its wholly owned subsidiary, DHFL Advisory & Investments Pvt Ltd).

The non-banking finance company has been facing liquidity crisis and has recently defaulted on its repayment obligations. The company has resorted to various modes of fund mop-up including selling stake in subsidiary firms to meet its debt obligations.

On June 26, Dewan Housing said it had only been able to make a 40 percent payment on unsecured commercial papers due on Tuesday, but vowed to pay the remaining Rs 225 crore ($32.49 million) in the coming days.

Two major credit ratings agencies - ICRA, an affiliate of Moody's, and Standard & Poor's local unit Crisil - earlier this month categorised DHFL's commercial paper at default levels for missing bond payments. Dewan Housing said in a regulatory filing it would make the outstanding payment in the next few days "once the surplus cash flow position improves" and stressed it was vying to turn the corner.

"The company is already in the process of selling down its loan assets including wholesale project loans to make good all its obligations and maintain its 100% commitment to all its creditors as it has done since the liquidity crisis started in September 2018," DHFL said.

DHFL also missed certain payments on bonds due in early June. The problems facing India's non-banking financial companies have piled additional pressure on Prime Minister Narendra Modi, who won a strong election mandate last month, even as the economic growth slipped to 5.8% in the January-March quarter, marking the lowest GDP growth rate in more than four years.

Edited by Aseem Thapliyal