DHFL share price hits upper circuit of 5% on creditors' approval for disbursing loans

Dewan Housing Finance Ltd (DHFL) stock price rose in early trade today amid reports that the housing finance company had received approval from committee of creditors (CoC) for resumption of disbursing home loans beginning with Rs 500 crore a month to prevent the decline in its loan book. DHFL share price rose nearly 5% to Rs 16.90 in early trade compared to the previous close of Rs 16.10 on BSE.

The stock opened at Rs 16.30 today. 1.45 lakh shares changed hands amounting to turnover of Rs 25.12 lakh on BSE.

Share Market LIVE: Sensex slips 500 points, Nifty at 12,000; SBI, YES Bank, Coal India top losers

According to a Mint report, DHFL was recovering Rs 1,700-1,800 crore from past loans every month. Hence, it could restart disbursements of loans worth Rs 500 crore per month after setting aside money for operational expenses. The company which has been hit by a liquidity crunch has not disbursed loans in more than six months.

The stressed financier was admitted for insolvency proceedings on December 2. DHFL, the third-largest pure-play mortgage player, is the first NBFC/HFC to face the corporate insolvency resolution process. The RBI, on November 20, superseded the board of DHFL and appointed Subramaniakumar as its administrator after it found out governance and liquidity issues at the company.