27 June 2019: Shares of Dewan Housing Finance Corporation traded in the green, rising as much as about 5 per cent, in morning trade on Thursday.
The debt-laden DHFL on Wednesday said it has received the Securities and Exchange Board of India’s (Sebi) approval to exit its mutual fund business by selling its 50 per cent stake to Prudential Financial.
The company had entered an agreement with Prudential Financial to divest its 50 per cent holding in DHFL Pramerica Asset Managers (DPAMPL) — 17.12 per cent held directly and 32.88 per cent held by its wholly-owned subsidiary, DHFL Advisory & Investments.
Meanwhile, some overseas funds are betting on the revival of a company that was India’s third-biggest financier of homes at the end of last year.
DHFL bonds worth about Rs 180 crore have changed hands in four deals in the past few days, with yields falling from the record high on June 11, when securities sold a year ago traded at an eye-popping 67 per cent.
The decline in yields, to the 39 per cent ballpark, shows that investors are shortening the odds on DHFL’s revival – or a buyout that would honour commitments to existing bondholders.
DHFL Tuesday managed to meet 40 per cent of its Rs 375-crore repayment commitment toward commercial papers, highlighting the cash-flow stress at the embattled mortgage lender that is selling assets to repay debt.
The company is looking to bring in a strategic equity investor and is in talks with a group of foreign and domestic entities.
Since September last year, the company has repaid Rs 35,000-40,000 crore in debt obligations.
Shares of DHFL closed 2.45 per cent up at Rs 81.70 on BSE.