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Shares of Dewan Housing Finance Corporation (DHFL) made good some of its losses today by recovering 20 per cent after the management said the company has not defaulted on any bonds or repayment nor has there been delay on its payout of liability.
The company on Sunday also said it proposes to reduce exposure to commercial paper (CP) as part of the overall borrowing plan and increase hedging activity, days after the stock tumbled up to 42 per cent on massive selling on fears of a liquidity crisis.
The stock was nearly 20 per cent up at Rs 420.45 at around 9.45 am.
On Friday, the shares crashed 42.43 per cent to end at Rs 351.55 on the BSE.
Following the fall, Kapil Wadhawan, CMD of DHFL, had said the market movement has come as a big surprise to not just the company, but the industry at large.
“We wish to categorically state that DHFL has not defaulted on any bonds or repayment nor has there been any single instance of delay on its repayment of liability.
We do not have any exposure with ILFS," Wadhawan said.
He maintained that the company's fundamentals are strong.
“Our promoters have neither pledged any of their shares nor availed loan against shares of the company,” he added.
The company will raise resources and focus on borrowings from banks and international markets and through direct assignment, said a DHFL note.
It expects liquidity to remain tight in second half with volatility in rates.
“Surplus would be in excess of Rs 12,000 crore at any point of time after meeting all contractual obligations if undrawn bank lines are included," it said further.
Cholamandalam Securities in a report said, “Healthy growth in loan book, improving cost of funds on account of change in borrowing mix, improving cost efficiency and stable asset quality paint a positive picture for DHFL.
Hence, we maintain ‘Buy’ rating and keep the target price at Rs 743.”
