DHFL has said it will honour all pre-mature deposit withdrawal requests in case of medical or financial emergencies
Dewan Housing Finance Corporation Ltd (DHFL) has stopped accepting fresh deposits and put premature withdrawals from existing deposits on hold as it is trying to manage liquidity and navigate through multiple downgrades by credit evaluators on its debt instruments.
In a letter to depositors and financial planners, the company said, "In view of the recent revision in the credit rating of our Fixed Deposit program, acceptance of all fresh deposits, as well as renewals, has been put on hold with immediate effect. Further, to help us re-organise our liability management, the pre-mature withdrawal of deposits has also been put on hold."
Moneycontrol has reviewed the letter.
DHFL has said it will continue to honour all pre-mature deposit withdrawal requests in case of medical or financial emergencies.
After the company announced this, its shares have tanked over 13 percent intraday on May 22.
"Over the last few weeks, there has been unwarranted speculation in the market about the creditworthiness of DHFL. We assure you that we stand committed to honouring all our liability payments, and have demonstrated this by repaying liabilities amounting to approximately Rs 30,000 cr since September 2018, without a single days delay," the letter said.
Most recently, CARE Ratings downgraded DHFL's fixed deposit programme worth Rs 20,000 crore from A to BBB-. CARE A signifies “low” credit risk, while CARE BBB signifies “moderate” credit risk.
