Crisis-hit DHFL tanks over 30% amid Q4 loss, doubts over survival
Highlights
- The company released its already-delayed results for the quarter ended March 2019 (Q4) on Saturday, wherein it reported a loss of Rs 2,223 crore
- In the filing for its Q4FY19 results, DHFL has warned that it may not be able to continue as a going concern with funding drying up
(File photo)NEW DELHI: Shares of troubled housing finance provider Dewan Housing Finance Corporation (DHFL) fell more than 30 per cent on Monday after the company admitted to irregularities in recognising some income and in failure to monitor end use of some other loans.
On the BSE index, DHFL stock fell as much as 31.41 per cent to Rs 46.95, while on NSE, the stock tanked 31.46 per cent to Rs 46.95 in late morning deals.
In the filing for its Q4FY19 results, the company has warned that it may not be able to continue as a going concern with funding drying up after a downgrade to ‘default’ category.
The company released its already-delayed results for the quarter ended March 2019 (Q4) on Saturday, wherein it reported a loss of Rs 2,223 crore following provisions of Rs 3,190 crore toward fair value loss.
The provisions were needed to reflect the fair value of loans worth nearly Rs 35,000 crore, which have been placed on the block by the company. These loans are nearly a third of its total financial assets of Rs 1.04 lakh crore.
The company said that it had been informed by the housing finance regulator that its capital adequacy should be 10.24 per cent (and not 15 per cent as computed by the company). This is below the statutory requirement of 12 per cent.
These disclosures come after a series of bad news from the company, which began with an unexplained flash crash in its share price. This was followed by drying up of liquidity for finance companies in the wake of the IL&FS collapse. In January this year, the company faced allegations of irregularities in lending by a news portal.
On the BSE index, DHFL stock fell as much as 31.41 per cent to Rs 46.95, while on NSE, the stock tanked 31.46 per cent to Rs 46.95 in late morning deals.
In the filing for its Q4FY19 results, the company has warned that it may not be able to continue as a going concern with funding drying up after a downgrade to ‘default’ category.
DHFL admits irregularities, warns it may not stay afloat
Troubled housing finance provider DHFL has admitted to irregularities in recognising some income and in failure to monitor end use of some other loans. In the filing for its Q4FY19 results, the company has warned that it may not be able to continue as a going concern with funding drying up after a downgrade to ‘default’ category.
The company released its already-delayed results for the quarter ended March 2019 (Q4) on Saturday, wherein it reported a loss of Rs 2,223 crore following provisions of Rs 3,190 crore toward fair value loss.
The provisions were needed to reflect the fair value of loans worth nearly Rs 35,000 crore, which have been placed on the block by the company. These loans are nearly a third of its total financial assets of Rs 1.04 lakh crore.
The company said that it had been informed by the housing finance regulator that its capital adequacy should be 10.24 per cent (and not 15 per cent as computed by the company). This is below the statutory requirement of 12 per cent.
These disclosures come after a series of bad news from the company, which began with an unexplained flash crash in its share price. This was followed by drying up of liquidity for finance companies in the wake of the IL&FS collapse. In January this year, the company faced allegations of irregularities in lending by a news portal.
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