Indiabulls Housing shares surge 12% after govt's clean-chit; CLSA raises target
The Ministry of Corporate Affairs found no irregularities in loans extended by Indiabulls Housing Finance to five companies, as alleged by a PIL.
November 29, 2019 / 09:33 PM IST
Indiabulls Housing Finance case: The company was accused of siphoning Rs 98,000 crore of public money. A petition was filed before the Supreme Court in June seeking legal action against the company, its chairman and directors. It was alleged that the chairman and the directors siphoned the money for their personal use. The legal proceedings in the matter are currently on. (File image)
Shares of Indiabulls Housing Finance surged 12 percent in early trade on BSE on November 29 after the government affidavit filed in Delhi High Court said it did not find any irregularities in loans given to five companies.
The Ministry of Corporate Affairs (MCA) on September 28, found no irregularities in loans extended by Indiabulls Housing Finance to five companies, as alleged by a Public Interest Litigation (PIL).
Read more: No irregularities in Indiabulls Housing Finance loans given to 5 companies: MCA
A PIL was reported to have been filed on September 27 alleging roundtripping of funds by the company.
Foreign brokerage firm CLSA retained buy on the stock with a target price at Rs 450 against Rs 350 and said that clarity on court case can lend relief to the company.
"Clarity can improve the company's access to the debt market, aiding liquidity and growth base case continues to assume marginal growth till FY21. A 200 bps higher loan growth can lend a 3 percent earnings upside for the company in FY21," CLSA said.
The current valuation is attractive while risks are receding on court cases. An uptick in growth can drive rerating, CLSA added.
Shares of the company had gained 24.65 percent on BSE on November 28.
Around 09:40 hours IST, the scrip was 11.70 percent up at Rs 373.30 on BSE on November 29.