Reliance Home Finance plunged over 15 percent in intraday trade on April 30 to record its worst fall since October 2018 after Care Ratings downgraded the company’s long-term debt program of Rs 4,979 crore to default due to delay in servicing bank debt.
The stock closed 15.31 percent lower on the NSE on October 8, 2018.
The rating for long-term debt program was downgraded to Care D from Care BBB+ due to delays in debt servicing with some of the banks factoring in linkages between RHFL and its parent Reliance Capital, said a report.
Reliance Home Finance (RHFL), part of Reliance Capital, is one of the country’s leading private sector home loan companies, incorporated in the year 2008.
Clearing the air, Reliance Home Finance issued press releases stating that the company has been affected by a timing mismatch in regards to the ongoing further securitisation/monetisation proposals with banks, etc., and the same has resulted in minor delay on principal repayments aggregating to only Rs. 542 crore to around 5-6 Banks, and limited only to its bank borrowings.
“RHFL expects to regularise all such repayments very shortly. RHFL has already completed a securitisation of over Rs. 5,500 crores from 1st October 2018 till date, and is engaged in active discussions for further securitisation/monetisation of its asset base,” said the press release.
It further added that the company is completely current and regular on principal repayments on all its capital market borrowings aggregating Rs. 7,708 crore.
For the past 7 months, ever since the IL&FS episode, all categories of lenders in India, including Banks, Mutual Funds, etc., have put an almost complete freeze on additional lending to Home Finance companies (HFCs) and Non-Banking Finance companies (NBFCs), and have instead only been insisting upon reduction of existing borrowings.
Indiabulls Ventures was down by 7 percent, followed by Indiabulls Housing Finance which fell by 6 percent, Edelweiss Finance was down by 4.6 percent, Shriram Transport Finance fell 3.7 percent, and M&M Financial dropped a little over 3 percent on rising volumes.
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