There was fresh pressure on non-banking financial company (NBFC) counters on Monday with shares of companies such as DHFL and Indiabulls Housing Finance falling close to 5% over reports of repayment pressure and a government statement indicating that the sector was facing a liquidity strain. While authorities are working on ways to tackle the IL&FS crisis, corporate affairs secretary I Srinivas on Monday said NBFCs, especially housing finance firms, are facing liquidity issues, although he made it clear that there is “no crisis”.
The IL&FS crisis, triggered by debt defaults by some group companies, has sparked off concerns over liquidity in the system, while the corporate affairs ministry last month superseded the holding company’s board as part of larger efforts to contain the situation.
Amid reports of payment pressure, housing finance company DHFL said it has repaid commercial papers worth Rs 1,775 crore. Since September 21, 2018, it has repaid CP holders Rs 9,465 crore, including through buybacks worth Rs 3,240 crore, the company said in a statement.
PNB Housing Finance, too, issued a statement saying it was not facing a crisis. “PNB Housing Finance is comfortably placed with respect to the Asset Liability Management (ALM) position. In the 0-1 year bucket, we are broadly matched on ALM. Our short-term borrowing has reduced from 17.5% in March 2018 to 11.7% in September 2018. On the one-tothree year bucket, we are borrowing long-term, that is ECB (external commercial borrowings), and more sticky public deposits. We are comfortable with our mix. Further, our borrowing in the last one month represents our strength in the borrowing market as we raised more than Rs 6,000 crore through CPs and $200 million through ECB under automatic route,” it said in a statement.
Housing finance stocks fell by up to 5% on Monday over liquidity concerns. The shares recovered towards end of the session with DHFL closing 4.6% lower on the BSE, while Indiabulls Housing Finance ended the day 4.2% lower than the previous close.