DHFL hits 5% upper circuit as RBI okays Piramal Group's resolution proposal

Shares of Dewan Housing Finance Corporation Ltd (DHFL) were locked in the 5 per cent upper circuit band, at Rs 20 apiece, on the BSE after the insolvent housing financier received a no objection from the Reserve Bank with regards to the resolution plan of Piramal Capital & Housing Finance. In comparison, the ben chmark S&P BSE Sensex was down 1,400 points, or 2.7 per cent, at 11:19 am.

On Thursday, DHFL said it has received the intimation from the RBI and has filed application with NCLT for submission of the resolution plan of Piramal Capital & Housing Finance. 

"Pursuant to the receipt of no objection from Reserve Bank of India as per Insolvency and Bankruptcy Rules, 2019, the administrator of Dewan Housing Finance Corporation Limited (DHFL) has filed an application for submission of resolution plan of Piramal Capital & Housing Finance Limited (PCHFL) with the adjudicating authority NCLT, Mumbai Bench," DHFL said in a regulatory filing. READ THE FILING HERE

In November 2019, the Reserve Bank had referred DHFL, the third-largest pure-play mortgage lender, to the National Company Law Tribunal (NCLT) for insolvency proceedings. It was the first finance company to be referred to NCLT by the RBI using special powers under Section 227 of the IBC.

Prior to that, the company's board was superseded and R Subramaniakumar was appointed as the administrator. He is also the resolution professional under the Insolvency and Bankruptcy Code (IBC).

For the quarter endeng December 2020, DHFL had posted a a consolidated net loss of Rs 13,095.38 crore as against a net profit of Rs 934.31 crore in the year ago quarter. On a quarterly basis, the company witnessed widening of net loss from Rs 2,122.65 crore in the second quarter ended September 2020.

So far in the calendar year 2021, the stock has tumbled 36.6 per cent on the BSE, as against a 7 per cent rise in the benchmark S&P BSE Sensex.