Indiabulls Housing tanks 9% on reports of PIL against company, promoters

The company said the PIL was leaked in social media with malicious intent, and that it is determined to fight out the petitioners in the court

Indiabulls Housing Finance crashed 9 per cent to Rs 406.20, hitting its fresh 52-week low, on the BSE on Friday on reports that a public interest litigation (PIL) has been filed against the company and its promoters in Delhi High Court on allegations of siphoning-off of funds.

According to a CNBC-TV18 report, the PIL seeks Special Investigation Team (SIT)-led investigation into the alleged violations and offences. It also alleges inaction by regulators such as Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Serious Fraud Investigation Office (SFIO), Registrar of Companies (ROC), and National Housing Bank (NHB).

Indiabulls Housing Finance, today, issued a clarification to the Bombay Stock Exchange (BSE) regarding the report, saying that "the petition hasn't yet been filed in High Court as per its website, but leaked in social media with malicious intent to create turbulence in IBH stock price".

The purported PIL admits that allegations are same as in earlier petition of Abhay Yadav which was subsequently withdrawn, the mortgage lender said in the BSE filing, adding that the company is determined to fight out the petitioners in the court. READ THE FILING HERE

Earlier this month, credit rating agency ICRA downgraded Indiabulls Housing Finance’s long-term debt instruments to AA+ from AAA, on account of rising woes for non-banking financial companies (NBFCs) and housing finance companies (HFCs). The NBFC and HFC sectors have been plagued by increase in cost of funds and prolonged squeeze in liquidity. The rating of IBHL remains under watch with “developing implications” in light of its merger proposal Laxmi Vilas Bank, ICRA said.

At 9:50 AM, Indiabulls Housing Finance was trading 5.15 per cent lower at Rs 424.85 as compared to 0.4 per cent rise in the benchmark S&P BSE Sensex. More than 12 million shares of the company have changed hands on the NSE and BSE so far. Lakshmi Vilas Bank, meanwhile, slid 5 per cent to Rs 36.55 apiece.