NBFCs in a free fall; DHFL bleeds 60%, loses Rs 100 billion in m-cap

Shares of financial services companies took a massive beating on Friday with DHFL bleeding as much as 60 per cent in the intraday trade. The company lost around Rs 100 billion in the m-cap during the day. 

According to the analysts, the IL&FS crisis was the main reason behind the selloff. That apart, a rise in bond yields too weighed on the sentiment. 

“The sell-off is nothing surprising and was in the offing. Some of these stocks were correcting in small proportions owing to the IL&FS group situation. However, the major sell-off came today,” said A K Prabhakar, head of research at IDBI Capital.
 

Bankruptcy proceedings have been instituted against an IL&FSgroup company, a Tamil Nadu-based thermal power unit, for the first time since the recent crisis broke out. Lenders to the entity have taken it to the National Company Law Tribunal (NCLT), after it defaulted on loan payments.

IL&FS at a consolidated level has debt of Rs 910 billion, making it one of the most indebted of corporate groups in the country.

RBI has started an audit of IL&FS’ account books and banned its subsidiary, IL&FS Financial Services, from access to the commercial paper market after a default in loan repayment at August-end, as well as last week. To raise money, IL&FS is talking to real estate funds for selling its headquarters at then Bandra Kurla Complex in Mumbai, for Rs 15 billion. And, sought bids for its financial services arm.

Bajaj Finserv was down 5 per cent at Rs 6,017.20 while IndiaBulls Housing Finance was trading 8.43 per cent lower at Rs 1,059 apiece on BSE.