Indiabulls Housing slides after revision in credit rating

Indiabulls Housing Finance fell 2.39% to Rs 424.25 after the credit rating agency CARE revised its rating on the company's debt issue.

CARE revised the long-term rating of Indiabulls Housing Finance from 'CARE AAA' to 'CARE AA+'. Perpetual debt programme was revised from 'CARE AA+' to 'CARE AA'. Short-term rating was reaffirmed at 'CARE A1+'.

The ratings were revised due to progress in process of merger with Lakshmi Vilas Bank and the potential transition challenges thereof; challenging funding environment for NBFCs and HFCs; and moderation in asset quality.

Meanwhile, the S&P BSE Sensex was down 299.83 points or 0.77% to 38,797.31.

The market surged recently after the Finance Minister Nirmala Sitharaman on Friday, 20 September 2019, slashed corporate tax rate to 22% without exemptions. The effective corporate tax rate after surcharge now stands at 25.17%. The step has significant positive implications for corporates' profitability, broader economy and market valuations.

As on 31 March 2019, Indiabulls Housing Finance paid corporate tax of 27.55%.

On the BSE, 4.19 lakh shares were traded in the Indiabulls Housing Finance counter so far compared with average daily volumes of 12.34 lakh shares in the past two weeks. The stock hit a high of Rs 433.6 and a low of Rs 420 so far during the day.

The stock hit a 52-week high of Rs 1140.45 on 24 Sep 2018. The stock hit a 52-week low of Rs 378.85 on 19 Sep 2019.

On a consolidated basis, the company's net profit fell 24% to Rs 801.53 crore on a 4.5% decline in total income to Rs 3886.12 crore in Q1 June 2019 over Q1 June 2018.

Indiabulls Housing Finance is a mortgage lender. It is India's second largest housing finance company and is regulated by the National Housing Bank.

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