Indiabulls Housing tumbles after Moody's downgrade

Indiabulls Housing Finance fell 3.41% to Rs 202.80 after Moody's Investors Service downgraded the corporate family rating and the foreign-currency senior secured rating of Indiabulls Housing Finance to B2 from Ba2.

In addition, Moody's has downgraded Indiabulls' foreign and local currency senior secured MTN program ratings to (P)B2 from (P)Ba2. The outlook on all ratings, where applicable, remains negative.

The downgrade is driven by Indiabulls' ongoing challenging access to funding. Governance considerations were also a key driver of this rating action. The company's access to funding remains challenging. The continued decline in on-balance sheet loans is a reflection of its funding challenges.

The proposed merger with Lakshmi Vilas Bank would have provided a vote of confidence on governance, as it would have meant that the company passed the regulator's fit and proper criteria for becoming a bank. Hence, the rejection by the Reserve Bank of India of this proposal on 9 October is a credit negative, Moody's said in a statement.

Meanwhile, the S&P BSE Sensex was up 288 points or 0.75% to 38414.76.

On the BSE, 34.10 lakh shares were traded in the counter so far compared with average daily volumes of 43.42 lakh shares in the past two weeks. The stock hit a high of Rs 215.75 and a low of Rs 195.95 so far during the day.

The stock hit a 52-week high of Rs 976.85 on 16 Oct 2018. The stock hit a 52-week low of Rs 176.6 on 11 Oct 2019.

On a consolidated basis, Indiabulls Housing Finance'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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