The board of embattled Dewan Housing Finance Corporation (DHFL) will meet on Saturday to discuss the financial results for the fiscal year ending March 2019. The board of DHFL had postponed the board meeting twice to discuss the annual accounts as the auditors had raised several queries on the accounts. DHFL’s auditors are Chaturvedi & Shah and Deloitte Haskins & Sells.
On July 11, DHFL informed the stock exchanges that the audit of the company's standalone and consolidated accounts was in progress by both firms and the auditors would sign the financial statements on completion. On Friday evening, sources close to the auditors said they were still working on the accounts.
According to a banking source, the lenders will wait for the auditors’ report before taking a call on buying the company’s retail loan book. The money raised by DHFL by selling the retail loan portfolio will be used to repay mutual funds which have invested in the company’s debt.
“But any decision on acquiring the retail portfolio will depend on the auditors' report for the financial year ending March 2019 as banks don’t want to take any risk,” said a banker asking not to be quoted.
On Friday, DHFL stock closed at Rs 68.45 a share, down 4 per cent — valuing its equity at Rs 2,148 crore. While its exact current financial position is not known, DHFL has outstanding loans of Rs 38,000 crore to banks, while exposure to non-convertible debentures (NCDs) is about Rs 37,000 crore, of which retail NCDs total to Rs 10,000 crore payable by 2024. It was rated D (default) by rating agencies after it failed to meet principal and interest repayment obligations last month.
The group has already sold its stake in the affordable housing finance company, Aadhar Housing to Blackstone. It also plans to split its books three-way — retail book, corporate book and a development book under Slum Rehabilitation Authority financing. Of these, public sector banks are interested in buying the retail loan book as loan defaults are lowest in the segment.