DHFL crisis: Insurers seek Irdai nod to be part of inter-creditor agreement

Insurance companies — exposed to Dewan Housing Finance Corporation’s (DHFL) debt papers — have approached the Insurance Regulatory and Development Authority of India (Irdai) to get a go-head from the regulator for participating in the inter-creditor agreement (ICA) for DHFL, according to people in the know.

Sources say that insurance companies have already held preliminary talks with Irdai on the matter. “The Reserve Bank of India’s June 7 circular doesn’t restrict bondholders from being part of the ICA. Insurance players can be part of the ICA through their debenture trustee, which will act as a financial institution,” said a banking official.

Meanwhile, sources suggest that mutual funds (MFs), holding debt papers of DHFL, are also planning to write to the Securities and Exchange Board of India to get a green-light from the market regulator to the participate in the ICA proceedings.  

The housing finance company’s outstanding debt stands at Rs 90,000 crore. Of this banks’ share is Rs 40,000 crore, while the remaining is contributed by institutional investors such as pension funds, insurance companies, and MFs.