DHFL postpones NCD issue

The country’s third-largest housing finance company, Dewan Housing Finance (DHFL), has postponed its proposed non-convertible debenture (NCD) issue, citing market conditions.

The firm had plans to raise up to Rs 1,000 crore in August by issuing debt to institutions, retail investors and high networth individuals. JM Financial, Enam Securities, ICICI Securities, AK Capital and Axis Bank were lead managers to the issue.

A senior DHFL executive said the company was not sure if there would be enough takers for the issue at the price the firm was offering. “We were looking at a coupon (rate) of less that 10 per cent. Anything above that would not have been viable since we can tap other sources for funds at the 9-per cent level,” said the executive.
 

VITAL STATS Performance in Q1 ended June
(Rs crore)	2009	% chg
Op income	205.63	48.96
Total income	213.85	50.48
Int. expenses	149.20	47.90
Net profit	31.26	59.25

 

He said the firm had used commercial vehicle financier Shriram Transport Finance’s NCD issue to set a price that would appeal to investors.

Shriram Transport is issuing debentures of three, four and five years duration at a coupon rate of 10.75-11.25 per cent. The Rs 1,000-crore issue was subscribed 4.5 times on the first day itself.

The DHFL executive said the company might raise more capital through another qualified institutional placement (QIP) issue but declined to specify how much. DHFL had recently concluded a Rs 225-crore QIP that saw a huge participation from foreign institutional investors. South Korea-based Mirae Assets had picked up $8.5 million worth of equity. The other big FII buyers included Asiabridge Fund and Boyer Allan Investment Management. The the company also raised Rs 75 crore through preferential shares issue to the promoter group.

The firm reported 59.24 per cent increase in net profit to Rs 31 crore for the quarter ended June 30. Its loan sanctions grew 102.25 per cent to Rs 1056.01 crore while disbursals rose 63.52 per cent to Rs 773.94 crore in the June quarter compared to the year-ago period.