Dewan Housing Finance Corporation Ltd (DHFL) has temporarily stopped accepting fresh deposits and allowing premature withdrawals of existing deposits. In a letter to its depositors, DHFL informed that the decision was taken on account of the recent credit rating revision on its Fixed Deposit program and that the move will help its re-organize its liability management.
Multiple downgrades by credit evaluators on its debt instruments has led to the NBFC (non-banking finance company) to take a step to manage liquidity.
The company further said that it will, however, honour pre-mature withdrawal requests in case of medical or financial emergencies.
Following the announcement, shares of DHFL fell as much as 17.8 percent to a low of Rs 106.85 apiece on NSE.
CARE Ratings had downgraded DHFL's fixed deposit programme worth Rs 20,000 crore from A to BBB-. A 'CARE A' rating signifies "low" credit risk, while 'CARE BBB' means "moderate" credit risk.
In its said letter, the housing finance company went on to say that there has been "unwarranted speculation" about its creditworthiness and assured its customers that is was committed to honouring its liabilities. It said that the company has "demonstrated this by repaying liabilities amounting to approximately Rs 30,000 cr since September 2018, without a single days delay," a Moneycontrol report said quoting the letter reviewed by its team.