On Wednesday, the debt-ridden Dewan Housing Finance Limited (DHFL) said that it has received permission from the Securities and Exchange Board of India (SEBI) to exit its mutual fund business by selling 50 percent stake to Prudential Financial.
The NBFC (non-banking finance company) had entered into an agreement with Prudential Financial to divest 50 percent of its stake in DHFL Pramerica Asset Managers (DPAMPL). It holds 17.12 percent directly and 32.88 percent through its wholly-owned subsidiary, DHFL Advisory & Investments.
"We wish to inform you that Sebi vide its letters June 25, 2019 addressed to DPAMPL has granted its prior approval for proposed change in controlling interest of DPAMPL and for amendment in trust deed under the applicable provisions of Sebi (Mutual Funds) Regulations, 1996 subject to certain conditions," DHFL said in an exchange filing.
On Tuesday, DHFL defaulted on its debt payments once again after it could barely meet 40 percent of a Rs 375 crore repayment commitment towards commercial papers, drawing more attention to its cash flow deficiency. The mortgage lender has been selling assets to be able to repay the debt.
Late on Tuesday, DHFL said, "Out of the aggregate amount of Rs 375 crore, 40% has been paid on a proportionate basis, and the balance amount of Rs 225 crore shall be paid in the next couple of days."
Shares of DHFL were trading higher in the morning session on account of the stake sale.