DHFL Hits 5% Upper Circuit After Creditors Approve Piramal Group Bid

On Monday, shares of Dewan Housing Finance Corporation Ltd (DHFL) hit an upper circuit of 5% at Rs 27.55 apiece on NSE after the debt-ridden mortgage lender said that its Committee of Creditors (CoC) has approved the resolution plan submitted by Piramal Capital and Housing Finance Limited, a Piramal Group company.

In a stock exchange filing on Sunday, the NBFC (non-banking finance company) said "the e-voting on resolutions pursuant to the Eighteenth (18th) meeting of the Committee of Creditors of the Company ("CoC") concluded on 15th January 2021 at 8 pm IST and the resolution plan submitted by Piramal Capital and Housing Finance Limited (under Option I in terms of the RFRP dated September 16, 2020) was duly approved by CoC by majority voting under section 30(4) of the Insolvency & Bankruptcy Code read with Reg. 39(3) of CIRP Regulations, as the successful resolution plan."

Piramal's bid received 94% votes as compared to 45% for the US-based Oaktree Capital.

In November 2019, the Reserve Bank of India (RBI) referred Dewan Housing Finance Ltd (DHFL), the third-largest mortgage lender, to the National Company Law Tribunal (NCLT) for insolvency proceedings.

DHFL was the first finance company to be referred to NCLT by the RBI using special powers under Section 227 of the IBC. The company's board was superseded prior to the NCLT proceedings and R Subramaniakumar was appointed as the administrator. He is also the resolution professional under the Insolvency and Bankruptcy Code (IBC).