Indiabulls Housing Finance Slumps 20% On Revealing Yes Bank Exposure

Shares of Indiabulls Housing Finance Ltd fell as much as 20 percent in trade on Monday to an intraday low of Rs 203.80 apiece after the NBFC provided an update on its exposure to Yes Bank.

In a stock exchange filing on Sunday, Indiabulls Housing Finance said that the troubled private bank owes the NBFC (non-banking finance company) Rs 662 crore via AT-1 (Additional Tier-1 Basel III Capital) bonds.

"We wish to inform that Yes Bank owes to Indiabulls Housing Finance Rs. 662 cr via AT-1 Bonds. The investments in AT-1 bonds of Yes Bank were made in 2017, as a part of its treasury management of over Rs. 20,000 crores of cash and when Bank was worth over $10 billion in value," it said.

"Indiabulls Housing Finance has no term loans outstanding from Yes Bank," the statement further said adding that Sameer Gehlaut, the NBFC's promoter, or any of his companies or any of his family member companies have no loans outstanding from Yes Bank.

In RBI's draft scheme for reconstruction of Yes Bank, the central bank proposed writing down these bonds permanently. The scheme, which is open for comments till 9 March, reads, "The instruments qualifying as additional tier-1 capital, issued by Yes Bank under Basel-III framework, shall stand written down permanently, in full, with effect from the appointed date."

The proposal has caught the bond markets by surprise as at least 28 mutual fund companies including Nippon Life India AMC, Franklin Templeton, UTI Mutual Fund, SBI Pension Fund Trust have exposure to these bonds issued by the private bank, that is now placed under moratorium by RBI.

The State Bank of India (SBI) is likely to finalise its rescue plan for the bank on Monday based on the draft scheme.