DHFL shares fall nearly 5% after RBI files application to initiate insolvency resolution process

New Delhi: Shares of Dewan Housing Finance Corporation on Monday fell nearly 5 percent to hit lower price band after the RBI filed an application to initiate the insolvency resolution process against the company. Shares of the troubled firm fell 4.83 percent to trade at Rs 19.70 on the BSE. On the NSE, the stock fell 4.83 percent to Rs 19.75. [caption id=“attachment_6023581” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] The Reserve Bank on Friday sent the troubled mortgage lender Dewan Housing Finance (DHFL) for bankruptcy proceedings , making it the first financial services player to go to the NCLT for a possible debt resolution. “The Reserve Bank today (Friday) filed an application for initiation of corporate insolvency resolution process (with the NCLT Mumbai) against DHFL under Section 227 of the insolvency and bankruptcy code,” the RBI had said in a statement. The city-headquartered pureplay mortgage lender becomes the first NBFC/HFC to go for bankruptcy resolution. As of July 2019, the home financier owed Rs 83,873 crore to banks, the National Housing Board, mutual funds and bondholders, including retail bondholders. Of this, secured debt is Rs 74,054 crore and Rs 9,818 crore is unsecured. The Reserve Bank on 20 November had superseded the board of the troubled Dewan Housing Finance Corporation (DHFL) due to governance concerns and defaults on various debt instruments. The central bank had also appointed R Subramaniakumar, the ex-managing director of Indian Overseas Bank as the administrator of the third-largest pureplay mortgage lender. (With PTI inputs)