Sebi says no advisory issued to MFs against rollover of exposure to Indiabulls, DHFL

New Delhi: Capital market regulator Sebi on Friday said it has not issued any advisory to mutual funds against rolling over of their current exposure to Indiabulls Housing Finance and Dewan Housing Finance.

“It has been reported in certain sections of the media that Sebi has advised mutual funds not to roll over their current exposure to Indiabulls Housing Finance and Dewan Housing. It is clarified that Sebi has not issued any such advisory,” the regulator said in a statement.

The clarification follows Sebi seeking details from mutual funds about their exposure to all NBFCs and housing finance companies, amid concerns over liquidity in the system, according to sources. In recent days, shares of non-banking financial companies (NBFCs) and housing finance companies have taken a beating against the backdrop of IL&FS group entity defaulting on its debt obligations, triggering fears of liquidity crunch. The Securities and Exchange Board of India (Sebi) has sent letters to mutual funds seeking details about their exposure to all NBFCs and housing finance companies, regulatory and industry sources said. [caption id=“attachment_4310813” align=“alignleft” width=“380”]  Sebi logo. Pic courtesy: IBNLive[/caption] The companies include DHFL and Indiabulls Housing Finance, they added. Mutual funds have significant exposure to several housing finance firms and NBFCs as a whole, including through their debt securities. On Thursday, shares of NBFCs and housing finance companies tumbled up to 8.5 per cent on worries over liquidity. The scrip of DHFL declined nearly 5 percent to close at Rs 290.15, while that of Indiabulls Housing Finance plunged over 6 percent to end the day at Rs 937.20 on the BSE. Rating agencies – Crisil, Icra and Care – has re-affirmed the long-term credit rating of Indiabulls Housing Finance at the highest of ‘AAA’ with stable outlook, the company had said in a filing to the BSE on Tuesday. IL&FS Financial Services, a group company of IL&FS defaulted on one of its commercial paper (CP) issuances due for repayment on Monday. This was the third default by the company. On Thursday, the Reserve Bank allowed banks to dip further into statutory liquidity cash reserves in a bid to ease a liquidity squeeze afflicting the nation’s money markets. The move by the central bank follows concerns over tight liquidity conditions and banks’ unwillingness to lend to NBFCs.