DHFL shares stop trading on NSE, BSE; existing stock worth zero now

By: |
June 14, 2021 9:29 AM

Shares of Dewan Housing Finance Corporation Ltd (DHFL) stopped trading on the stock exchanges from today, as BSE and NSE informed investors over the weekend.

DHFL share priceEarlier last week, the company informed the bourses that NCLT had approved Piramal Capital & Housing Finance’s insolvency resolution plan with certain conditions.

Shares of Dewan Housing Finance Corporation Ltd (DHFL) stopped trading on the stock exchanges from today, as BSE and NSE informed investors over the weekend. In separate notifications, both the exchanges said that DHFL’s resolution plan provides for the delisting of equity shares of the Company. DHFL ended Friday’s trading session at Rs 16.70 apiece, after having hit the 10% lower circuit. The stock has seen significant trading in the last few weeks, even hitting upper circuits after the resolution plan was approved by the National Company Law Tribunal.

“Dewan Housing Finance Corporation Limited vide its announcement dated June 08, 2021 informed the Exchange regarding approval of the resolution plan by the Hon’ble National Company Law Tribunal (NCLT), Mumbai Bench which provides for delisting of equity shares of the Company,” the NSE notification on the delisting of DHFL shares read. BSE and NSE said that on June 9, DHFL stated that no value was attributable to the equity shares as per the liquidation value of the Company estimated by registered valuers appointed under the Insolvency and Bankruptcy Board of India. 

Earlier last week, the company informed the bourses that NCLT had approved Piramal Capital & Housing Finance’s insolvency resolution plan with certain conditions. NCLT has also appointed a seven-member monitoring committee for management and control of DHFL, until the new owner Piramal Capital’s resolution plan is implemented. According to the NCLT order, released over the weekend, existing shareholders of the company will have to walk away empty-handed. The order states that the interests of existing shareholders have been altered by the resolution plan with the value of 31,38,23,02 equity shares turning to zero. The market capitalization of DHFL was at Rs 524 crore on Friday’s closing bell.

Shares of DHFL saw heavy activity during the previous week with 44 lakh shares exchanging hands on the BSE on Tuesday and a whopping 1.46 crore on the NSE. During the latter half of the week, the stock continued to plummet.

Piramal Capital & Housing Finance will shell out Rs 37,250-crore for DHFL, according to the resolution plan. This will translate to 40% recovery for financial creditors on the total claim of Rs 87,082 crore. State Bank of India is a lead creditor to DHFL with admitted claims of Rs 7,170 crore. DHFL had gone bankrupt with more than Rs 90,000 crore in debt to various lenders, including banks, mutual funds and individual investors who kept fixed deposits with the company.

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