MUMBAI: Dewan Housing Finance, the flagship company of Wadhawan Global Capital, is set to raise about Rs 1,500 crore via bond sales even as liquidity conditions at Indias para-banks continue to dominate national headlines.
LIC of India is expected to subscribe to those long-dated papers that may open for subscription this week on the electronic bidding platform of stock exchanges, three people familiar with the matter told ET.
An email sent to DHFL and LIC remained unanswered until the publication of this report.
Bonds would be of 10-year maturities and are likely to yield in the range of 9.50-10%, dealers said. The rate would be about 50 basis points higher compared with the last long-term bond sales in July-August. The differential between the benchmark bond yield and corporate bonds has widened since the last issue due to liquidity concerns at non-banking finance companies (NBFCs).
Since September 21 this year, DHFL has repaid outstanding commercial papers (CP) of about Rs 9,465 crore, including the buyback of CPs worth Rs 3,240 crore, the company said in a separate statement Monday as its shares plunged in early trading.
DHFL stock declined 4.6% to close at Rs 219.90 Monday amid liquidity concerns. The stock had fallen to a low of Rs 204.
“DHFL has taken strong steps to rebalance its loan growth profile, maintain sufficient liquidity and strengthen its core balance sheet,” said Kapil Wadhawan, CMD, DHFL, in a statement.
The NBFC has either repaid or offered to buy back all commercial papers maturing until November 15 this year, the company said. On Monday, it bought back or repaid CPs worth Rs 1,775 crore.
“DHFL has provided for CPs maturing until November 30, 2018,” it said in the statement.
On November 5, ET reported Indiabulls Housing Finance was also in the process of raising Rs 2,500 crore in two separate bond sales where insurance companies, banks, and mutual funds are likely buyers.
In the short-term CP market, daily primary sales volume was at Rs 17,107 crore, with the share of NBFCs rising. The level was around Rs 9,500 crore Thursday.
Can Fin Housing, Shriram City Union, HDB Financial, Magma Fin Corp, Muthoot Fin Corp, Piramal Enterprises, Axis Finance, IIFL Wealth Finance, and Tata Capital have tapped the market to raise a few thousand crores of rupees, showed data from the Clearing Corporation of India (CCIL).