DHFL is the top loser on the BSE the moment the markets opened for trading. The stock opened with a loss of 10% at Rs.116.95 and went on to fall further, going down 17.5% to Rs.107.15.
On the 18th of May, CARE Rating had downgraded its ratings for the various instruments and the reason cited was - On account of limited progress in building up of liquidity, selling/ exiting riskier construction finance loans and delay in announcing a strategic investor for DHFL.
In this background, DHFL announced yesterday to its distributors via email that it has stopped accepting fresh public deposits and renewals of existing deposits with immediate effect. It also halted pre-mature withdrawals of existing deposits to help reorganise its liability management.
The company said that it will honour pre-mature deposit withdrawal requests in case of a medical or financial emergency, subject to fulfilment of appropriate documentation.
In the email, the company clarified that there has been no default on any of its borrowings. And said that the speculation surrounding its creditworthiness was unwarranted. It said, “We assure you that we stand committed to honouring all our liability payments, and have demonstrated this by repaying liabilities amounting to approximately Rs.30,000 crore since September 2018, without a single day's delay.”
But obviously, the moment any company stops accepting new deposits, it spooks the market; there have been too many such incidents in the past and no one wants to take a chance.