All outstanding borrowings of Dewan Housing Finance Ltd. has set to ‘Default’ grade by Care Ratings as the non-bank lender missed interest payments on non-convertible debentures on Tuesday.
Care Rating’s reason for downgrading all of DHFL’s borrowings is similar to that offered by CRISIL and ICRA, which cut the rating on the non-bank lender’s Rs 850 crore commercial paper program to ‘Default’ on Wednesday. The rating agency quoted increased liquidity pressures being faced by the company and delays in bringing in a strategic investor as the reason behind the downgrade.
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The rating company said, “the liquidity profile of the company continues to remain stressed on account of delay in identification and induction of strategic investor and limited progress on generating additional liquidity mainly through builder loan book sell down and securitization.”
As on March 31, 2019, there has been a deterioration in the liquidity profile of DHFL with cash and liquid investment decreasing from Rs. 4,668 crore to Rs 2,775 crore as on April 30, 2019, said Care Rating.