Share buyback plan fails to lift Indiabulls Hsg; stock hits over 5-yr low

The stock, which is trading at its lowest level since March 2014, has seen its market capitalisation fall below Rs 10,000 crore-mark in past two weeks.

Despite announcing a share buyback plan, Indiabulls Housing Finance plunged 20 per cent on the BSE to hit an over five-year low of Rs 193 on Thursday after the Reserve Bank of India (RBI) on Wednesday rejected its proposed amalgamation with Lakshmi Vilas Bank (LVB). The stock of housing finance company was trading at its lowest level since March 2014.

Yesterday, Indiabulls Housing Finance announced that the board of directors would meet on Monday, October 14, 2019 to consider the proposal of buyback of equity shares of the company. The announcement came after the RBI did not approve the HFC's proposed merger with LVB.

“Now that the merger will not happen with the bank, the uncertainty of last 5 months on the business is lifted and the company will focus on its growth of the core business of housing finance,” the company said in a regulatory filing.

From its core business, the company has paid a total of Rs 10,530 crore in dividends translating to total dividends of Rs 271 per share on a Rs 2 paid up share to its shareholders in the last 10 years. The company will continue with its policy of quarterly dividends going forward, it added.

In the past two weeks, the market price of Indiabulls Housing Finance has plunged 53 per cent after a public interest litigation (PIL) was filed against the company in the Delhi High Court. In comparison, the S&P BSE Sensex was down 2.5 per cent during the same period.

“The Hon’ble High Court has listed the matter for 13th December 2019 to allow respondent company to place on record relevant documents in support of its rebuttal to the allegations contained in the PIL which has been filed at behest of Mr. Prashant Bhushan,” Indiabulls Housing Finance said in a regulatory filing.  CLICK HERE TO READ FULL REPORT.

A sharp fall in the market value of Indiabulls Housing Finance pushed its market capitalisation (market-cap) below Rs 10,000 crore mark for the first time since May 13, 2014. With a market-cap of Rs 8,480 crore (at 11:01 am), Indiabulls Housing Finance has slipped below 200-benchmark and is placed at 145th position in market-cap ranking as on September 26, 2019.

Besides Indiabulls Housing Finance, other Indiabulls Group stocks like Indiabulls Ventures (down 7 per cent at Rs 101), Indiabulls Real Estate (down 5 per cent at Rs 41) and Indiabulls Integrated Services (down 5 per cent at Rs 95) were down in the range of 5 per cent to 7 per cent on the BSE. In comparison, the benchmark index was down 0.23 per cent at 38,088 points.