Indiabulls Housing Finance posts 44 pc decline in net profit to Rs 547 crore for Dec quarter

Indiabulls Housing Finance Ltd (IBHFL) on Wednesday reported a 44 per cent decline in its consolidated net profit to Rs 546.87 crore in the third quarter ended December 31, due to a fall in income.

It had registered a net profit of Rs 972.82 crore in the corresponding October-December quarter of the previous fiscal.

The company's total income in the December 2019 quarter fell to Rs 3,369.76 crore as against Rs 4,477.97 crore a year ago, it said in a regulatory filing.

The firm's interest income was down at Rs 2,669.54 crore, compared with Rs 3,697.39 crore in the year-ago period.

On a standalone basis, the net profit was down at Rs 377.23 crore from Rs 952.66 crore, while the income decreased to Rs 2,976.14 crore from Rs 4,045.69 crore, Indiabulls Housing said.

Further, the board has also considered and approved the proposal of issuing secured non-convertible debentures and unsecured, redeemable, non-convertible subordinate debt in the nature of debentures (NCDs) up to Rs 5,000 crore, on a private placement basis, in one or more tranches, from time to time, it said in the filing.

The board also declared an interim dividend of Rs 6 per equity share for 2019-20, whose record date is February 15.

It also said the Citizens Whistle Blower Forum has filed a Public Interest Litigation (PIL) before the Delhi High Court wherein certain allegations have been made against Indiabulls group.

"The company has vehemently denied the frivolous allegations that have been made without basic research or inquiry.

"The company has also filed a perjury application wherein a notice has been issued. The management has concluded that the allegations made in the writ petition has no merit and no impact on the financial statements. The matter is sub-judice and pending before the Delhi High Court," it said.

The PIL has alleged that monies loaned by Indiabulls to various companies were routed back to its promoters through other entities.

The NGO, whose members include advocate Prashant Bhushan, former Delhi High Court Chief Justice A P Shah, former Chief of Naval Staff Admiral L Ramdas, and former IAS officer Aruna Roy, has sought a direction to the Ministry of Corporate Affairs (MCA) to order an investigation by SFIO into the irregularities alleged against Indiabulls.

The petition has also sought a direction to the RBI and the National Housing Bank to investigate the financial affairs of IBHFL and to direct a special audit of the company.

The housing finance company (HFC) sector has gone through a cyclical shift. Even as the liquidity situation normalises, the fundamental realisation is that the business model has to be a lot more asset-liability management (ALM) matched and conducive to generating a sustainable return on assets without borrowing short via commercial papers, according to the company's statement.

"The earlier model where we would get approval from banks for specific transactions has changed to getting securitisation lines that allow us to not resort to any short-term borrowing, even intra-quarter.

In our view, HFCs will have to collaborate with banks and build a model around securitisation and co-origination rather than compete with banks, it said.

Over the course of the next 24-36 months, the company said it expects that certain important changes will happen for the HFC industry and for IBHFL.

Shares of IBHFL on Wednesday closed at Rs 276.75 apiece, down 0.05 per cent on the BSE.