Indiabulls Housing Finance fell 6.59% to Rs 184.85, extending recent steep losses.
Shares of Indiabulls Housing Finance lost 11.95% to its current market price of Rs 184.85 in two trading sessions from its previous closing high of Rs 209.95 on 11 October 2019.
Indiabulls Housing Finance announced after market hours yesterday, 14 October 2019, that it will consult Sebi about its eligibility to buy back shares given the regulations on the ideal capital structure.
"The board thought it prudent to first confirm with Sebi on the applicability of the debt-equity ratio of 6:1 as currently prescribed for subsidiary NBFC/HFC in the Govt Gazette dated 19th September 2019 to be also applicable if the NBFC/HFC is not a subsidiary but the parent listed company itself as is the case with Indiabulls Housing Finance", the company said in a statement.
The promoter informed the board that neither he nor any of his promoter companies intend to participate in the buyback.
The board noted the adverse impact on the share price following the circulation of rumours, fake news and unfounded allegations in social media, and the reproduction of these allegations in a PIL filed against the company concerning loans to leading developers extended in the normal course of the company's business as a housing finance company. The board directed the company to double-down on legal efforts to effectively counter these malicious attacks and also to explore complaining to regulatory authorities to investigate build-up of short positions coinciding with the circulation of rumours and false news about the company.
The board also advised the company to continue with its policy of paying 50% of profits as dividends, as has been the practise for the last 10 years. The board noted that the company is one of the top 10 dividend-paying companies in India, having paid Rs 10,530 crore (Rs 271 per share) in dividends over the last 10 years.
Meanwhile, Moody's Investors Service downgraded the corporate family rating and the foreign-currency senior secured rating of Indiabulls Housing Finance to B2 from Ba2. In addition, Moody's has downgraded Indiabulls' foreign and local currency senior secured MTN program ratings to (P)B2 from (P)Ba2. The outlook on all ratings, where applicable, remains negative.
The Reserve Bank of India on 9 October 2019 rejected the proposed merger of Laskhmi Vilas Bank and Indiabulls Housing Finance. In April 2019, Lakshmi Vilas Bank had announced the plan of amalgamating Indiabulls Housing Finance and Indiabulls Commercial Credit with LVB. Later, the bank had sought RBI's approval on 7 May 2019 for the proposed amalgamation.
Meanwhile, the S&P BSE Sensex was up 162 points or 0.42% to 38,376.88.
On the BSE, 11.29 lakh shares were traded in the counter so far compared with average daily volumes of 40.24 lakh shares in the past two weeks. The stock hit an intraday high of Rs 190.80 and an intraday low of Rs 182.20 so far during the day.
The stock hit a 52-week high of Rs 976.85 on 16 October 2018. The stock hit a 52-week low of Rs 176.60 on 11 October 2019.
Indiabulls Housing Finance's consolidated net profit fell 24% to Rs 801.53 crore on 4.5% decline in total income to Rs 3,886.12 crore in Q1 June 2019 compared with Q1 June 2018.
Indiabulls Housing Finance's primary business activities are to carry on business of investing and finance related activities and fee income, which mainly consists of financial service related fee income from services, selling of insurance products as a licensed corporate agent, and other related ancillary services.
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