Indiabulls management allays cash crunch, stock tanks

MUMBAI: The stock price of

Indiabulls Housing Finance

, one of the fastest growing home loan companies, crashed 34% on Monday. The scrip tanked after a Delhi high court bench issued notices to the company’s promoter, markets regulator Sebi, RBI,

National Housing Bank

, Serious Fraud Investigation Office (SFIO) and the central government on a PIL filed by an NGO to investigate the company for dubious loans.


The stock on the BSE closed at Rs 256, down from Rs 389 on Friday. The company’s top management — on a conference call with global investors and analysts — said it had enough liquid assets to meet all payment obligations till March 2020 and sounded optimistic about its merger with Lakshmi Vilas Bank (LVB).

Earlier in the day, market sentiment had turned negative after RBI put LVB — with which

Indiabulls

Housing Finance is planning a merger — under preventive corrective action (PCA), an order that limits the bank’s operations substantially.

The recent developments have put a question mark on the merger, though the merged entity should be out of PCA comfortably on a consolidated basis. Rumours about Indiabulls’s substantial exposure to Anil Ambani’s Reliance Group as well as to real estate major DLF also weighed on the stock price, dealers said.

In the conference call, the

Indiabulls management

said that it had no exposure to the Reliance Group and its loan of Rs 38 crore to DLF was repaid last week. Some analysts who attended the call said that the management was confident that its merger proposal with LVB should get the regulatory nod by November. It also said that it had about Rs 20,000 crore worth of liquid assets to meet all its financial obligations till March 2020.