Dewan Housing awaits money from Blackstone to avert payments default

Of the total money deposited by Unitech, the apex court has allowed release of Rs 40 crore for completion of pending works
Investors in rupee corporate bonds are waiting to see whether Dewan Housing Finance Corp. will repay Rs 125 crore of bond payments due this month, and help avoid a further worsening in sentiment in India’s credit markets.

Dewan is already behind schedule in meeting debt obligations as it missed paying Rs 960 crore of interest that was due on Tuesday on bonds, a company official said, adding that the debt would be serviced in the next seven days. The home financier is expected to get money from Blackstone Group LP on Monday from a previously agreed group unit sale.

That will help the lender repay obligations during the so-called cure period of seven days, and also other maturities that will be up for redemption.

Timely repayment by Dewan Housing will help allay wariness in the nation’s credit markets, where infrastructure financier IL&FS Group’s default last year has prompted investors to stay away from debt of shadow lenders. The funding crunch in the shadow banking sector could weigh further on Indian economic growth, which has already slowed to a five-year low, as borrowers find it harder to raise cash.

Shares of Dewan Housing slid 13.5% as of 2:12 p.m. in Mumbai on Friday, taking this week’s drop to 27%, the second-biggest decline on the S&P BSE 200 Index.

Credit market stakeholders will be watching out for following payments for Dewan Housing.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel