Indiabulls Housing Finance tanked 14 per cent to Rs 152.80. The stock has now plunged 18 per cent in the past three trading days on the BSE to fall below its qualified institutional placement (QIP) price of Rs 196.37 per share.
Indiabulls Housing Finance raised Rs 683 crore through the QIP. A QIP is a fundraising route that allows listed companies to raise capital through equity or equity linked instruments quickly. The company intends to use the proceeds from the share sale to augment its capital adequacy ratio and maintain liquidity to meet funding requirements of its business activities, it said in an offer document filed with the exchanges.
On September 14, 2020, rating agency Brickwork Ratings assigned ‘BWR A1+’ for the commercial paper issue while reaffirming ‘BWR AA+/AA’/Negative on the various debt issuances of Indiabulls Housing Finance Limited.
The rating reaffirmation factored in the company’s established market position in the housing finance sector, comfortable capitalisation with a moderate gearing level, strong liquidity and a diversified resource profile. However, the rating is constrained by the deterioration in asset quality and average profitability on account of the decreasing asset base and pressure on operating income.
“The outlook continues to be Negative, given the continued stress on asset quality due to the impact of COVID-19 on the domestic economy, pressure on profitability due to expected slippages in the developer loan book and resultant provision requirements. The company’s ability to revive growth and the improve asset quality and earnings profile through successfully building on the co-lending business model and avert any further deterioration in the portfolio performance over the near term will remain key rating monitorables,” Birckwork Ratings said in rating rationale.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.