DHFL continues to touch new highs with 2nd immediate NCD offer
The housing finance company, Dewan Housing Finance Corporation offered Rs 10000 crore secured non-convertible debentures (NCDs) on Aug 29, which got oversubscribed on the first day itself. Amongst the subscribers, the institutional, corporate, and HNI categories got fully subscribed while retailers subscribed nearly Rs 1900 crores of Rs 3000 crore limit.
Earlier, in the beginning of August 2016, DHFL had offered NCDs which saw an overwhelming response with unmet demand from many investors. The stock of DHFL opened on a positive note and is trading at 287.7 levels with 2.6 per cent gains. The stock has seen a straight upside since 230 levels and is making new 52 week highs, daily on the charts.
The largest ever NCDs in Indian markets with attractive coupon rates of 9.05 to 9.25 per cent and forecasts of falling interest rates have generated a demand of over Rs 12500 crores. The NCDs had AAA rating by CARE and Brickwork. The NCDs were offered with annual tenor option of 3/5/7 years with annual frequency of interest payment.
The NCD proceeds will be used to repay the high cost debts and also for incremental lending. The company was able to trim down its bank liability from 72 per cent to 45 per cent in just two years and is striving further to bring it down to 30 per cent.