The ban will come into effect from June 14. The stock continued to be traded on both the exchanges despite the company formally informing the exchanges that the worth of equity shares is zero.
(File Image: PTI)
The Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE) have suspended the trading in equity shares of Dewan Housing Finance Corporation Limited (DHFL). The ban will come into effect from June 14, both the exchanges noted in their respective circulars.
The BSE and NSE circulars stated that DHFL had informed the exchanges on June 8 regarding approval of the resolution plan by the National Company Law Tribunal (NCLT), Mumbai Bench “which provides for delisting of equity shares of the company”.
The resolution plan, approved by NCLT in the successful bid of Piramal Group for DHFL, envisaged zero value for the shares of DHFL. Despite this the stock was allowed to be traded.
Also Read | DHFL Insolvency Case: NCLT approves Piramal Group’s resolution plan
The BSE and NSE circulars added that the DHFL on June 9 stated that “no value was attributable to the equity shares as per the liquidation value of the company estimated by registered valuers appointed under the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016”.
Further, the company has also mentioned that the written order of the NCLT approving the Resolution Plan is still awaited and all disclosures made remain subject to such orders, the circulars said.
“In pursuance of Regulation 3.1.2 of the National Stock Exchange (Capital Market) Trading Regulations P. A. and for reasons mentioned above it is hereby notified that the following security will bc suspended from trading w.e.f. June 14, 2021 (i.e. closing hours of trading on June 11,2021),” the NSE stated.
The DHFL stock was allowed to be traded on June 8 and June 9. It was also allowed to rise 10 percent (the maximum permitted as per the applicable price band). Over 14 crore shares were traded on NSE alone and investors took delivery of over 9 crore shares valued close to Rs 200 crore.
The stocks continued to be traded on both the exchanges despite the company formally informing the exchanges that the worth of equity shares is zero. About 5 million shares were traded on June 9 as well.
DHFL, a non-banking finance company with focus on housing finance, came under crisis in mid-2019. The company’s commercial paper – short-term debt instruments – were downgraded to “D”, meaning default in June that year. The company began defaulting on a spree of payments, and is estimated to owe over Rs 90,000 crore to its lenders.
