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DHFL hits 52-week low on report of government probe; stock plunges 40% in five days

DHFL hits 52-week low on report of government probe; stock plunges 40% in five days

Shares of Dewan Housing Finance Corporation (DHFL) continued losing streak on Thursday and tumbled nearly 20 per cent in intra-day to touch a 52-week low of Rs 129.60 after media report suggested that government launched probe into allegations of Rs 31,000 crore scam.

In the last five trading sessions, the DHFL share price nosedived over 40 per cent, while it lost 71.49 per cent during the last one year.

India’s Ministry of Corporate Affairs will look into allegations against Dewan following a report by investigative media outlet Cobrapost, two government sources with direct knowledge of the matter told Reuters on Wednesday. The sources also claimed the probe has been launched.

Weighed down by the development, shares of the company declined as much as 19.80 per cent to touch 52-week low of Rs 129.60 apiece on the BSE, after making a negative start at Rs 156.95 against a previous closing price of Rs 161.60.

Paring some of losses, the midcap stock closed 15.93 per cent, or 25.75 points, lower at 135.85 level on Wednesday.

In a similar trend, stocks of company settled 16.41 per cent lower at Rs 134.95 on the National Stock Exchange.

On the BSE, as much as 129.36 crore shares have changed hand on the counter so far as against the average daily volumes of 0.92 crore shares in the past two weeks.

On Tuesday, investigative news portal Cobrapost had alleged that DHFL promoters siphoned off more than Rs 31,000 crore of public money in one of the biggest financial scams ever. The alleged scam was pulled off through grants of loans and advances to shell companies. Money was also allegedly routed through dubious companies and parked outside India to acquire assets, Cobrapost claimed.

Rejecting the allegations, the company had said that the mischievous misadventure by CobraPost with a mala fide intended to cause damage to the goodwill and reputation of the company resulting in erosion in shareholder value.

It added: “Their entire approach raises serious concerns about the motivation of this so-called expose. It is necessary in public interest that if they believed in the genuineness of their issues to have given DHFL an opportunity to explain the facts that are in any case available in the public domain.”

The exchange has also sought clarification from the company in this regard. The housing finance company in its response said that it has not received any communication from the Ministry of Corporate Affairs in relation to any probe against the company and therefore deny the contents of the news item.

Meanwhile, the BSE 30-share barometer, Sensex, rallied as much as 665 points to close at 36,256.69 on Thursday as a dovish stance by the Federal Reserve boosted sentiment.

[“source-businesstoday”]