Indiabulls shares plunge again

Mumbai: Shares of Indiabulls Housing Finance and other group companies fell for a second day on Tuesday even after the company denied charges made by MP and BJP leader Subramanian Swamy of embezzlement of more than Rs 1 lakh crore from the National Housing Bank (NHB).

Indiabulls Housing Finance Vice Chairman and MD Gagan Banga, denying charges, said that in its 14 years as a housing finance company, the firm had never taken any refinance from the NHB.

However, a market analyst, who requested not to be named, told Financial Chronicle that Indiabulls Group was in a structural downtrend as its business model had been shaken. Its problems with debt were an issue the market was aware of and Swamy's letter was just adding fuel to the fire, the analyst said, adding that Swamy's allegations were not new.

"The stock of Indiabulls Housing Finance has been falling for quite a long time and could fall further in the near future, as the company has not been showing performance that the market was expecting. In such a situation, smart investors are shorting the stock while innocent investors are getting caught," the analyst said.

Even IndusInd Bank CEO Romesh Sobti's statement, in an interview, that "One or two NBFCs may sink, it's a free market," also dented market sentiments.

It’s a fight between banks and non-banking finance companies, the analyst said, adding, earlier NBFCs had taken banks' business now it’s the other way round.

Deven Choksey, Managing Director, K R Choksey Shares & Securities, said, "Today suspicious outcome is being taken as a negative (for stocks), nobody wants to take a call (on such stocks) as a fear psychosis has gripped the market."

On Tuesday, Indiabulls Housing Finance shares fell another 6.25 per cent after over 10 per cent fall on Monday. Its shares opened in the green in the morning trade on the stock exchanges and touched a high of Rs 579.55, gaining over 3.6 per cent on the BSE, but gave in to selling pressure in the second half of the trading session and the share fell to a low of Rs 516.30 and closed 6.25 per cent down at Rs 524.05.

Another group company Indiabulls Real Estate fell by 11.45 per cent to Rs 89.30 and dipped to a low of Rs 86.20 in the intra-day trade.

Indiabulls Venture fell 7.77 per cent to close at Rs 237.45, recovering partially from the intra-day low of Rs 228.70.

During the market hours, Indiabulls Housing Finance informed stock exchanges about its offer to debenture holders for premature redemption of the non-convertible debentures (NCDs) held by them worth Rs 659 crore maturing in September 2019.

“The process of offer and buyback / pre-mature redemption of these NCDs will be completed by August 14, 2019,” the company said.

The company had earlier on July 29 also informed stock exchanges about timely payment of interest for NCDs issued by it on a private placement basis.