National Housing Bank Raises Refinance Limit For Housing Finance Companies
The National Housing Bank has increased the refinance limit to Rs 30,000 crore for housing finance companies for 2018-19 in view of the current liquidity position of the sector, according to an official release.
The housing finance regulator had originally set the refinance target at Rs 24,000 crore for 2018-19 beginning July this year. The move will help alleviate the liquidity crunch that the sector is facing following series of defaults by group companies of IL&FS Ltd.
Shares of most of the housing finance firms, including DHFL, have been hammered on the bourses in the past few weeks due to liquidity concerns triggered by debt defaults by IL&FS.
"Now, eligible housing finance companies and other entities will have increased availability of funds", the Finance Ministry said in the release, calling it a credit flow to such companies.
As a regulator, it said, the NHB regularly monitors the liquidity position of housing finance companies. The statement further said that till date, Rs 8,835 crore had been sanctioned.
The NHB is the principal agency to promote housing finance institutions, currently numbering 97, and to provide financial support to eligible institutions.
Stock of housing finance firms Dewan Housing Finance Corporation Limited closed 18.52 percent lower at Rs 223.50 on BSE.
Among others, Edelweiss Financial Services Ltd. closed lower by 13.67 percent, Shriram City Union Finance Ltd. was down 6.82 percent, Cholamandalam Investment and Finance Company Ltd. dropped 6.07 percent while Muthoot Capital Services Ltd. was down 4.48 percent. Motilal Oswal Financial Services Ltd. fell 2.48 percent today.
However, Indiabulls Housing Finance Ltd. today gained 3.26 percent to close at Rs 939.85 apiece.