Shares of debt-laden mortgage firm Dewan Housing Finance Limited (DHFL) may soon be de-listed from the stock market. The National Company Law Tribunal (NCLT) has approved the acquisition of DHFL by Piramal Capital and Housing Finance. For this the company had offered 37,250 crores. Lenders led by Union Bank of India supported Piramal’s bid to acquire DHFL as part of the resolution process under the IBC (Insolvency Act). Piramal Capital and Housing Finance will soon acquire DHFL.
DHFL owes Rs 5,370 crore to fixed deposit holders
According to sources, the shares of DHFL will be de-listed after its acquisition by Piramal Finance as per IBC guidelines and SEBI directions. However, a bench comprising HP Chaturvedi and Ravikumar Duraiswami has said that the final decision on the acquisition will depend on the decision of the National Company Law Appellate Tribunal (NCLAT) and the Supreme Court. The resolution plan has been approved by the RBI in February 2021, while the Competition Commission of India (CCI) approved it in April 2021. The promoters of the company had appealed to the Supreme Court with their offer. They wanted to stop this resolution process but the Supreme Court did not allow it. DHFL owes Rs 5,370 crore to fixed deposit holders. DHFL owes about Rs 91,000 crore to banks and financial institutions. After its sinking, the matter reached NCLT.
The resolution of DHFL assumes significance as it was the first company to be sent here after the government in November 2019 allowed financial service providers to be referred to the bankruptcy tribunal. It was sent to this tribunal after the RBI took the board of the company under its ambit.
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What is Share De-listing?
De-listing of shares can be voluntary or even on failure to comply with any law. Delisting usually occurs when a company ceases its operations, merges with another company, seeks to expand or reorganize. Or it declares bankruptcy, wants to become private or fails to meet listing requirements. When the delisting is voluntary, the company pays the investors and then withdraws its stock from the exchange. If the company does not comply with the rules then the stock exchange can also force the company to be delisted.
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