MUMBAI : Following a 34% fall in the shares of Indiabulls Housing Finance Ltd on Monday, Yes Bank and IndusInd Bank said in separate statements, without naming the non-bank, that their exposure to a large mortgage lender is fully secured.
Shares of Indiabulls Housing nosedived to an over five-year low after the Delhi high court admitted a plea on Friday to probe allegations of fraud in the firm. A fall in share prices of Lakshmi Vilas Bank after the RBI initiated prompt corrective action on the lender also put pressure on Indiabulls— on concerns over the planned merger of the two entities.
According to Indiabulls Housing’s FY19 annual report, both Yes Bank and IndusInd Bank are lenders to the company. Others include Allahabad Bank, Andhra Bank, Axis Bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank and Union Bank of India.
Documents from the Registrar of Companies showed that as of 31 December 2018, IndusInd Bank had a ₹500 crore term loan exposure to Indiabulls Housing and Yes Bank had ₹250 crore cash credit exposure to the mortgage lender.
Thereafter, according to an agreement dated 29 January, 2019, Yes Bank granted a term loan of ₹750 crore to Indiabulls Housing, with a moratorium of 12 months on the principal. Credit rating agency Icra said in a 30 August report that Indiabulls Housing has long-term bank facilities of ₹47,000 crore.
On Monday, shares of Yes Bank and IndusInd Bank fell 15% and 6.8%, respectively, on the BSE.