The major exchanges BSE and NSE will suspend trading in Dewan Housing Finance Corporation Ltd (DHFL) shares with effect from Monday.
The measure, which aims to avoid “market complications”, has as its backdrop the National Court of Corporate Law (NCLT) which approves the Piramal Group’s resolution plan for the bankruptcy of DHFL.
The resolution plan under the Bankruptcy and Insolvency Code (IBC) was approved by the court on 7 June.
In separate but similarly worded circulars issued on Friday, BSE and NSE said they would suspend trading in DHFL shares from June 14th.
The approved resolution plan provides for the company’s delisting.
According to the circulars, the company made an announcement on June 9, saying that “no value was attributable to the equity shares according to the company’s liquidation value as estimated by registered appraisers appointed by the Indian Bankruptcy and Insolvency Board ( Insolvency Resolution Process for Corporate Persons), 2016”.
According to the circular issued by BSE, “to avoid market complications, trading in Dewan Housing Finance Corporation Limited bonds will be suspended on June 14, 2021.”
In November 2019, the Reserve Bank of India (RBI) referred the DHFL – then the third largest pure mortgage lender – for settlement under the IBC. It was the first finance company to be referred to NCLT by the RBI using special powers under Section 227 of the IBC.