Dewan Housing Finance Ltd (DHFL) share price tag hit 10 per cent upper circuit at Rs 22.85 apiece intraday on BSE, even as the debt-ridden business in an exchange filing stated that its shares would be delisted. Analysts recommend investors to remain away from DHFL stock, as it may possibly be written down to zero quickly. Also, investors who at the moment hold DHFL shares are advised to exit and book what ever their profit or loss. Yesterday, DHFL stated in an exchange filing that the Mumbai bench of the National Company Law Tribunal (NCLT) authorized Piramal Capital & Housing Finance Ltd’s insolvency resolution program with particular situations.
“As part of the Resolution Plan, the equity shares of the company are proposed to be delisted,” it stated in a BSE filing. The shares, when delisted, would most probably turn into worthless. The resolution program had currently received approvals from the RBI in February and the Competition Commission of India (CCI) in April 2021.
DHFL stock at upper circuit: What should really investors do now?
DHFL shares had been locked in a 10 per cent upper circuit for the second straight day on Tuesday. Since June 2, the stock price tag has been mapping an upward trajectory, surging 27 per cent to date. India’s biggest brokerage firm Zerodha, in a tweet, warned investors that the worth of DHFL shares may possibly be written down to zero. “Equity shares of DHFL are likely to be extinguished as part of acquisition of the company due to NCLT’s insolvency process. There can be a significant risk of you losing your entire investment by trading in this stock,” it stated in a tweet. It also stated that DHFL stock is at the upper circuit price tag today simply because there are no sellers. “Buy order will remain pending until filled,” it added.
Given that $DHFL may possibly be delisted and the worth of the shares may possibly be written off to zero, this is the nudge we are displaying on Kite to warn customers of the dangers. pic.twitter.com/0cml99TEgG
— Zerodha (@zerodhaonline) June 8, 2021
Deepak Shenoy, Founder, Capital Mind, also asked investors to remain away from DHFL shares as the resolution program stated that the company’s whole share capital (all present shares) will be cancelled. “This will happen soon. Means the shares being traded now are a ticking time bomb,” Deepak Shenoy stated in a tweet.
Adding to this once again: DHFL SHARE WILL GO TO ZERO.
Please do not purchase this. The resolution program states that the company’s whole share capital (all present shares) will be cancelled. This will occur quickly. Means the shares getting traded now are a ticking time bomb.
— Deepak Shenoy (@deepakshenoy) June 8, 2021
Analysts recommend that at the present levels, it is improved to sell and exit the stock. “Even as the stock is hitting 10 per cent upper circuit, it is advisable to book profit and exit the stock, as DHFL is soon going to be delisted,” AR Ramachandran, Co-founder & Trainer, Tips2Trades, told TheSpuzz Online. Analysts also recommended investors to not fall prey to hearsay on DHFL. “It is advisable to consider squaring off positions in DHFL as there is a risk of losing the entire investment made in the stock because when a company becomes insolvent, existing capital may be written off to zero,” Likhita Chepa, CapitalBy way of Global Research, told TheSpuzz Online.
Piramal Capital & Housing Finance’s Rs 37,250-crore offer you for DHFL implies about 40 per cent recovery for the monetary creditors on a total admitted claim of Rs 87,082 crore. State Bank of India (SBI) is a lead creditor to DHFL with admitted claims of Rs 7,170 crore. DHFL had gone bankrupt with more than Rs 90,000 crore in debt to numerous lenders, which includes banks, mutual funds and person investors who kept fixed deposits with the business.
(The stock suggestions in this story are by the respective investigation analysts and brokerage firms. TheSpuzz Online does not bear any duty for their investment tips. Capital markets investments are topic to guidelines and regulations. Please seek advice from your investment advisor just before investing.)