AION Capital may invest in DHFL, would be largest shareholder once deal is through

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The troubled Dewan Housing Finance (DHFL) may see an infusion from private equity (PE) firm AION Capital, involving a possible rights issue, reports The Economic Times.

The firm is a joint venture (JV) between Apollo Global Management and ICICI Venture. American PE firm Lone Star is the other contender. The promoter has approached the regulator and DHFL may sign a non-binding agreement for the same, the report added.

There was a debate on whether DHFL’s profitable businesses would be sold off to tide over the crisis. A significant portion of the distressed company’s wholesale loan business may go to Oaktree Capital, while the retail business to various PE firms, and DHFL Pramerica Life Insurance to Lone Star.

It had already sold assets via securitisation and raised Rs 900 crore through sale of loan portfolios to make payments to investors in commercial papers (CP) and short-term debt instruments. Another Rs 2,700 crore was raised through the sale of Aadhar Housing Finance to Blackstone.

Earlier, Kapil Wadhawan, who leads the promoter group, had expressed willingness to step down as Managing Director and run the company. The Wadhawan family currently holds 39.21 percent stake in DHFL.

In May, domestic rating agencies ICRA and Crisil downgraded the company’s rating on Rs 850 crore worth of CP to ‘default’, down from ‘A4’ due to the mortgage lender’s deteriorating liquidity condition. The rating of the company, which defaulted on debt repayment in June, was removed from the watch with negative implications by both the rating agencies.Subscribe to Moneycontrol Pro and gain access to curated markets data, exclusive trading recommendations, independent equity analysis, actionable investment ideas, nuanced takes on macro, corporate and policy actions, practical insights from market gurus and much more.


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