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Shorter Beware
These are the real facts.
DHFL has always been retail HFC with very small exposure to financing builders which is much lower than for HDFC and others in sector.
It has been financing retail clients for over 30 years with low ticket sizes of 17 lakhs today and has more than 350 branches.
Retail loans is more than 80% of assets mainly to low and middle income people. This ratio of retail is higher than HDFC which is 72% and most other player in housing industry.
Dhfl has smallest proportion of CP’s in industry at 7% of liabilities versus 15-20% for others.
HDFC is close to 15-18% CP, PNB Housing is 19%, Cholamandalam (NS:CHLA) is 11%.
After repayment of all CP’s by DHFL in November, they will have no CP and only long term loans.
Funds from banks are 36% while long term NCD’s will be 38%. They also have 11% deposits and the balance is mix of NHB refinance and ECB’s.
Sell down of loans to banks is big positive for DHFL because of small ticket size of loans company makes with low LTV.
Company has good asset liability match. Market is pricing too much bad news for company. DHFL has got lot of awards from Government and ministry for role in promoting housing for all (PMAY and CLSS) to low middle income group.
Long term investors will make significant gain like in 2008, 2013 and 2015.
