(Reuters) - Dewan Housing Finance Corp Ltd’s shares fell over 8 percent on Tuesday, a day after ratings agency ICRA cut its rating on the housing finance company’s commercial papers.
ICRA downgraded its rating on Dewan Housing’s 80 billion rupees ($1.12 billion) worth commercial papers to “A2 plus” from “A1 plus”, citing the company’s ability to raise funds and generate new business.
The papers remain on watch with negative implications, ICRA added.
Dewan Housing, which has faced a beating this year amid allegations of mismanagement, said here the rating action was "uncalled-for" and not based on merit.
Investigative media outlet Cobrapost had alleged last month that loans from Indian state-run lenders were diverted by Dewan Housing to shell companies, including those linked to its controlling shareholders. Dewan has, however, denied lending to shell companies.
Dewan Housing’s shares fell as much as 8.3 percent to 125.45 rupees on Tuesday, in their biggest intraday percentage drop since Feb. 8, and were down 7.2 percent at 0429 GMT in a broader Mumbai market that was trading 1.3 percent lower.
The stock had lost 45 percent of its value this year as of last close, after shedding 57 percent in 2018.
($1 = 71.1310 Indian rupees)
Reporting by Tanvi Mehta in Bengaluru; Editing by Subhranshu Sahu