Oversubscribed NCD Issue of DHFL Makes Share Price Rise

DHFL drew a massive Rs.19,000 crore worth of subscriptions for its public issue of bonds. This reflects easy liquidity conditions and a yearning among investors to lock in high returns in a falling interest rate environment. The issue, which opened on Wednesday, anticipated to raise up to Rs.4,000 crore and was oversubscribed over 18 times. This is the highest ever subscription drawn by a non-convertible debentures issue.

This positive movement has led DHFL share price rise over 3%.

DHFL had provided ten diverse interest payment options to investors, including one linked to the Consumer Price Index. It had provided bonds in three, five, and ten-year tenures. Within these tenures, investors could opt for a monthly or annual payment of interest. These bonds are rated AAA by CARE and Brickwork Ratings.

Meanwhile, DHFL share price was trading at Rs. 232.30 with a rise of around 4%. The largest volume of subscription came from high net-worth individuals who put in more than Rs.9,000 crore, followed by a cumulative subscription of around Rs.5,000 crore from institutional investors.

The yield proposed by the company on the bonds for institutional investors ranged from 8.74% to 9.1%, while the yield for retail investors was between 8.33% and 9.3%. This is higher than most other AAA bonds traded in the market currently.

Mahindra and Mahindra Finance had issued the last major public issue of AAA bonds in June wherein it raised Rs.1,000 crore and had given a yield of 9% on 10-year bonds.

As an element of the issue, the company also offered CPI-linked bonds with the tenure of three years. The yield payable to institutional investors would be 4.08% above the CPI inflation rate. For retail investors, the yield would be a real rate of 4.18% above the prevailing inflation rate.

DHFL is identified among top 500 performing stock by Dynamic Levels. DHFL share price was trading in the middle of its closest support and resistance level of Rs. 220.20 and Rs. 228.40 respectively. The scrip opened at Rs. 226.20 and went as high as Rs. 233.50 intraday. DHFL share price touched the intraday low of Rs. 223.65. For more details on the stock, visit DHFL share price history page of Dynamic Levels website.