Sensex Trades Over 1600 Points Lower; Dow Futures Down By 103 Points

The resolution plan has been approved by the Committee of Creditors (CoC).

In November 2019, the RBI had referred DHFL, the third-largest pure-play mortgage lender, to the NCLT for insolvency proceedings. It was the first finance company to be referred to NCLT by the RBI using special powers under Section 227 of the Insolvency and Bankruptcy Code (IBC).

Prior to that, the company's board was superseded and R Subramaniakumar was appointed as the administrator. He is also the resolution professional under the IBC.

The company is being investigated by the ministry of corporate affairs from December 2019 through the Serious Fraud Investigation Office (SFIO). The Enforcement Directorate is also probing the company in connection with loans given by it to certain borrowers.

The financial creditors have claimed an outstanding worth of Rs 870 billion from DHFL.

How this pans out remains to be seen. Meanwhile, stay tuned for more updates from this space.

At the time of writing, DHFL share price was trading up by 4.8% on the BSE.

Moving on to news from the automobile sector...

Ashok Leyland to Acquire Nissan International's 38% Stake in Hinduja Tech

Ashok Leyland has entered into a share purchase agreement with Nissan International Holding BV to acquire the latter's stake in Hinduja Tech (HTL).

The commercial vehicle major informed the BSE that it has entered into a share purchase agreement with Nissan International Holding BV to acquire 58.5 million shares for a total consideration of Rs.702 million constituting 38% in the paid-up share capital of HTL.

Consequent to the aforesaid acquisition, HTL will become a wholly-owned subsidiary of the company.

HTL works in the information technology (IT) & ITeS space. In FY20, the company reported a profit of Rs 159 million as against Rs 143 million in the year-ago period. The company's revenue stood at Rs 2.3 billion in 2019-210 as compared to Rs 2.1 billion in the corresponding period of the last year.

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Disclosure: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research ...

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