個案資料

Dewan Housing Finance Corporation Limited defaulted on repayment of its financial obligations in June 2019, and in December 2019, shortly after the Reserve Bank of India superseded its board, it was subjected to the Corporate Insolvency Resolution Process of India’s Insolvency and Bankruptcy Code. Because it was the first financial services provider to be subjected to the resolution process, the lenders—known as the committee of creditors—of the troubled company had to select the most appropriate resolution plan among the multiple bids they received. The poor financial position and high level of risk owing to exposure to the wholesales/corporate sector made the lenders’ prospects of recovery bleak and rendered the company less valuable for any prospective takeover or merger. The resolution of the first financial services provider subjected to the resolution process provided a test case for how a committee of creditors could deal with complex issues and still salvage the interests of the different stakeholders, including the secured and unsecured lenders and retail deposit holders.

This case can be positioned in postgraduate-level courses in banking and financial services, corporate finance, and corporate restructuring. It can also be used in courses related to resolving financial distress, insolvency, and bankruptcy. The case study aims to acquaint the readers with the events surrounding the bankruptcy of a non-banking finance company primarily engaged in affordable housing finance with a significant pan-India presence. After working through the case and answering the assignment questions, students will be able to do the following:<br><ul><li>Understand the different aspects of the collapse of a non-banking finance company, including the accompanying changes in credit ratings and stock prices as well as exits of key management personnel.</li><li>Highlight the important aspects of liquidity and asset-liability management in banks, financial institutions, financial service providers, and non-banking finance companies.</li><li>Understand how to analyze financial statements and look for any deviations that could help predict stress or imminent failure.</li><li>Understand the aspects of the resolution of financial distress in the context of financial institutions and the assessment matrix employed by the lenders.</li></ul>

• Financial distress
• Housing finance company
• Insolvency