Dewan Housing to exit mutual fund business

Dewan Housing Finance Corporation Ltd (DHFL) will completely exit from the mutual funds business by selling its stake to its US-based joint venture partner PGLH of Delware.

This move comes at a time when there is a liquidity crunch in non-banking finance company and housing finance company sector.

On Tuesday, Mumbai-based finance company announced disinvestment plans after the Board gave an approval to the proposal.

In a regulatory filing, DHFL said, "The Board...considered and accorded approval to disinvest to PGLH of Delaware, Inc. the entire shareholding held in DHFL Pramerica Asset Managers Private Limited..." held directly and indirectly in its mutual funds business.

DHFL directly holds 17.12% in DHFL Pramerica Asset Managers Private Ltd. The balance stake is indirectly held by the company through its wholly owned subsidiary DHFL Advisory & Investments Private Ltd at 32.88% and another 50% by DHFL Pramerica Trustees Private Ltd.

US headquartered PGLH of Delware is owned by Prudential Financial.

On Tuesday, DHFL, DHFL Advisory & Investments Private Limited and PGLH of Delaware entered into a binding term sheet.

For the year ended March 31, 2018, DHFL Asset Managers had reported a revenue of Rs 129.74 crore, as against a revenue of Rs 109.67 crore the previous year. The company's profit stood at Rs 7.76 crore in fiscal 2018 as compared to Rs 7.64 crore profit in the previous year.