Indiabulls sinks 34% amid pressures

Bloomberg

Indiabulls Housing Finance Ltd suffered the worst decline since its 2013 initial share sale after India’s central bank placed curbs on a lender it plans to acquire, extending Friday’s slide sparked by a court probe into allegations of fraud.
The stock crashed as much as 38 percent before closing 34 percent lower at 255.9 rupees, the lowest in five years and the worst performance on the MSCI Emerging Markets Index.
The company’s $350m 6.375 percent notes due on 2022 slid to a record low of 80 cents, according to prices compiled by Bloomberg.
India’s central bank placed lending restrictions on Lakshmi Vilas Bank Ltd, which was seeking a merger with Indiabulls, according to a filing. Separately, the Delhi High Court agreed to hear a petition to probe Indiabulls over allegations that it gave out “dubious loans.”
The merger is crucial for the two companies as they seek to revive profitability and bolster capital that’s been eroded by the yearlong crisis in the nation’s shadow banking sector. The combination was aimed at creating a diverse retail-asset book, the companies said in April.
“Until Indiabulls doesn’t come out of this murkiness, the merger will be at risk,” said Sanjiv Bhasin, executive vice president for markets and corporate affairs at Mumbai-based IIFL Securities Ltd. “We need more confidence from the management.”