EPFO looking for early redemption of DHFL bonds worth 700 crore


NEW DELHI: The Employees' Provident Fund Organisation (EPFO) will seek early redemption of about ₹700 crore worth of bonds of troubled mortgage lender Dewan Housing Finance Corp. Ltd (DHFL) to safeguard workers' savings.

The retirement fund manager will exercise an early exit option to redeem investments in 10-year bonds of DHFL that mature in 2024, said Prabhakar Banasure, a member of the finance investment committee of EPFO.

"Of the total ₹1,300 crore bond investments (in DHFL), we are yet to recover ₹ 700 crore.

Though the company has promised to pay back the investments, it is tough to give a timeline right now," said Banasure.

Since mid-June, the investment committee of the retirement fund manager has met four times to discuss ways to recover the investments. It redeemed ₹201 crore in two tranches, following at least two rounds of deliberation with DHFL officials in late June, according to official documents reviewed by Mint and two people familiar with the development.

The EPFO action comes as it struggles to recover ₹574 crore of its bond investments in crisis-ridden shadow lender Infrastructure Leasing and Financial Services Ltd (IL&FS).

DHFL is among the companies worst hit by the liquidity crisis triggered by the payment defaults by IL&FS in 2018. The crisis shook investor confidence in non-banks and dried up access to financing for them from banks as well as bond markets.

"Initially, EPFO thought of going to the debt recovery tribunal against DHFL and it was discussed in one of the meetings of the investment committee. But before that it called the officials of the firm who promised to pay a part of the amount," said one of the two officials cited earlier, requesting anonymity.

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