LIC arm files insolvency suit against DB Realty

LIC Housing Finance (LICHF) has filed an application at the National Company Law Tribunal (NCLT) to initiate insolvency proceedings against DB Realty. The developer, in a notice to the stock exchange, said that the matter is pending in the NCLT and settlement talks are on between LICHF and DB Realty.

The application pertains to a Rs 200-crore loan availed by DB Realty from LICHF in 2010. Out of the sanctioned loan, Rs 188 crore was disbursed by LICHF. “Of the disbursed sum, Rs 157.4 crore was repaid by DB Realty to LICHF within 18 months from the date of disbursement. The balance loan outstanding is nearly Rs 31 crore,” said DB Realty.

DB Realty fell over 7% in intraday on Thursday as investors turned wary of the stock on the back of insolvency proceedings reports. On Friday, the share closed flat at Rs 34 marginally higher than its intraday low of Rs 33.

DB Realty was founded in 2006 as a joint venture between two developers – Vinod Goenka of the Dynamix Group and Shahid Balwa of the Balwa Group. In the first quarter of FY18, the company reported a net loss of Rs 1.5 crore as against loss of Rs 88 lakh in the corresponding quarter last year.

The company’s annual report for FY17 said that as on March 31, 2017, DB Realty had defaulted on a Rs 13.5-crore loan to Reliance Capital since January 2017. It has also failed to pay Rs 2.2 crore principal due to ICICI Bank and another Rs 32 lakh to Indiabulls Housing Finance since March 2017.