February 18, 2019 / 4:59 AM / 5 months ago

India's Dewan Housing shares jump on stake sale report

Feb 18 (Reuters) - Shares of Dewan Housing Finance Corp Ltd rose as much as 7 percent on Monday, after Economic Times reported here that Baring Pvt Equity, Bain Capital and Hero Fincorp are in talks to buy a stake in the debt-laden housing finance company.

The stock has been under pressure since investigative media outlet Cobrapost had alleged last month that loans from Indian state banks were diverted by Dewan Housing to shell companies, including those linked to its controlling shareholders. Dewan has, however, denied lending to shell companies.

Dewan’s promoters are looking to sell a 10 percent stake through various ways, including an open offer, the Economic Times reported.

The company’s Chief Executive Harshil Mehta had resigned last week.

Kapil Wadhawan, chairman and managing director, has taken additional charge as CEO and will remain in the position until a strategic partner comes in, according to the report.

Dewan Housing, Baring, Bain and Hero Fincorp did not immediately respond to Reuters’ request for comment.

Shares rose to 132 rupees, their highest since Feb. 1. They were up 3.9 percent at 128.05 rupees, as of 0445 GMT. (Reporting by Tanvi Mehta in Bengaluru, Editing by Sherry Jacob-Phillips)

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