Shares of Dewan Housing Finance (DHFL) fell 8 percent as investors turned wary after a media report claimed the company was involved in a Rs 31,000-crore scam.

Terming it India’s biggest financial scam, the report by Cobrapost alleged that DHFL siphoned off Rs 31,000 crore into promoter companies to create private wealth through a network of shell companies.

Around Rs 21,477 crore of DHFL’s funds were transferred into various shell companies as loans and investments without any terms, Coprapost claimed.



Here is a single infograph that explains what Cobrapost has unearthed about #LooteraDewan. pic.twitter.com/0SQqEBSePe

— Cobrapost (@cobrapost) January 29, 2019

“The trail disappears into dozens of shell companies and that is where the fun begins. The shell companies and destination of the siphoned-off money are linked to or owned by the Wadhawans—promoters of DHFL,” the company said on Twitter.

Analysts believe that this development will bring in more caution on the stock and valuations. "Cobrapost has blamed the company for providing and moving funds via shell companies. This will further dampen the company valuations and might initiate investigations into the firm. Company already is facing funding issues. NBFC sector will be facing even more tighter liquidity if there is an investigation or a default by DHFL. We have a 'sell' rating on the company and would see a gap down opening tomorrow," Sameer Kalra - Equity Research Analyst & Founder Target Investing, on DHFL said in a statement.

At the close of market hours, Dewan Housing Finance Corporation was quoting at Rs 170.05, down Rs 14.80, or 8.01 percent, on the BSE. It has touched a 52-week low of Rs 164.50.