The company has been facing liquidity crisis and has recently defaulted on its repayment obligations.

DHFL has been battling a liquidity crisis over the past three quarters.

Out of the aggregate amount of Rs 375 cr, DHFL failed to make payments worth Rs 225 cr.

DHFL raised Rs 350-400 crore collectively by selling loan portfolios.

Rating agencies Crisil, CARE and ICRA have downgraded commercial papers issued by DHFL.

The rating of these instruments has been downgraded from BBB (SO) to AA -(SO).

DHFL had called the rating decision as ‘irrational’.

"DHFL's progress towards fundraising transactions was not taken into cognisance," it said.

DHFL CPs have an outstanding of Rs 1,525 crore, mostly held by mutual funds.

Commercial papers are short-term debt papers with one-year maturities.

According to the housing finance firm, since September 21, 2018 it has repaid commercial paper holders Rs 9,465 crore.

With this, the CP outstanding as on November 30, the NBFC said, will be 1 per cent of the total borrowing amounting to Rs 1,125 crore.

A liquidity squeeze has crimped commercial paper sales in the past one month.

Such instruments carry lowest credit risk, as per the definition by Crisil.

Shares of NBFCs have tanked against the backdrop of IL&FS defaulting on debt obligations.

In the past three days, Indiabulls has raised Rupees 1,400 cr via commercial paper sales.

Since this was much higher than DHFL’s previous borrowing rate of 8.2% and there was no pressing need for funds, DHFL treasury rejected the...