You are right about the downgrade. CRISIL has actually downgraded Rs.850 crore worth of commercial paper (CP) issued by Dewan Housing. In fact, CRISIL has raised some serious concerns about the liquidity situation at the company since it has been struggling to raise funds due to the monetary tightness in the market. Dewan Housing could also face some early redemption of NCDs and that could also put pressure on the company as per CRISIL.

Regarding buying the stock, it is best to stay away for now. The stock has corrected from Rs.700 to Rs.111 over the last 7 months and that is not a very good sign. There is pressure on liquidity at Dewan Housing. For example, it is not able to raise funds and the cost of raising money has gone up. At the same time, its funds are all locked up in long term home loans and recoveries over a longer period of time. Till this problem is entirely resolved, it is best to stay away from the stock.