NBFC Investment

The share of such loans declined between September 2020 and March 2022 in private banks and NBFCs but rose for public sector banks

Since valuations are higher in this space, a 7-yr horizon with 10% capital outlay can be looked at

Experts believe spreads will contract as the credit lines start getting utilised, and banks regain confidence about NBFC papers for the long term

NBFCs may be forced to dig into their cash reserves if systemic liquidity support dries up

Although the government has allowed NBFCs, HFCs to start operations, they have not allowed resumption of operations in hotspots and have also not permitted field activities

The crippled non-banking financial companies are hoping for better days in the New Year as they expect liquidity condition to improve on the back of various measures announced by the government and the Reserve Bank. Asset quality pressures, liquidity squeeze, asset-liability mismatches, higher borrowing costs, rising defaults levels and rating downgrades made 2019 a tumultuous year for NBFCs or the shadow banks. Having badly lost a year and more since the industry major IL&FS went belly up in September 2018, NBFCs expect that the fiscal and monetary measures will help them come out of the deep tunnel, and to regain their lost importance in the financial system as they have been the key financial intermediaries delivering the last mile credit to the needy all these while. "The outlook is positive as the government and the RBI have already announced a lot of measures to help the NBFC sector," says Shriram Transport Finance Managing Director Umesh Revankar. To alleviate the stress in

From the perspective of fiscal consolidation, the announcements do not impose significant extra fiscal burden, says Rajeev Jain

If you are comfortable with the rating, invest up to 10 per cent in a single company's paper