NBFC stocks slip as loan growth moves into negative zone
“Moderation in vehicle loans in the face of a slowdown in the auto sector and increased caution appear to be the prime reasons,” said Ashish Gupta.
“Moderation in vehicle loans in the face of a slowdown in the auto sector and increased caution appear to be the prime reasons,” said Ashish Gupta, Research Analyst with Credit Suisse. “Wholesale loans at NBFCs though have started to deteriorate and as much as 10-11 per cent of these turning NPA at some NBFCs.”
Shares of Bajaj Finance and Ujjivan Financial Services were trading over 2 per cent and 3 per cent down at Rs 3,246 and Rs 272, respectively, in morning trade. Sundaram Finance, Aditya Birla Capital and Edelweiss Financial were also down up to 2.50 per cent.
Abhimanyu Sofat, VP-Research, IIFL in an interaction with ETNow said, “Lots of the NBFCs are losing ground because of lack of availability of capital. Going forward, there is clearly an opportunity for good companies in the market.”
In the wake of the liquidity crisis hitting the NBFCs and housing finance companies (HFCs), securities market regulator Sebi might ease share buy-back norms for these firms, PTI reported. The proposal is expected to be presented at the regulator’s board meet on Wednesday.
In a scrip specific development, shares of beleaguered Dewan Housing Finance Corporation (DHFL) plunged over 5 per cent intraday after the company informed bourses that it has defaulted on its financial repayment obligations worth Rs 1,571 crore with regard to the issuance of bonds and commercial papers.
Overall, the sector has been reeling under stress since the unfolding of the IL&FS liquidity crisis in September 2018 due to alleged fraud and mis-management issues.