NBFCs to face funding woes, may hit growth, says India Ratings

Non-banking finance companies (NBFCs), including housing finance firms, in India would face increased funding challenges in FY24, impacting their growth aspirations, according to India Ratings (Indi-Ra). 

The public sector banks, which have been active in providing funds to NBFCs, are reaching the internal exposure limit. Some of the key lenders to finance companies include SBI, Canara Bank, Punjab National Bank, and Bank of Baroda. 

Ind-Ra said the funding was likely to become more expensive and restricted as lenders realigned their pricing as well as funds allocation, factoring in their own increased cost of funds and constraints of balance sheets.  

Banks and capital markets together account for most of the funding sources for NBFCs (April-December 2022 9MFY23: 73 per cent). 

Govt raises Rs 39,000 cr via G-Secs

The government on Thursday raised Rs 39,000 crore through four securities at auction. The yields at cut-off price were Rs 8,000 crore in new three-year paper maturing in 2026 (6.99 per cent) and Rs  7,000 crore in new seven-year paper maturing in 2030 (7.17 per cent). The two other securities were Rs 12,000 crore in bond maturing in 2036 (7.35 per cent) and Rs 12,000 crore in security maturing in 2062 (7.38 per cent). 

Abhijit lele