Edelweiss Financial Services, Srei Infrastructure Finance, Can Fin Homes and Reliance Capital were down 5% to 14% on the BSE. In comparison, the S&P BSE Sensex was trading 0.33% lower at 36,420 points at 12:36 pm.
Besides these four stocks, GIC Housing Finance, Housing and Urban Development Corporation (HUDCO), PNB Housing Finance, Motilal Oswal Financial Services and Repco Home Finance have hit their respective 52-week lows on the BSE in intra-day trade on Thursday.
“Against the backdrop of rising rates globally, local rates have been rising. AAA-rated paper for one year is currently yielding around 8.6% vs. around 6.8% a year back. The trend is likely continued to upward. Moreover, in the last few years, there was a surge in bank and bond market lending to NBFCs,” according to analysts at Morgan Stanley.
After the IL&FS default, we expect markets to be more conservative in lending to NBFCs, which is likely to push up pricing. For NBFCs as a whole, we think the issue is funding cost (and hence NIM) rather than liquidity. Also, most of these NBFCs have been priced for continued strong growth – implying increasing funding requirements. This may slow down as funding costs increase, it added.
Analysts at Jefferies believe funding cost at NBFC/ HFCs should rise due to repricing of non convertible debentures (NCDs) post maturity and increase in incremental funding costs. NBFCs with a presence in niche segments (used CV, rural segment) should be better positioned to pass thru higher cost to consumers.
|DEWAN HSG. FIN.||302.50||610.60||-50.5|
|SREI INFRA. FIN.||35.10||46.90||-25.2|
|CAN FIN HOMES||232.90||307.80||-24.3|
|REPCO HOME FIN||424.25||510.05||-16.8|
|OSWAL GREEN TECH||17.55||20.00||-12.3|
|GIC HOUSING FIN||260.45||296.05||-12.0|
|PTC INDIA FIN||15.10||16.80||-10.1|
|H U D C O||49.60||55.15||-10.1|