NBFCs stare at valuation hurdle, IPOs in pipeline may see tepid interest

Within the NBFC space, housing finance companies (HFCs) are likely to find few takers

Initial public offerings (IPOs) of non-banking finance companies (NBFCs) will find market headwinds a hindrance to their valuations even as a big question mark hangs over investments in excess of $2 billion made by private equity (PE) and venture capital (VC) funds in them over the past three years.

Investment bankers say the change in the growth perception and business models of NBFCs after the blowout at Infrastructure Leasing & Financial Services will force them to re-align valuations. This is expected to have a bearing on the IPOs of Srei Equipment Finance, Muthoot Microfin, and Spandana Sphoorty — all of