Assets under management of NBFC to fall first time in two decades: CRISIL

Assets under management of NBFC to fall first time in two decades: CRISIL

Amir Shaikh
/ Categories: Trending

CRISIL on Wednesday released a report on the assets under management (AUM) of non-banking financial companies (NBFCs), in which, it expects the AUM of these NBFCs to dip 1-3 per cent in FY21E, for the first time in almost two decades as fresh disbursements have witnessed a significant fall.

The credit rating agency noted that excluding the top five NBFCs, the fall is expected to be even severe at 7-9 per cent. It added that the AUM of the shadow banking sector is estimated to have grown by 4-6 per cent in FY20.  The report said while, disbursements across segments are expected to fall 50-60 per cent, lower repayments during the loan moratorium period (March 1, 2020, to August 31), and capitalisation of interest accumulated, however, will help to act as a cushion for NBFCs amid a decline in their AUM.

Besides, it said that the real estate and structured credit focussed NBFCs are likely to witness a decline of 10-12 per cent in their AUM in FY21E. However, gold loan NBFCs and home loan NBFCs are likely to witness a growth of 14-16 per cent and 0-2 per cent in the ongoing fiscal, respectively. 

However, the rating agency added that the silver lining would be the gold loans, which constitute around 5 per cent of the AUM. It further pointed out that the growth here is seen to be relatively higher as more individuals and micro-enterprises go for it to meet immediate funding needs. Considering the surplus liquidity with banks along with a focus on the retail asset classes segment, the banks are likely to give competition in the conventional asset classes like home loans and vehicle finance.

Previous Article Praj Industries and ARAI collaborate to develop advanced biofuels
Next Article Rights issue: REFEX-RE doubles in three trading sessions
Rate this article:
5.0

DALAL STREET INVESTMENT JOURNAL - DEMOCRATIZING WEALTH CREATION

Principal Officer: Mr. Shashikant Singh,
Email: principalofficer@dsij.in
Tel: (+91)-20-66663800

Compliance Officer: Mr. Rajesh Padode
Email: complianceofficer@dsij.in
Tel: (+91)-20-66663800

Grievance Officer: Mr. Rajesh Padode
Email: service@dsij.in
Tel: (+91)-20-66663800

Corresponding SEBI regional/local office address- SEBI Bhavan BKC, Plot No.C4-A, 'G' Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400051, Maharashtra.
Tel: +91-22-26449000 / 40459000 | Fax : +91-22-26449019-22 / 40459019-22 | E-mail : sebi@sebi.gov.in | Toll Free Investor Helpline: 1800 22 7575 | SEBI SCORES | SMARTODR