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Is the threat for NBFCs receding? Here’s what experts have to say

Updated : July 03, 2020 02:26 PM IST

Marquee Investor Rakesh Jhunjhunwala believes that there are no more shocks left from the NBFC space. Separately, the bond market is also giving some positive indications -- the HDFC 2-year paper is trading at a yield of 5.4 percent, in March end it was 7.15 percent. Likewise, PFC bonds have fallen from 6.8 percent in March to 5.4 percent. Nabard 2-year bonds have fallen from 6.1 percent to 4.7 percent and the Nifty finance index has risen from a low of 8,500 in end-March to nearly 11,000, a rise of 30 percent.

The Reserve Bank of India (RBI) has helped with TLTRO schemes and rate cuts and the government has also announced a credit guarantee for the first loss of NBFC loans. More recently the RBI and the government have also announced an SPV which will buy short term paper from NBFCs and HFCs. So is the worst over for the NBFC space?

To discuss that further, CNBC-TV18’s Latha Venkatesh spoke to Saswata Guha, Dir-Financial Institutions at Fitch Ratings India; Suresh Ganapathy of Macquarie Cap Securities; Krishnan Sitaraman, Senior Dir at CRISIL Ratings; and Srikanth Vadlamani of Moody’s Investors Service.
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