NBFC LENDERS
Bajaj Finance bucks industry trend, cuts deposit rates by 20 basis points in its top slab
The finance company will offer 8.40% a year from July 16 against 8.60% now for 42 months' maturity, people familiar with the matter said. Senior citizens will get 8.65% against 8.85% currently. There will be no change in other maturity slabs.
Fintech lenders have high delinquency levels in small value loans says RBI
The RBI has highlighted concerns over consumer loans, noting that over half of borrowers have three or more loans simultaneously. The Financial Stability Report flags high delinquency rates, especially among personal loans under ₹50,000 and loans from fintech lenders. Despite overall improvements in credit quality, stress in retail loans remains significant, particularly for private sector banks.
Kirloskar's NBFC turns focus to MSME loans to reduce risks
Arka Fincap, a Kirloskar Group-owned NBFC, is shifting its focus towards MSME loans to reduce wholesale credit risk. They aim for MSME loans to constitute 70% of their total portfolio, up from the current 50%, with a target to increase this to 75%. The NBFC, which has doubled its total loan book to ₹5,300 crore, plans to grow it further to ₹7,500 crore by FY25, with a significant portion from MSME lending.
Get InvITs under purview of bankruptcy law: SBI MD
SBI official, Ashwini Kumar Tewari, urges inclusion of Infrastructure Investment Trusts (InvITs) in the Insolvency and Bankruptcy Code for lender protection. Tewari is in discussions with the Reserve Bank and government for this initiative.
Indel Money doubles profit & eyes continued growth in gold loan market
Indel Money, a gold loan NBFC, has reported a significant rise in profit and revenue for FY24. Profit doubled to Rs 55.75 crore from Rs 29.19 crore in FY23, while total revenue surged by 55% to Rs 289 crore from Rs 185.23 crore. The company attributes this growth to increased disbursements, reaching around Rs 6,000 crore, and consolidated assets under management of Rs 1,800 crore.
Digital loans up 49% in FY24 by value, Rs 1.46 lakh cr disbursed: Industry body
The digital lending sector, represented by FACE, saw a significant increase in disbursements and loan numbers in FY23-24, with member entities disbursing Rs 1.46 lakh crore, marking a 49% surge. Over 10 crore loans were issued, up 35% from the previous year. Despite regulatory concerns, the sector emphasizes customer-centricity, compliance, and sustainable practices.
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HDB Financial awaits parent’s approval to begin IPO journey
HDB Financial Services, the non-banking financing arm of HDFC Bank, is preparing for an IPO to list by September 2025 with a valuation range of $9 billion to $12 billion. The lender plans to open 200 branches this fiscal year to expand its loan book.
Insurtech startup Finsall raises Rs 15 crore from Unicorn India Ventures, Seafund
Finsall, a Bengaluru-based insurtech startup, raised Rs 15 crore in bridge funding led by Unicorn India Ventures and Seafund. The funds will be used to establish a non-banking finance company for scaling lending operations and enhancing partnerships with insurers and lenders.
Microfinance market expands by a fourth in FY24 with asset quality showing significant improvement
The microfinance market expanded by a fourth in FY24 with asset quality showing significant improvement. The sector's gross loan portfolio grew 24.5% year-on-year to Rs 4.34 lakh crore at the end of March. The bad loan ratio fell to 7.9% from 8.6% a year back, according to industry data.
Targeting to hit milestone of Rs 20,000 cr loan book in 8-10 quarters: Shachindra Nath
If you look at this, the regulatory intent or the policy intent that the entire banking credit, 40% of average net banking credit should be in the priority sector. As we all know the banking sector, while in recent past the priority sector lending from bank side has improved, but for a variety of reasons the real priority sector credit dissemination has always been done by middle sized NBFCs.
3 stocks Viral Shah is bullish on from NBFC sector
I think a lot of analysts and investors have kind of built this in in their numbers and the impact is going to be actually gradual. Given that these are two-three years fixed rate loans, so the impact is always on an incremental basis. So, it will take two to three years for it to play out fully in terms of the financials. And the quantum of it also would vary. If it is a 50 or 100 base points kind of a rate cut, in the kind of the construct of the ROAs that MFIs make, it should be easily digestible.
Tech-based NBFCs try a balancing act after RBI action on unsecured loans
NBFCs like DMI Finance, Vivriti Capital and InCred Capital expanded unsecured retail and small business lending, leveraging strong fintech partnerships over to grow their business coming out of Covid. Some of these companies took the acquisition route to scale up this business quickly.
Risk weighting slows unsecured loan growth
The growth of unsecured credit in India, including personal loans and credit card outstanding, slowed to 18% in April from 23% in November 2023. The Reserve Bank of India's risk weighting on such exposures aims to reduce delinquencies in the banking system.
IIFL Samasta aims to raise Rs 1000 crore in bonds, to pay 9.2-10.5%
"We are raising public bonds to fulfill credit requirements of underserved and unserved customers across the 417 districts we operate in the country, as the large part of the country gets into monsoon season, credit requirements for agriculture, agri-allied and related micro MSME businesses will increase," managing director Venkatesh N M Told ET.
IREDA may float FPO this FY
Separately, in March, the lender's board had approved a proposal of Rs 24,200-crore borrowing for 2024-25. The amount will be raised through taxable bonds, green taxable bonds, perpetual debt instruments, green masala bonds, green foreign currency bonds and external commercial borrowings, among others.
Clarification likely on GST on NBFC co-lending
The government, led by Vivek Joshi, addresses concerns around GST levy on co-lending arrangements with NBFCs, raising issues of distortion and increased lending costs. Banks, tax authorities, FIDC, MFIN, CRISIL, partner banks discuss the growth of co-lending model, NBFCs' loan book reaching ₹1 lakh crore.
L&T Finance aims at 25% CAGR, retail lending in focus
L&T Finance Ltd aims for a 25% compound annual growth rate (CAGR) in the coming years, focusing on strengthening its retail lending business. The financial services arm of Larsen & Toubro plans to exit the wholesale segment entirely by 2026, becoming a 100% retail non-banking financial company (NBFC). The company introduced a new offering, 'Complete Home Loan', signaling a fresh push in its mortgage business, expected to surpass microfinance in book size.
Piramal Group arm invests Rs 600 crore in microlender Annapurna Finance
Piramal Alternatives acquired a stake in Annapurna Finance, becoming a top shareholder. Nuveen holds 11%. Kikani cited microfinance's 32% CAGR. Annapurna's AUM is ?10,400 crore. Pattanaik emphasized growth capital's significance.
Warburg Pincus brings home Shriram Housing Finance co with Rs 4,630 cr buyout
Largest Housing Finance M&A, the large buyout for the PE fund in India. Current management to stay at the helm. New brand name to be announced shortly.
Piramal Alternatives buys 9.85% stake in Annapurna Finance for Rs 300 cr
Piramal Alternatives, the investment arm of the Piramal Group, has picked a 9.85% stake in Odisha-headquartered micro lender Annapurna Finance through secondary equity deals.
Gayatri Projects promoters file plea against liquidation
However, a successful outcome is far from easy as any settlement with promoters under Section 12A of Insolvency and Bankruptcy Code (IBC) needs approval from 90% of lenders.
Muthoot Finance raises $650 million via offshore dollar bonds
The non-banking financial company raised the funds through bonds maturing in three years and nine months at a coupon rate – or rate of interest – of 7.125%. The funds will be used for onward lending and other activities that are allowed under the Reserve Bank of India’s external commercial borrowing guidelines.
Govt evaluating RBI proposal for higher infrastructure provisioning; bankers, NBFCs voice concern
Lenders may oppose the draft rules, which proposes provisioning of up to 5% from current 0.4%, due to concerns over rising interest rates and potential disruption to capital expenditure. Banks plan to lobby against the steep increase, arguing it could affect project viability and economic momentum. State-owned NBFCs and infrastructure firms are also raising concerns, emphasizing the need to balance risk and support for infrastructure financing.
Namdev Finvest's assets under management cross Rs 1,200 cr-mark in FY24
Namdev Finvest, a non-banking financial company specializing in small business lending, reported significant growth in its assets under management (AUM), which nearly doubled to over Rs 1,200 crore during the fiscal year 2023-24. The Jaipur-based company witnessed a remarkable 92.62 percent increase in AUM, reaching Rs 410 crore in net worth. Operating across eight states in northwest India, Namdev Finvest expanded its presence and received funding totaling USD 41.5 million, including a recent USD 19 million investment from Maj Invest in its Pre-Series C round.
Muthoot Microfin looking to raise $50 million in ECB
Muthoot Microfin, headquartered in Ernakulam and part of the Muthoot Pappachan group, aims to secure $50 million through external commercial borrowing (ECB) to diversify its funding sources and extend liability duration. The CEO anticipates a syndicated deal at a lower cost than the current average cost of funds.
What RBI proposal for tighter project finance rules will mean for REC, PFC?
Anil Gupta of ICRA discusses the implications of RBI's proposal for tighter project finance rules, focusing on provision requirements for projects seeking DCCO extension. The impact on lender balance sheets, credit flow, and specific sectors like REC and PFC is examined.
RBI scanner on gold loan startups; setback for P2P lending firms
Happy Wednesday! After the central bank's action on IIFL Finance, concerns have been raised over gold loan evaluation by fintechs and their partner banks. This and more in today’s ETtech Morning Dispatch.
NBCC to set up shadow lender to help save over $100 mn
India's state-run NBCC plans to establish its own NBFC to reduce borrowing costs for infrastructure projects, potentially saving $108 million over two years. The company's board discussed the proposal in March, aiming for approval from the new administration post-elections. NBCC eyes RBI license; past attempts to set up NBFC failed.
Non-bank lender Sugmya Finance raises $3 million in funding from existing investors
The company plans to utilise the funds to fuel its growth initiatives while ensuring a healthy Capital Adequacy Ratio (CAR). Since its establishment, the company has raised over $10 million from micro venture capital firms and various other investors.
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