NBFC liquidity

How did the NBFC sector get impacted?

Post the defaults by a large entity, liquidity tightened for the NBFC sector

  • A large number of HFCs / NBFCs were not getting enough liquidity
  • MFs reduced their exposure to NBFCs / HFCs by nearly ~`67,000 Crores between September 2018 and April 2019

NBFCs / HFCs witnessed a slowdown in loan disbursements

  • The combined loan book growth of NBFCs and HFCs slowed down significantly in Q3 and Q4 FY2019 to 18% y-o-y and 13% y-o-y respectively, from ~23% in H1 20191
  • HFCs’ monthly average disbursement fell to `13,500 Crores post September 2018, as compared to `25,000 Crores per month in the past four quarters2

Few NBFCs / HFCs also resorted to portfolio sell downs

  • Few players, who were not getting enough liquidity, had to resort to portfolio sell-downs, which resulted in subdued performance of the overall sector

Notes: 1. Credit Suisse

2. India Ratings

How did PEL perform?

Raised long-term funds amounting to nearly `16,500 Crores in H2 FY2019, which is equivalent to 30% of loan book size

Reduced commercial paper (CP) exposure to `8,900 Crores as on March 31, 2019 from `18,000 Crores in September 2019

Significant increase in the share of bank loans in the overall borrowing mix

Share of bank borrowings in overall borrowings1

Share of mutual funds in overall borrowings1

Consistent quarterly performance, with improving revenues and steady profitability throughout the year,
despite system-wide liquidity tightening

Financial Services Revenues (FY2019)
(` Crores)

Note: 1. Data for PCHFL

2. Considering Cash Tax and other synergies from merger

Financial Services ROE2 (FY2019)