Investors have been betting heavily on non-banking finance companies (NBFC) and have gained significant profit until last Friday where NBFC stock unexpectedly plummetted. The NBFC stocks dreaded when DSP Mutual Fund put short-term DHFL’s paper at a yield of 11 per cent.
The NBFC market was in negative soon after DHFL dreaded its 50% market cap affecting other stocks heavily. Notable stocks which underwent selling pressures on Friday trade include Bajaj Finance, Dewan Housing Finance, Indiabulls Housing Finance, Repco Home Finance and Can Fin Homes, reported Moneycontrol.
As reported by Morningstar India, these five stocks catered a market exposure of nearly ₹15,000 crore. With an investment of ₹11,000 crore, Bajaj Finance has the majority of exposure, followed by Dewan Housing Finance with an exposure of ₹1300 crore and Indiabulls Housing Finance having an exposure of ₹1,754 crores.
NBFC’s crash accounted for a loss of ₹45,000 to the investors.
Hitesh Agarwal fro Religare Securities told Business today, “The cost of borrowing for NBFCs is going to shoot up and they may face challenges in raising money in the light of recent news on IL&FS. However, this knee-jerk reaction is baffling.”