A question of trust

For investors to return to NBFCs, trust needs to be rebuilt in the financial system and its guardrails

Akash Prakash 

Akash Prakash

There has been a degree of surprise among observers as to why the NBFC crisis continues to simmer and even worsen. Both NBFC (non-bank financial company) and HFC (housing finance company) stocks were darlings of the markets before the IL&FS default.

They were growing very strongly, had good profitability and were beneficiaries of the deepening money and credit markets. At one time, they accounted for almost 25 per cent of the incremental credit growth in the system. The stocks were rewarded with high multiples and were seen as following the same value creation path delivered by the private ...

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First Published: Tue, June 18 2019. 01:00 IST