Non-banking financial companies (NBFCs) that help high net worth individuals (HNIs) place leveraged bets for initial public offerings (IPOs) are seeing their plans go awry because of the risk-aversion caused by the coronavirus outbreak. Anticipating huge demand from wealthy investors, financial firms had borrowed heavily. However, they now fear their funds could remain underutilised.
NBFCs typically mobilise funds to fund IPO bets by issuing commercial papers (CPs). They lend to HNIs at a spread between 3 per cent and 5 per cent. The fund mobilisation is done by gauging the demand ...
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First Published: Wed, March 04 2020. 00:13 IST
