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The shares of non-banking financial companies (NBFCs) drop by 9-13 per cent after Reserve Bank of India (RBI) on Friday increased lenders' single borrower exposure limit for non-infrastructure NBFCs to 15 per cent of capital funds.
Dewan Housing Finance Corp Ltd falls as much as 12.5 per cent and Edelweiss Financial Services Ltd declines up to 9 per cent. IIFL Holdings Ltd drops as much as 11.6 per cent to its lowest since March 30, 2017.
“RBI directive is a signalling factor that they're comfortable with banks taking exposure to NBFCs and housing finance companies even at the shorter end,” says Alpesh Mehta, deputy head of research at Motilal Oswal Securities Ltd. “Though the RBI directive will facilitate additional liquidity for NBFCs, it might have a different implication for each of them, depending on what their lenders decide,” says Siddharth Purohit, a senior research analyst at SMC Global Securities.
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