VN Research & Consulting
 Like us on facebook  Follow us on twitter  Follow us on LinkedIn  IndiaNotes on Google Plus  IndiaNotes on Pinterest  IndiaNotes on Stumbleupon  Subscribe to our feeds

Stocks  A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
You are here : IndiaNotes >> Research & Analysis >> Industries >> Finance >> Research

Shares of NBFC Crashes In The Course Of 10 Days

Dynamic Equities Pvt Ltd | 26 Dec, 2016  | Follow Author | Add to my Favourites 
  • Rate this article
    (Average Rating 0.0 Based on 0 ratings)

Shares of non-banking finance companies (NBFCs) crashed further after it was reported that the Maharashtra government will form a special investigation team (SIT) in order to investigate violations of norms by microfinance companies.

During the last 10 trading sessions, Bharat Financial Inclusion Ltd gained only on one day, Shriram Transport Finance Co. Ltd, Repco Home Finance Ltd, GIC Housing Finance Ltd gained in two sessions, while Shriram City Union Finance Ltd, Bajaj Finance Ltd, L&T Finance Holdings Ltd, Mahindra & Mahindra Financial Services Ltd, Equitas Holdings Ltd and Ujjivan Financial Services Ltd increased in three sessions.

The government formed the SIT after legislators and farm activists hinted that serious irregularities, like disbursement of loans to more number of people than allowed and steep interest rates.

On account of political risks that are playing out in certain areas, one cannot ignore the possibility of some write-offs. However, the current phase is transient in nature and the strong players will endure some collateral damage. A big positive that can emerge out of the current situation is that the indiscipline caused by fringe MFIs could be curbed.

Also, the sentiment of investors was hurted as they expect that the cash crunch will generate lower profitability of these companies on falling disbursements and likely rise in credit costs. On 8th November, Prime Minister Narendra Modi announced scrapping of Rs500 and Rs1,000 notes as legal tender in order to cure the country of black money.

The demonetization related cash crunch has had a direct impact on the cash intensive operations of microfinance companies in the form of a fall in fresh disbursements and loan collection.

Also, rumors of loan waivers and associated political instigation to default are raising risks of mass defaults in certain geographies. The situation is unlikely to improve soon and it anticipates bank transactions to become more painful for the coming 18-24 months.

  Read full report Click here to read the full report

About Dynamic Equities Pvt Ltd

Dynamic Equities Pvt. Ltd. is a a SEBI Registered Investment Advisor and Stock Broker, a leading financial services provider, and one of the major players in the Equity markets in India. With an experience of over 15+ years in Stock Markets and Equity Research, they provide daily updated Support & Resistance of 4200 instruments across 93 exchanges and 56 countries globally. They have an in-house team of over 25 analysts. Under the guidance and mentorship of Mr. Shailesh Saraf, MD of Dynamic Equities Pvt. Ltd., these analysts are dedicately involved in guiding their clients and users of the website for trading in the market. Mr. Shailesh Saraf has an experience of over 24 years in the financial market, especially in capital & derivatives market operations, trading, research and management related areas. Dynamic Levels is a website owned by Dynamic Equities Pvt. Ltd. The website can be reached at

For more information please write in to [email protected]

Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor accept any liability whatsoever arising from the use of any of the above contents.

Technical Calls

What are technical calls?

Other Articles

Have a question?

Punit Jain
Founder - JainMatrix Investments - JainMatrix Investments