What is the projected growth for the NBFC sector?

Crisil projects an 18-19% growth in assets under management for the NBFC sector for the current and next fiscal years.

What are the main risks for NBFCs according to Crisil and Piramal Finance?

Key risks include rising delinquencies in the loan against property (LAP) segment and potential customer over-leveraging in unsecured loans.

How will funding costs affect NBFC margins?

Funding costs for NBFCs are expected to decrease, potentially leading to margin expansion for the sector.

Home / Business and Economy / NBFCs Eye 19% Growth Amid Rising LAP Risks

NBFCs Eye 19% Growth Amid Rising LAP Risks

24 Nov

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Summary

NBFC sector growth projected at 18-19% for current and next fiscal years.
Loan Against Property (LAP) segment shows strong growth but rising concerns.
Funding costs for NBFCs are expected to decrease, potentially boosting margins.

NBFCs Eye 19% Growth Amid Rising LAP Risks

The non-banking financial company (NBFC) sector is anticipating substantial growth, with Crisil projecting an 18-19% increase in assets under management (AUM) for the current and next fiscal years. This optimistic forecast is underpinned by supportive government policies, a lower interest rate environment, and strong consumption trends, particularly in secured lending segments like loans against property (LAP).

Piramal Finance has notably outpaced industry growth, achieving a 45% disbursement surge during the recent festive season and projecting a 26% AUM increase. While this strong performance continues, experts like Jairam Sridharan of Piramal Finance and Krishnan Sitaraman of Crisil have raised concerns regarding asset quality. The LAP segment, despite its current strength, is identified as an emerging pocket of concern, with a potential rise in delinquencies.