The average cost of borrowing for corporates has gone up by 100 basis points since April 2018, making it harder for NBFCs to borrow, and hit their ability to stay afloat.įebruary 2019: Anil Ambani-owned Reliance Home Finance defaults on loan repayment of Rs 40.08 crore to Punjab & Sind Bank.Īpril 2019: Another Anil Ambani-owned firm, Reliance Commercial Finance, is also on the verge of default, according to CARE Ratings. On October 11, Nifty and Sensex hit a six-month low of 10,234 and 34,001, respectively.īond prices fall due to the sell-off and yields continue to rise, making it more expensive for NBFCs to borrow. October 2018: The effect of NBFC rout spreads like a wildfire across the stock and debt markets. Twelve other NBFCs including L&T Finance Holdings, DHFL, and Indiabulls Housing Finance also witness a sharp fall in market cap. Between September 21 and 24, large NBFCs like Housing Development and Finance Corporation (HDFC) and Bajaj Finance’s market cap erodes by around Rs 18,600 crore and Rs 13,800 crore, respectively. The crisis hit the market caps of large NBFCs.

Mumbai-based DSP Mutual Funds dumps Rs 300 crore worth of commercial papers of another NBFC, Dewan Housing Finance Limited (DHFL), at a discounted rate in September, sparking speculation that the company is staring at a rating downgrade.

How did the bank stay afloat bust