InvestorQ : How do you think the NBFCs will be impacted by the current lockdown across India?
Katherine Gonsalves made post

How do you think the NBFCs will be impacted by the current lockdown across India?

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Rutuja Nigam answered.
1 year ago
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Even as the lockdown looks set to be extended, the NBFCs are on the edge of their seats with worry as commercial paper worth Rs.160,000 crore and NCDs worth Rs.87,000 crore coming up for redemption by June. NBFCs are facing a problem of cash shortage and also of weak business flows, resulting in a double whammy. Within the NBFC space, it is the small and medium-sized NBFCs that are most at risk due to the disruption caused by the Covid-19. Large lenders may be able to tap RBI’s Rs.1 trillion targeted longer term refinancing operations (TLTRO) window but smaller ones will face a crunch. Typically, NBFCs will want to conserve liquidity so top-rated NBFCs may raise fresh money to pay back old debts. The mid-sized NBFCs will have to dip into reserves to pay back these liabilities. Most of the NBFCs also find the Rs.1 trillion limit on TLTRO to be inadequate to cover the fund needs.

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