The corona virus outbreak and the ensuing lockdown have hurt almost all industries in India, but for the country’s USD 370 billion shadow banking sector, the virus-led freeze is only the latest headwind in a multi-year storm that’s dragged this sector. Over the past two years, several non-banking financial companies (NBFCs) in India have been dealing with bad news upon bad news, including a cash crunch, the high cost of capital and burgeoning bad loans. Once praised for reaching every nook and cranny of India, today NBFCs are struggling for survival. Before we try to study the impact the pandemic has had on NBFCs, we need to understand the factors that have put this sector in such a predicament in the first place.
Credit Crunch Ripple It was September 2018 when the financial sector witnessed the onset of a crisis with a major player, Infrastructure Leasing & Financial Services (IL&FS) Group, an NBFC, defaulting on several repayments. At the time, this was a largely out-ofcharacter and unheard-of action and it shook the industry to its core, creating ripples of panic and apprehension. Established in 1987, IL&FS was set up as a financial institution that could also function as a technical consultant. Over the years, it grew in size and its influence in the industry, consisting of 300 group companies. However, slow economic growth forced the company to rely on debt funding which led to an accumulated debt of over ₹90,000 crore.
Bu hikaye Dalal Street Investment Journal dergisinin July 06 - 19, 2020 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye Dalal Street Investment Journal dergisinin July 06 - 19, 2020 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
How To Invest In An Ageing Bull Market
Bull rallies (periods when stock prices rise) and bear declines (periods when stock prices fall) are natural parts of stock market cycles, but they don't follow a fixed timeline.
Should You Entrust All Your Money To A Single AMC?
If you are a market participant, you have probably heard the quote 'don't put all your eggs in one basket', which suggests diversification. Investors often focus on diversifying across categories like large-cap, mid-cap and small-cap, but they may unintentionally overlook diversification across different AMCs. The question arises: is AMC-wise diversification really necessary? Rakesh Deshmukh takes a closer look at this scenario
Wild Swings Engulf Global Equities
U.S. stock markets experienced significant volatility. An early-week rally pushed the markets to new highs, but this momentum faded, primarily due to weaknesses in the tech sector. The major indices had a mixed finish with, S&P 500 and Nasdaq closed lower, while the Dow recorded a notable gain.
U.S. Elections and China's Economy Hamper Commodities
Commodity markets experienced selling pressure in the last fortnight, driven by uncertainties surrounding the upcoming U.S. presidential elections, concerns about the Chinese economy, and increased agricultural production in Brazil.
Wealth Building For Retirement Through Mutual Funds
Retirement is one of the most crucial and lifechanging phases. It marks a period where maintaining your lifestyle becomes paramount even though your regular income stops.
Mastering Investment with Information Ratio
Information Ratio helps in navigating the complexities of the investment landscape by assessing an active fund manager's performance. And though it has its limitations, it remains an essential part of the finance industry. The article explains what Information Ratio is and how investors can use it as another tool
Plan To Be Financially Independent
Each of us aspires to be financially independent as it ensures having enough resources to be self-sufficient and control our finances.
❝Technology is the new game-changer"
With a new breed of young investors entering the financial markets, it is the use of technology that is increasingly playing a major role in how investments are done and tracked. Anand Radhakrishnan, Managing Director, Sundaram Mutual Fund, shares his opinion about how this factor is turning into a significant tool and how it will shape the strategies of his company
What If Donald Trumps?
The potential election of Donald Trump as president in the U.S. carries significant implications for the Indian equity market. It could lead to changes in the global trade dynamics, in particular affecting the Indian IT sector while also raising inflation levels and leading to yet another revision in the visa programme for Indians who want to work in the US. The article takes a closer look at what may lie in store
Sectoral Gains Make A Mark
Benchmark indices continued their uptrend, reaching new record highs, although the pace has slowed as the broader markets faced selling pressures
