In June, India’s shadow banking sector was on the verge of collapse. But three months later, things are looking up for the $370 billion industry.
Despite the challenging macro-economic environment, the shares of leading non-banking finance companies in India have shown a stellar performance since July. Shares of Bajaj Finance, Chola Investment and Finance and Mahindra & Mahindra Financial Services, among others, have outperformed Bombay Stock Exchange’s benchmark 30-stock Sensex.
This is against the usual trend as NBFCs, which lend without a banking licence in India, are considered “cyclical firms” whose fortunes are tied to the macroeconomic conditions. Experts believe the recent good performance is because the sector has learned from its past mistakes and is making the right moves now.
“Our discussions with listed and smaller unlisted NBFCs and co-operative…
