The pain for housing finance non banking finance companies will last for a few more quarters, according to SBI Cap Securities.
“The prices definitely reflect the pain, but it isn't over yet,” said Avinash Singh, research analyst at the fund house. “Unless the banks come forward to provide liquidity and fund to developers...plus there are elections on the horizon and there are other macro economic uncertainties,” he said.
India's non-banking lenders came under pressure in the latter half of last year after the IL&FS Group defaulted on its debt payments, leading to a negative sentiment and liquidity crunch in the financial markets. Soon after, investigative news organisation Cobrapost alleged that Dewan Housing Finance Ltd. had siphoned funds by extending loans to shell companies owned by its promoters, adding to the nervousness.
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