Availability of liquidity with Non-Banking Financial Companies (NBFCs) have not dried up completely over the past two months, said CRISIL in an analysis.
However, fund-raising continues to be challenging for most NBFCs because investors remain affected due to the uncertainty.
“With debt repayments continue to be high in the near term – especially June 2020, how NBFCs manage the refinancing risk will be a key concern. In the situation, availability of moratorium on loans NBFCs had asked from the banks will offer them required liquidity support.
The liquidity covers have not gone down significantly because NBFCs managed to keep some collections in April and May, which varied depending on the segment of operations. Negligible disbursements also helped in keeping the liquidity covers under control to some extent, compared with earlier estimations,” stated the rating agency/
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Krishnan Sitaraman, Senior Director, CRISIL Ratings, “Despite cash outflow owing to debt repayments, a combination of partial collections, incremental funding, and negligible disbursements has supported the liquidity levels of NBFCs. But June is crucial with nearly Rs 1.25 lakh crore of repayments, which is half of the ~Rs 2.5 lakh crore due through August. However, if banks were to offer moratorium on them, the proportion of NBFCs with low liquidity cover reduces significantly to just 5% from 25% envisaged in our stress-case scenario.”
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