Currency Demonetisation effect: NBFC and micro-finance stocks crack
DSIJ Intelligence / 11 Nov 2016
Government’s clampdown on black money by demonetisation of 500 & 1000-rupee notes is likely to have effect on receivables of NBFCs and micro-finance lenders as they have large exposure to unorganised sector.
Government’s clampdown on black money by demonetisation of 500 & 1000-rupee notes is likely to have effect on receivables of NBFCs and micro-finance lenders as they have large exposure to unorganised sector.
NBFCs have large exposure to small cities and towns where the general economy is to a great extent dependent on cash for their transaction and repayment of lending. As the government decided to demonetise currency notes, it would have short-term ramifications on the companies operating in this sector.
Micro-finance players which thrive on small players i.e mostly the rural population is likely to be affected negatively in the near term.
Reacting negatively to this development all the finance stocks were trading down by big losses in today’s trading session.
Biggest losers: -
Manappuram Finance- 11 %
Tourism Finance Corporation of India- 7.5 %
Muthoot Finance- 7 %
Capital First- 6.5 %
IIFL Holdings- 6 %
Other stocks too were trading with heavy losses dragged down by financial stocks.
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