Finance Markets

NBFC shares plummet as RBI announces plans of strengthening its guidelines

On Friday, October 5th, the Reserve Bank of India announced in its policy meet that it would be strengthening its guidelines for selective non-banking financial companies (NBFCs)  as a precaution to avoid risks, following which shares of such entities plummeted earlier in the day.

As per a note written by CLSA analysts, many NBFCs are having a higher independence on short-term sources like mutual funds and commercial papers, and they are gradually becoming systemically important thus prompting the RBI to take such measures.

Shares of Dewan Housing Finance Corporation (DHFL) plunged 25 percent, touching its latest 52-week low of Rs 205 on BSE, shares of Dewan Housing Finance Corporation (DHFL) plunged by 25 percent, extending its losing streak to a fourth consecutive session.

Eventually, The scrip closed at Rs 223.50, down by 18.52 percent on Monday, 08 October 2018.

On Monday, October 8th, the NSE Nifty index finished 32 points up at 10,348 while the equity benchmark BSE Sensex closed 97 points up at 34,474.

Operating in the finance sector, DHFL is a midcap company founded in 1984,  with a market cap of Rs 7,474.68 crore.

As per reports, an investor has raised concerns due to increased borrowing cost post the IL&FS mishap, and it has gone on to put tremendous pressure on Shares of most non-banking financial companies (NBFCs).