A clutch of 10 non-banking financial companies (NBFCs) have together lost market cap of more than R55,000 crore post the announcement of demonetisation of R1,000 and R500 currency notes. Housing Development Finance Corporation (HDFC) has the highest market cap loss of R25,999 crore, about 45% of the total market cap loss. Market cap loss of other NBFCs like Bajaj Finance, Indiabulls Housing Finance, Shriram Transport Finance and Mahindra & Mahindra Financial Services ranges between R4,000 crore and R8,000 crore.
Between Nov 8 and Nov 23, shares of most NFBCs fell more than 10%, during the same period the stock of HDFC was down almost 12%. Leading the list is Mahindra & Mahindra Financial Services, whose stock is down around 21% followed by Shriram Transport Finance whose shares are down more than 20%. Shares of other companies like L&T Finance Holdings, Reliance Capital, Sundaram Finance and LIC Housing Finance are down between 4% and 18%.
Analysts at Kotak recently said that the currency demonetisation is expected to have a longer impact on the business of NBFCs and that companies with greater dependency on cash transactions will take time to adjust to the new