NBFCs soar on bank licence hopes
Religare Enterprises posted the biggest single-day gain since July 2012. On the BSE, the scrip surged 8.7% on Monday with a combined volume of 2.37 lakh shares on the BSE and the NSE. This was up 4,859% compared with the combined average daily volume of 4,877 shares during the last 10 days and up 805% compared with the combined average daily volume of 29,408 shares during the last three months, Bloomberg data show.
Other major gainers in the NBFC space included L&T Finance Holdings (up 5%), Srei Infrastructure Finance (up 4%), Bajaj Finserv (up 3.7%), and LIC Housing Finance (up 2.7%) with a significant spurt in trading volumes.
On Friday, the Reserve Bank of India (RBI) released final guidelines for issuing new bank licenses that would boost credit growth, especially in rural areas, and revive economic growth.
Analysts said investors placed positive bets on companies that are most likely to get banking licences . “Within our coverage arena, almost all NBFCs may ‘qualify’ for new bank licence,” stated a Bank of America Merrill Lynch report, adding that housing finance companies like HDFC and LIC are also likely to qualify. The report also stated that competition would intensify as only 4-5 entities are would get a
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