the impact of good monsoons, higher MSPs, rural employment programmes and professionals working in rural India. However, incrementally, MMFS is witnessing slowing vehicle sales in rural as well. According to the management, October was a good month due to festive season; however, November sales have again slowed. the rural geography, slowdown is visible in CVs and cars, while UVs is stable. However, used and tractors continue to grow at a good. MMFS also seemed slightly worried on asset quality, given the approaching national elections, in which case, they might choose to provide and carry the NPLs on their books for a longer time rather than repossessing vehicles and writing off the loss , getting resolved, but recovery still away.
Infrastructure has become an interesting space to watch. The power sector, which forms over 50% of infrastructure finance, has incrementally seen more resolutions coming through in the past two months. The key ones among them are:
Financial Restructuring Package (FRP) signed by the largest exposure states of UP, Rajasthan and Haryana (Tamil Nadu done earlier) and four new states included
New Case-I bidding documents finalised, paving way for pass through of high fuel cost
FSA (Fuel Supply Agreement) being signed with private power projects
GoI mulling allowing extension of COD for troubled private sector projects, thereby, giving breathing space and allowing banks to avoid restructuring for upto three years.
Given these developments, IDFCís management believes that power sector issues should soon be resolved and the worst is probably behind them.