Of this, rollover/redemption is expected to be around Rs 1-1.2 lakh crore in March alone.
The National Housing Bank (NHB) has sanctioned as much as Rs 4,300 crore and disbursed Rs 1,161 crore to housing finance companies (HFCs) in just nine days through February 22 in a bid to ease liquidity that has remained tight, showed the latest NHB data. The housing regulator has sanctioned `29,642 crore until February 22 for disbursement in its current financial year through June 2019, while offtake has been to the tune of `16,636 crore.
Sources told FE that the disbursement is expected to pick up sharply in March due to rollover/redemption pressure on HFCs. A senior finance ministry official said commercial papers and non-convertible debentures worth `2.7 lakh crore of NBFCs, including HFCs, are estimated to be due for redemption in the last quarter of this fiscal.
Of this, rollover/redemption is expected to be around `1-1.2 lakh crore in March alone.
The disbursement by the NHB is especially crucial for small players that are struggling to raise funds from the market after the IL&FS crisis.
Already, the Reserve Bank of India (RBI) has allowed the NHB to raise its refinance limit to Rs 50,000 crore from Rs 30,000 crore for its current financial year. The move was aimed at substantially improving the NHB’s financial might to step in should the liquidity situation worsen.
Liquidity also remains tight across the banking system, a major source of financing for NBFCs. According to a CARE Ratings report, the banking system liquidity deficit tightened further in the week through February 22. The average liquidity deficit for the week at Rs 1,28,851 crore was at a 8-week high and was Rs 42,136 crore more than the average liquidity deficit of the previous week. The average daily liquidity deficit during the week was over Rs 1 lakh crore, despite the RBI infusing liquidity to the tune of Rs 12,500 crore during the week.
Another CARE Ratings report suggested that the share of funds deployed in commercial papers and corporate bonds of NBFCs has remained under pressure and dropped to 8.2% and 8.3%, respectively, in January from 8.5% and 8.7% in December.
The share of NBFCs and HFCs in the total issuance of commercial papers has dropped from as much as 38.7% and 20.3%, respectively, in July 2018 to just 19.7% and 11.6% in October last year when the IL&FS crisis deepened. This was due to the fact that lenders/investors turned cautious about exposure to NBFCs. However, while the share of NBFCs in the issuance of commercial papers has risen to 24.6% in January, that of HFCs dwindled to just 8.2%.
In October last year, just after the IL&FS crisis flared up and concerns about the repayment ability of some HFCs, including DHFL and Indiabulls, started to depress market sentiments, the NHB had raised its refinancing target for 2018-19 by 25% to Rs 30,000 crore from the initial aim of Rs 24,000 crore. Later, the target was again raised to Rs 50,000 crore after the RBI approval.