Real-estate developers receive aid from smaller NBFCs/HFCs

01 Sep 2019 CW Team

The developers displayed higher dependence towards NBFCs/HFCs after banks reduced their exposure in the real-estate sector. The structuring of payments along with low cost of funds increased the popularity of NBFCs. Reportedly, from FY 2017-18 to FY 2011-12 the outstanding credit offered by these companies to developers saw an increase of more than 3.5 times to a total of Rs 2,330 billion.

Before the default crisis, the share of the large NBFCs was 50-60 per cent of total lending to real-estate developers. This, however, came to a standstill when the crisis hit as the companies were keener on recovering dues. This was followed by a reorganisation of the asset portfolio, which consisted of lower lending in the sector.

The NBFC problem still persists but the smaller and medium entities have tried to make up the gap in the market. There has been an active inflow of Rs 0.3-0.7 billion being lent following the brief halt after the crisis. The lending ticket size has, however, considerably decreased from the previous Rs 1.5 billion-and-above mark.

The latest Union Budget seeks to create a provision of Rs 1 trillion, one-time partial credit guarantee to public-sector banks (PSBs). This will enable PSBs to purchase high-rated pooled assets of financially sound NBFCs with provision for the first loss up to 10 per cent. This move will help restore confidence and is likely to iron out the current challenges for the NBFCs and, in turn, help the real-estate sector.

According to Ramesh Nair, CEO & Country Head, JLL India,“NBFCs are likely to face challenges for the next few quarters. The impact of the Government’s measure will take some time to yield results. As a result, NBFCs will witness recovery towards the beginning of the year 2020.”

Smaller non-banking finance companies (NBFCs), which include housing finance companies (HFCs), have stepped up funding to the real-estate sector at a time when bigger players are reluctant. As reported, research conducted by JLL has shown that these companies have lent about Rs 40 billion in the six months after the NBFC crisis.The developers displayed higher dependence towards NBFCs/HFCs after banks reduced their exposure in the real-estate sector. The structuring of payments along with low cost of funds increased the popularity of NBFCs. Reportedly, from FY 2017-18 to FY 2011-12 the outstanding credit offered by these companies to developers saw an increase of more than 3.5 times to a total of Rs 2,330 billion.Before the default crisis, the share of the large NBFCs was 50-60 per cent of total lending to real-estate developers. This, however, came to a standstill when the crisis hit as the companies were keener on recovering dues. This was followed by a reorganisation of the asset portfolio, which consisted of lower lending in the sector. The NBFC problem still persists but the smaller and medium entities have tried to make up the gap in the market. There has been an active inflow of Rs 0.3-0.7 billion being lent following the brief halt after the crisis. The lending ticket size has, however, considerably decreased from the previous Rs 1.5 billion-and-above mark.The latest Union Budget seeks to create a provision of Rs 1 trillion, one-time partial credit guarantee to public-sector banks (PSBs). This will enable PSBs to purchase high-rated pooled assets of financially sound NBFCs with provision for the first loss up to 10 per cent. This move will help restore confidence and is likely to iron out the current challenges for the NBFCs and, in turn, help the real-estate sector.According to Ramesh Nair, CEO & Country Head, JLL India,“NBFCs are likely to face challenges for the next few quarters. The impact of the Government’s measure will take some time to yield results. As a result, NBFCs will witness recovery towards the beginning of the year 2020.”

Infrastructure Urban

09 Jan 2026

Mount Invests Rs 250 Cr, Adds PUF & PEB Plants, 400+ Jobs

TUMKUR, Karnataka, January 8, 2025 - Mount Roofing & Structures Private Limited, one of India's fastest-growing manufacturers in PUF and a leading solutions provider across Pre-Engineered Building (PEB) and Polycarbonate sheets, simultaneously inaugurated its second fully automated continuous Sandwich Panel manufacturing line and a new PEB manufacturing plant at its integrated campus in Tumkur." The milestone expansion, part of a total investment of INR 250 crores, marks a significant advancement in the company's commitment to engineered performance, manu..

Infrastructure Urban

09 Jan 2026

Titan Intech Strengthens UltraLED Push With Global LED Veteran

Titan Intech has announced the induction of global LED industry veteran Su Piow Ko to its Board of Directors, marking a strategic step in strengthening its UltraLED Displays roadmap and building globally competitive LED display solutions from India.The appointment aligns with Titan Intech’s ambition to position India as a hub for advanced, high-quality LED display manufacturing. With an increased focus on UltraLED Displays, the company aims to enhance technical governance, raise manufacturing standards and expand its presence across global markets.Su Piow Ko brings over three decades of inte..

Infrastructure Urban

09 Jan 2026

Dun & Bradstreet Flags New Growth Engines in India 2026 Outlook

Dun & Bradstreet has released its India 2026: D&B’s Perspective report, projecting a stable macroeconomic environment underpinned by fresh opportunities for productivity-led and inclusive growth. The report outlines how India’s next growth phase will be driven by digitised logistics, trusted data ecosystems, clean energy and rising city vitality.According to the outlook, India’s GDP growth is expected to reach around 6.6 per cent by FY2027, supported by resilient consumer demand and sustained public investment. Manufacturing is seen entering a new phase, moving beyond scale towar..