A Comparative Study Of NBFC in India
ALLIANCE BUSINESS SCHOOL|3
The study presents a
comparative study of NBFC’s in India. There are almost 13000 registeredNBFC’s in India. The study is aimed to provide an holistic view of the NBFC Industry. NBFC fulfills the
financial gap by providing loan at a lower rate of interest. The major players of each field1) Housing Finance Industry: LIC Housing Finance.2) Infrastructure Finance Industry: IDFC3) Asset Financing: Shriram Transport Finance4) Composite: Reliance CapitalThe study also compared the Indian Banks v/s NBFC. It was found that at even at the time of theeconomic slowdown NBFC was more profitable. Porters Five forces was also used to analyse theindustry and to find the competitiveness in the industry. The industry is not tightly regulated asthere are many regulatory bodies. Hence, there was an important need to study the NBFC as theindustry plays an important role in the financial Services market of INDIA.
It is encouraging that the NBFC sector‘s importance is finally being acknowledged across FS
market constituents as well as the regulator. However, the importance attached to the sector isoften transcending into misplaced exuberance. Over simplified and vague drivers for NBFCvaluations such as strategic fit and customer base, can never substitute dispassionate businessanalytics. A rational assessment of the intrinsic values of NBFCs factoring issues such as pastperformance, structural weaknesses of the sector (for instance funding disadvantages), alongwith an identification of real capabilities are essential to ensure that the equilibrium betweenprice paid and value realized is reached to the extent possible. In the absence of this, India issure to witness the re-opening of the NBFC horror story albeit with a new chapter on theerosion of NBFC investment values affecting investors across categories