NBFC boost: DHFL, Repco Home Finance shares surge up to 9% as RBI eases asset securitisation norms

Shares of NBFC’s got a boost this morning and after central bank RBI eased asset securitisation norms, in a bid to ease persistent stress in the sector. Housing finance firm DHFL share price gained by more than 7.4% to hit Rs 214.80, while shares of Repco Home Finance gained as much as 9% to touch Rs 372.75. According to latest revised norms, NBFCs can now securitise loans of more than five-year maturity after holding those for 6 months on their books.

Concerns over liquidity and how to address it was one of the key issues between the RBI and the government after the recent IL&FS fiasco. Several housing finance firms with their policy of borrowing short term to create long term assets faced issues, with tightening liquidity.

According to brokerage firm Motilal Oswal, the move should be beneficial largely to housing finance companies (HFCs) only, because they have loans of over 5-year maturity. According to research firm, Dewan Housing and Indiabulls Housing will be big beneficiaries among HFCs, since they have higher share of off-balance sheet assets compared to peers and their reliance on sell-downs to raise funds has been greater in these times of tight liquidity. Indiabulls Housing Finance share price gained more than 3.3% to hit the day’s high at Rs 325. Bajaj Finance Ltd’s shares rise as much as 2.3% to 2,564.40 rupees, their highest since September 19th.

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