Indian NBFCs Anticipate Asset Expansion of 15-17% Over Two Financial Years, Surpassing Decadal Average
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New Delhi, Dec 2 (NationPress) The growth of assets under management (AUM) for non-banking financial companies (NBFCs) in India is anticipated to stabilize between 15-17% during the ongoing and subsequent fiscal years (FY25 and FY26), as indicated by a report published on Monday.
This projected growth remains above the decadal average of 14% for the period from fiscal 2014 to 2024, according to insights from CRISIL Ratings.
The AUM growth in the two primary traditional sectors—home and vehicle loans, which account for 45% of total NBFC AUM—will continue to be driven by strong fundamentals, with minimal influence from external factors.
Home loans are expected to achieve a steady compound annual growth rate (CAGR) of 13-14%, bolstered by policy measures like the reintroduction of the Interest Subsidy Scheme.
Housing finance companies (HFCs) that concentrate on the affordable segment (around Rs 25 lakh loan ticket size) are predicted to experience a more rapid growth rate of 22-23% CAGR, as noted in the report.
Vehicle finance growth is projected to moderate but will remain robust, with an estimated CAGR of 15-16%.
Although unit sales growth for new vehicles is expected to decline, the transition towards higher-value vehicles and the ongoing emphasis on used assets are anticipated to provide compensatory support for overall AUM growth, as mentioned in the report.
Ajit Velonie, Senior Director at CRISIL Ratings, commented, “Most large NBFCs, particularly those backed by parent companies, have leveraged alternative funding mechanisms such as capital market instruments, foreign currency borrowings, and securitization in the past three quarters. For others, the ability to continue accessing these funding sources at a reasonable cost is essential for sustained growth.”
Funding plays a crucial role in the expansion of NBFCs. Bank lending to these companies, which has been generally supportive over the last 5-6 years, has remained within the range of Rs 13-13.5 lakh crore since November 2023, following an increase in regulatory risk weights.
