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Uploaded by

Sree Raj
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© Attribution Non-Commercial (BY-NC)
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A Comparative Study Of NBFC in India 2010

Table of Contents
EXECUTIVE
SUMMARY .................................................................................................................. 3
CHAPTER-1
INTRODUCTION ......................................................................................................... 4
1.1 Types Of
NBFCs ......................................................................................................................... 5
1.2 Regulations of
NBFCs ................................................................................................................. 6 1.3
Guidelines for new
deposits .......................................................................................................... 8 1.4
Responsibilities .....................................................................................................................
...... 11 1.5 Current
Scenario ......................................................................................................................... 12
CHAPTER-2 Literature
review ......................................................................................................... 14 2.1
Importance Of
NBFCs ............................................................................................................... 15 2.2
Role of
NBFCs .......................................................................................................................... 16
2.3 On Global
Crisis ......................................................................................................................... 17
CHAPTER-3RESEARCH
METHODOLOGY ............................................................................... 18 3.1
RESEARCH
DESIGN ................................................................................................................ 19 3.2
Objective ...............................................................................................................................
...... 19 3.3 SCOPE OF THE
STUDY ........................................................................................................... 19 3.4 data
collection .............................................................................................................................
19 3.4.1 PRIMARY
DATA ............................................................................................................... 19 3.4.2
SECONDARY DATA .........................................................................................................
19 3.5 Field Work
Plan .......................................................................................................................... 20
CHAPTER-4MAJOR PLAYERS AND SELECTED COMPANY FOR
STUDY ........................ 21 4.1 LIC HOUSING
FINANCe.......................................................................................................... 24 4.1.1
Housing Finance Industry ....................................................................................................
24 4.1.2 Indian Housing Finance
scenario ......................................................................................... 25 4.1.3 LIC Housing
Finance ........................................................................................................... 26 4.1.4
Financial Performance .........................................................................................................
28 4.1.5 Macro Economic

Analysis ................................................................................................... 33 4.2 Reliance


Capital: ......................................................................................................................... 38
4.2.1 Indian
Economy: .................................................................................................................. 38
4.2.2 Reliance
Capital ................................................................................................................... 39 4.2.3
Financial Performance .........................................................................................................
41 4.2.4 Macro Economic
Analysis ................................................................................................... 44 4.3 Shriram
transport finance ............................................................................................................ 47
ALLIANCE BUSINESS SCHOOL | 1

A Comparative Study Of NBFC in India 2010


4.3.1 ECONOMIC
OVERVIEW .................................................................................................. 47 4.3.2
COMMERCIAL VEHICLE INDUSTRY OVERVIEW .....................................................
47 4.3.3 Shriram Transport
Finance................................................................................................... 48 4.3.5 Financial
Performance ......................................................................................................... 49 4.3.4
SWOTANALYSIS...............................................................................................................
52
4.4idfc ...................................................................................................................................
............ 56 4.4.1 Global Financial and Economic
Crisis................................................................................. 56 4.4.2 Infrastructure
Development Finance .................................................................................... 57 4.4.3
Financial Performance .........................................................................................................
59 4.4.5 Macro Economic
Analysis ................................................................................................... 63 CHAPTER-5
INDIAN BANKS V/S NBFCS ................................................................................... 65
5.1 Top 5 Banks and NBFCs with highest
profitability ................................................................ 67 5.3 Banking versus NBFC
regulatory arbitrage in India............................................................... 68 CHAPTER-6
Porters five forces ...................................................................................................... 70
CHAPTER-7 FINDINGS & MANAGERIAL
IMPLICATIONS................................................... 74 7.1
findings .................................................................................................................................
...... 75 7.1.1 Disbursements - Sharp fall during the
crisis ........................................................................ 75 7.1.2 Cost of
Funding.................................................................................................................... 77 7.1.3
Asset Quality ........................................................................................................................
77 CHAPTER-8 RECOMMENDATIONS AND
CONCUSION ......................................................... 79 8.1
Recommendation: .................................................................................................................
.. 80 8.2
Conclusion ............................................................................................................................
.. 80
REFERENCES .....................................................................................................................
............... 82
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A Comparative Study Of NBFC in India 2010


EXECUTIVE SUMMARY
The study presents a comparative study of NBFCs in India. There are almost 13000
registered NBFCs 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 field 1) Housing Finance Industry: LIC Housing Finance. 2)
Infrastructure Finance Industry: IDFC 3) Asset Financing: Shriram Transport Finance 4)
Composite: Reliance Capital The study also compared the Indian Banks v/s NBFC. It was
found that at even at the time of the economic slowdown NBFC was more profitable.
Porters Five forces was also used to analyse the industry and to find the competitiveness
in the industry. The industry is not tightly regulated as there are many regulatory bodies.
Hence, there was an important need to study the NBFC as the industry plays an important
role in the financial Services market of INDIA.
It is encouraging that the NBFC sectors importance is finally being acknowledged across
FS market constituents as well as the regulator. However, the importance attached to the
sector is often transcending into misplaced exuberance. Over simplified and vague
drivers for NBFC valuations such as strategic fit and customer base, can never substitute
dispassionate business analytics. A rational assessment of the intrinsic values of NBFCs
factoring issues such as past performance, structural weaknesses of the sector (for
instance funding disadvantages), along with an identification of real capabilities are
essential to ensure that the equilibrium between price paid and value realized is reached
to the extent possible. In the absence of this, India is sure to witness the re-opening of the
NBFC horror story albeit with a new chapter on the erosion of NBFC investment values
affecting investors across categories
.
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