Due to the merger of Housing Development Finance Corporation (HDFC) with HDFC Bank, non-banking financial comp.es (NBFCs) and housing financiers now have access to Rs. Analysts say Rs 1.5 lakh crore of bank limit is available. Banks cannot invest more than 20 per cent Tier I capital in any one NBFC as per the limit prescribed by the Reserve Bank of India. While its exposure in an NBFC group cannot exceed 25 per cent. As on March 31, 2023, HDFC Ltd had total borrowings of $69.14 billion.
Of this, 23 percent were term loans from banks. Which is about 15.9 billion dollars i.e. about 15.9 billion dollars. 1.5 lakh crores. Analysts said this exposure of HDFC Ltd has now been removed from the NBFC/HFC classification following its merger with HDFC Bank. This not only means that the cost of funds will come down, but NBFCs will now be able to raise a much larger amount from banks at the same rate. This will benefit the entire sector but according to overseas broking firm Nomura, it is a big positive for Bajaj Finance and its housing finance subsidiary Bajaj Housing Finance. Bajaj Finance has a Multiple Liability franchise.
Which has a strong track record with AAA rating. This has helped narrow the funding cost gap with large banks over the past several years, Nomura analysts said in their latest note. According to senior banking analysts, NBFCs with a strong track record will get easy access to funds. He says that in which NBFCs like Jio Financial Services or Cholamandalam Finance will be able to get money from banks because of their ownership. The bank needs someone to guarantee if anything goes wrong. Private equity is not considered a particularly reliable guarantor by banks. He further said, they want strong promoters. Banks currently account for 30 per cent of Bajaj Finance’s liabilities. Banks hold 49 per cent stake in Cholamandalam and 24 per cent in Shriram Finance.
