Manushley, according to Ikura’s Vice President and Head (Financial Sector Rating) SaggarThe weakness in infrastructure credit in the first half of 2020-21 was primarily due to a continuous decline in banking credit credit to the infrastructure segment (10 percent).
However, non-bank financial companies-infrastructure financial companies (NBFC-IFC) continued to grow at a moderately continuous pace of 12% during this period, Saggar said.
She said the growth was driven primarily by spending related to the liquidity package announced by the government to discom, which is struggling to raise funds.
According to the report, the share of NBFC-IFC in infrastructure credit has increased from about 38% five years ago to 53% as of September 30, 2020.
The decline in banks’ share over the past few years has been largely due to the conversion of exposure to state-owned distributors into bonds and restrained lending amid asset quality issues and capital constraints. Said.
At the same time, he said the NBFC-IFC portfolio continued to grow, primarily against the backdrop of NBFC-IFC growth in the public sector.
Regarding asset quality, NBFC-IFC deteriorated from FY2016 to FY2018 against the backdrop of severe stress in the thermal power generation sector. However, he said trends over the last three years suggest that pressure on asset quality has receded, especially until the start of the turmoil caused by COVID-19.
According to the report, the percentage of stage 3 gross fell from 7.3% as of March 31, 2018 to 5.7% as of March 31, 2020.
“The total proportion of Stage 3 of NBFC-IFC has been further relaxed to 5%, the lowest in four years as of September 30, 2020. This is due to the movement of the forward bucket during the prolonged moratorium period. Partly because of the restrictions. ”
The impact of the COVID-19 turmoil on asset quality trajectory will become clearer in the coming quarters, but most infrastructure subsectors are in a blockade supported by factors such as: , Relatively resilient in terms of debt repayment. Renewable energy projects, sound recovery of toll collection, liquidity support for DISCOM.
Infrastructure credit increased only to Rs 22.6 in the first half of 2009, the new report said.
https://economictimes.indiatimes.com/news/economy/infrastructure/infrastructure-credit-grew-marginally-to-rs-22-6-lakh-crore-in-h1fy21-says-new-report/articleshow/80101351.cms Infrastructure credit increased only to Rs 22.6 in the first half of 2009, the new report said.