CRISIL NBFC Report

The operating environment for non-banking financial companies (NBFCs) seems to be improving. With the
economy on the mend, loan disbursements have picked up in most segments, funding costs are coming down, and
several banks are facing capital constraints, giving these lenders a foot in the door.

However, competition is heating up across the board as new players enter. Will the pace of growth sustain? Will it
be a secular ride, or will the earnings growth trajectory be better for some segments?

This report delves deep into the fast-changing NBFC landscape. It contains CRISIL Researchs perspective on the
growth prospects, competitive scenario and attractiveness in 10 segments where NBFCs operate.

The coverage includes:

Outlook on growth and risk by segment

Segment-wise profitability outlook, considering business growth, resource profile & asset quality

Detailed assessment of competitive positioning and market share of NBFCs in each segment

Perspective on regulatory direction in each segment

Profiles of 125 NBFCs, detailing key operational and financial parameters

Product segments covered

1. Infrastructure finance 2. Housing finance
3. Low-cost housing finance 4. Loan against property
Auto finance (including used cars & CVs and new
5. 6. Construction equipment finance
tractor finance)
7. Wholesale finance 8. SME loan
9. Gold loan 10. Microfinance

Coverage
Overview For each of the segments covered
Relative attractiveness of NBFC segments based on Overall growth in the industry
growth and profitability outlook
Competitive positioning of NBFCs across key segments Market share of NBFCs vs banks

Structure and classification of NBFCs Growth outlook for NBFCs

Importance of NBFCs in India Profitability of NBFCs review & outlook

Regulatory environment for NBFCs Asset quality review & outlook

Key growth drivers and challenges

Player profiles
Detailed Table of Contents

Infrastructure Financing
Opinion
Outstanding portfolio growth and market dynamics

Review of growth in overall infrastructure financing market

Growth in infrastructure projects sanctioned by financial institutions

Segment wise share of investments

Market share of NBFCs vs. Banks including outlook

Infrastructure finance portfolio mix of banks and NBFCs

Infrastructure finance portfolio mix for NBFC (excluding PFC and REC)

Growth outlook for NBFCs

Player wise market share of NBFCs

Profitability

Borrowing profile for overall NBFCs and for NBFCs excluding PFC and REC

Profitability - for overall NBFCs and for NBFCs excluding PFC and REC

Capital adequacy

Asset quality

Past trend in Gross NPAs and restructured assets

Outlook on GNPAs

Industry Information

Underlying asset dynamics

Regulatory framework

Key growth drivers and risks in the finance market

Housing finance
Opinion
Outstanding portfolio growth and market dynamics

Review of housing finance market growth

Brief analysis on real estate markets in top 10 cities

Growth outlook for HFCs

 Analysis of large HFCs vis--vis small and medium sized HFCs

Market share of HFCs vs. Banks including outlook

Key competencies which will help HFCs sustain business growth despite competition from banks

Player wise market share of HFCs

Breakup of HFC portfolio (Retail housing loans, Non-Retail)

Profitability

Borrowing profile of HFCs

Profitability of HFCs separate trend for large HFCs vis--vis small and medium sized HFCs

Profitability- Retail housing loans and non-retail segment

Capital adequacy

Asset quality

Past trend in Gross NPAs

Outlook on GNPAs

Industry Information

Underlying asset dynamics and demand drivers

Regulatory framework

Key growth drivers and risks in the finance market

Low cost housing finance (Ticket size of <Rs 1 million)

Opinion
Outstanding portfolio growth and market dynamics

Segmentation of housing finance market based on ticket size

Mapping of housing finance market based on ticket size and risk assessment

Region wise distribution of housing finance market

Review of low cost housing market growth

Outlook for low cost housing finance focused HFC growth

Key drivers for growth

Business model of low cost housing players

Customer risk assessment in low-cost housing finance

Key risks
Profitability

Borrowing mix of housing finance players based on size

Profitability of housing finance players based on ticket size

Asset quality

Loan Against property

Opinion
Outstanding portfolio growth and market dynamics

Review of LAP market growth

Outlook for LAP market growth

Key drivers for growth

Trend in share of tier II cities

Market share of Non-banks vs. Banks including outlook

Business sourcing mix for Non-Banks

Business models for Non-banks, Private sector banks and public sector banks

Profile of the Non-bank customers

Collateral mix for Non-banks

Key market parameters (Interest rates, loan to vale, average ticket size, tenure)

Key risks involved while providing LAP

Profitability

Asset quality

Past trend in Gross NPAs

Outlook on GNPAs

Auto Finance
Opinion
Outstanding portfolio growth and market dynamics - overall Auto finance

Underlying asset growth outlook

Growth outlook for NBFCs (including Segment wise growth expectations for new vehicle sales)

Market share of NBFCs vs. Banks including outlook

 Player wise market share of NBFCs

Breakup of NBFC portfolio

Indicative yields and GNPAs across segments

Segment wise key parameters like Penetration, LTV, Tenure, ATS

Profitability overall Auto finance

Borrowing profile

Profitability

Capital adequacy

Asset quality overall Auto finance

Past trend in Gross NPAs

Outlook on GNPAs

Tractor finance

Current market size and past growth

Share in disbursements for NBFCs, private sector banks and others

Key competencies which will help NBFCs sustain business growth despite competition from banks

Disbursement growth outlook

Key market parameters (Loan to value, finance penetration)

Profitability

Asset quality

Used CV finance market

Current market size and past growth

Disbursement growth outlook LCV and MHCV separate calls

Share in disbursements for NBFCs vs Banks

Key market parameters (Finance penetration, risk profile, interest rate, loan to value ratio)

Key success factors for used CV finance business

Profitability

Asset quality

Used car finance market

Current market size and past growth

Disbursement growth outlook

Share in disbursements for NBFCs vs Banks

 Key parameters on which players compete

Profitability

Asset quality

Industry Information Overall Auto finance

Underlying asset dynamics and demand drivers

Evolution

Regulatory framework

Key growth drivers and challenges in the finance market

Construction equipment loans

Opinion
Disbursement growth and market dynamics

Growth in disbursements Review and outlook

Organised vs unorganized segment

Finance penetration

Market share of NBFCs vs Banks

Growth outlook for NBFC Assets under management

Player wise market share of NBFCs

Breakup of NBFC portfolio (new vs used; Contractor vs. Hirer/Rental)

Profitability

Borrowing profile

Profitability

Asset quality

Industry Information

Underlying asset dynamics and demand drivers

Regulatory framework

Key success factors and challenges in the finance market

Wholesale finance
Opinion
Outstanding growth and market dynamics

Current market size and past growth

Market share of NBFCs vs. Banks including outlook

Growth outlook for NBFCs

Key competencies which will help NBFCs sustain business growth despite competition from banks

Profitability

Asset quality

SME loans
Opinion
Outstanding growth and market dynamics

Current market size and past growth

Market share of NBFCs vs. Banks including outlook

Growth outlook for NBFCs

Channels for sourcing business

Key competencies which will help NBFCs sustain business growth despite competition from banks

Customer profile (Manufacturing, Services, Trading)

Profitability

Asset quality

Gold Loan
Opinion
Outstanding portfolio growth and market dynamics

Review of the gold loan market

Growth outlook for NBFCs

Market share of NBFCs vs. Banks including outlook

Key competencies which will help NBFCs sustain business growth despite competition from banks

Region wise breakup of NBFC portfolio

Player wise market share of NBFCs

Profitability

Borrowing profile, securitisation trend

Profitability

Capital adequacy

Asset quality

Past trend in Gross NPAs

Outlook on GNPAs

Sensitivity of gold prices and LTV on probability of default

Industry Information

Underlying asset dynamics and demand drivers

Features of gold loans (Interest rate, tenure, LTV, ATS), comparison with personal Loan

Regulatory framework

Key growth drivers and risks in the finance market

Micro finance
Opinion
Outstanding portfolio growth and market dynamics

Review of AUM growth for MFIs

Growth in ticket size and number of clients

Growth outlook for MFIs separately for players with SFB license

Market share of MFIs vs. Banks including outlook

Key trend of MFIs and Bank portfolio (Average ticket size, GNPAs)

Impact of small bank licenses on the MFIs

Player wise market share of MFIs

State wise split of MFI AUM and client base

State wise portfolio growth of MFIs

Urban rural client mix of MFIs

Proportion of loans given for income generation vs consumption

Profitability

Borrowing profile

Trend in securitization

Profitability outlook for players with SFB license and without SFB license
 Difference in profitability of small and large players

Asset quality

Past trend in Gross NPAs

Outlook on GNPAs

Industry Information

Evolution of the industry

Business models

Regulatory framework

Key growth drivers and risks in the finance market

Player Profile for All Segments Covered

Infrastructure Financing
IFCI Ltd Power Finance Corporation Ltd
IL&FS Financial Services Ltd Rural Electrification Corporation Ltd
India Infrastructure Finance Company Ltd SREI Infrastructure Finance Ltd
L&T Infrastructure Finance Ltd

Housing finance
Can Fin Homes Ltd L&T Housing Finance Ltd
Dewan Housing Finance Corporation Limited LIC Housing Finance Limited
GIC Housing Finance Limited PNB Housing Finance Limited
Housing Development Finance Corporation Ltd Reliance Home Finance
ICICI Home Finance Company Limited Repco Home Finance Ltd
Indiabulls Housing Finance Ltd (Consolidated) Tata Capital Housing Finance Ltd

Auto Loans
Arman Financial Services Limited Kotak Mahindra Prime Ltd
AU Financiers (India) Ltd L&T Finance Ltd
Bansal Credits Limited Magma Fincorp Ltd
Berar Finance Limited Mahindra & Mahindra Financial Services Ltd
BMW India Financial Services Private Limited Manba Finance Limited
Bussan Auto Finance India Private Limited Muthoot Capital Services Ltd
Ceejay Finance Limited Sakthi Finance Limited
Cholamandalam Investment & Finance Co Ltd Shriram Transport Finance Co Ltd
Daimler Financial Services India Private Limited Sundaram Finance Ltd
Equitas Finance Pvt Ltd Tata Motors Finance Ltd
Family Credit Limited Toyota Financial Services India Ltd
Hero Fincorp Ltd TVS Credit Services Limited

Construction equipment loans

SREI BNP Paribas
 Gold Loan
Kosamattam Finance Ltd
Manappuram Finance Ltd
Muthoot Finance Ltd
Micro finance
Annapurna Microfinance Pvt Ltd
Arohan Financial Services Pvt Ltd
Asirvad Microfinance Pvt Ltd
Cashpor Micro Credit
Equitas Microfinance India Pvt Ltd
ESAF Microfinance
Fusion Microfinance Pvt Ltd
Future Financial Services Ltd
Grama Vidiyal Microfinance Pvt Ltd
Grameen Koota Financial Services Pvt Ltd
Janalakshmi Financial Services
Low Cost Housing
Aadhar Housing Finance Limited
Aditya Birla Housing Finance Limited
Akme Star Housing Finance Limited
Aptus Value Housing Finance India Limited
Aspire Home Finance Corporation Limited
Au Housing Finance Limited
Bajaj Housing Finance Limited
Capital First Home Finance Private Limited
Cent Bank Home Finance Ltd
DHFL Vysya Housing Finance Limited
Edelweiss Housing Finance Limited
Equitas Housing Finance Private Limited
Fullerton India Home Finance Company Limited
Gruh Finance Ltd
HDB Financial Services Ltd
Ind Bank Housing Limited
India Home Loans Limited
Wholesale Finance
Aditya Birla Finance Limited
Altico Capital India Private Limited
Axis Finance Limited
IndoStar Capital Finance Limited
KKR India Financial Services Private Limited
Muthoot Fincorp Ltd
Muthoottu Mini Financiers Limited
Madura Micro Finance Ltd
Namra Finance Limited
S V Creditline Pvt Ltd
Satin Creditcare Network Ltd
SKS Microfinance Ltd
SMILE Microfinance Ltd
Sonata Finance Pvt Ltd
Suryoday Microfinance Ltd
Ujjivan Financial Services Pvt Ltd
Utkarsh Micro Finance Pvt Ltd
India Infoline Housing Finance Limited
Magma Housing Finance
Mahindra Rural Housing Finance Ltd
Manappuram Home Finance Private Limited
Manipal Housing Finance Syndicate Limited
MAS Rural Housing and Mortgage Finance Limited
Micro Housing Finance Corporation Limited
Muthoot Housing Finance Company Limited
New Habitat Housing Finance and Development Limited
Religare Housing Development Finance Corporation Limited
Sahara Housingfina Corpn Ltd
Shriram Housing Finance Ltd
Shubham Housing Development Finance Company Private
Limited
SRG Housing Finance Ltd
Sundaram BNP Paribas Home Finance Ltd
Swagat Housing Finance Company Limited
L&T Finance (Holdings) - Wholesale Financing
Piramal Finance
STCI Finance Limited
Tata Capital Financial Services
 Diversified business
Bajaj Finance Ltd India Infoline Ltd
Capital First Ltd Intec Capital Limited
Capital Trust Limited MAS Financial Services Ltd
Capri Global Capital Ltd Reliance Commercial Finance
Edelweiss Financial Services Ltd Religare Finvest Ltd
Essel Finance Business Loans Ltd Shriram City Union Finance Ltd
Fullerton India Credit Company Ltd Vistaar Financial Services Private Limited
IFMR Capital Finance Private Limited
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Last updated: April 2016

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