NBFC AUM Set To Zoom with Cars and Homes in the Fast Lane
NBFCs are revving up! Their assets under management (AUM) in vehicle finance and home loans, which together make up nearly 44% of total NBFC AUM, are cruising towards an 18-19% growth, says Crisil Ratings. Thanks to recent GST cuts, car sales are getting a turbo boost, while a growing love for premium rides and used-vehicle financing keeps the momentum alive. Home loans aren’t left behind either, with steady demand despite tough competition from banks. Overall, NBFCs are steering carefully but confidently, aiming to cross the whopping Rs 50 lakh crore AUM milestone by March 2027.
Vehicle Finance To See Robust Growth
The report highlighted that recent Goods and Services Tax (GST) cuts have boosted unit sales across vehicle categories, particularly cars. This momentum is expected to continue, with vehicle sales projected to grow steadily at 16-17% over this fiscal and the next. Additionally, an increasing preference for premium vehicles among buyers, along with a focus on used-vehicle financing, will support AUM growth in the segment, even as competition with banks remains strong in new vehicle financing.
Home Loans To Maintain Steady Traction
In home loans, which make up nearly 22% of NBFC AUM, growth is estimated at 12-13% over the next two fiscals, slightly down from ~14% last fiscal. While long-term demand for end-user housing remains strong, growth will be marginally slower due to intense competition, especially from public sector banks in the prime home loan segment. Moreover, an expected moderation in residential real estate sales (in value terms) in the top seven cities could affect the disbursement of new home loans.
Cautious But Sustained Overall AUM Growth
Crisil Ratings’ Chief Ratings Officer, Krishnan Sitaraman, noted, “Vehicle finance and home loans will see steady growth amid intensifying competition. However, exercising due caution on heightened customer leverage, NBFCs will adopt risk-calibrated growth, especially in the MSME and unsecured loan segments.” The report further mentioned that the overall AUM of NBFCs is set to grow steadily at 18-19% this fiscal and next, and is expected to cross the Rs 50 lakh crore mark by March 2027.
(This news has been syndicated fromm ANI, mildly edited for clarity)
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