NBFC delinquencies could see up to 250 bps spike this fiscal

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New Delhi, Sep 18 | The rapid increase in Covid-19 afflictions and intermittent lockdowns will increase asset quality challenges of non-banking financial companies (NBFCs), already grappling with the economic slowdown since last fiscal, Crisil Ratings said on Friday.

According to Crisil, the trend in monthly collection efficiency till August 31, 2020 (unadjusted for moratorium) shows there is still some way to go before reaching pre-pandemic levels. While the recent restructuring scheme afforded by the Reserve Bank of India (RBI) would be a leash on reported non-performing assets (NPAs), underlying challenges continue.

Loan delinquencies of NBFCs could dart up 50-250 basis points (bps) this fiscal, depending on the segment of operation, because of vulnerability in borrower cash flows. This is a base-case estimate without factoring in loan restructuring and the Covid-19 affliction curve, the report of the agency said.

Assets under management (AUM) of NBFCs are also expected to de-grow this fiscal. Managing collections, after the end of moratorium, is crucial.

Moratorium uptake was higher in April and May, while collections were slack with a stringent lockdown in place. Though collections have improved since June as the economy began opening up, the pace of improvement and extent of ultimate credit losses will be the key monitorables going forward.

According to Krishnan Sitaraman, Senior Director, Crisil Ratings : “While there has been an improvement across segments over the past four months, collections in the wholesale, MSME, and unsecured segments are still much lower than before the pandemic. Now that the moratorium has ended, self-employed borrowers are likely to be impacted more because of slow resumption of economic activity and continued local restrictions. On the other hand, the salaried borrower segment will be more resilient despite pay cuts and job losses.”

Understandably, each asset class will behave differently based on the underlying borrower profile, linkage to economic activity and local restrictions. For instance, in home loans, the largest NBFC segment, asset quality is expected to be relatively better than in the other segments. Salaried customers make up over two-thirds of the home loans portfolio, and self-employed the balance.

We expect delinquencies in home loans to rise 30-50 bps for salaried professionals and 150 bps for self-employed/ affordable housing segments this fiscal. In vehicle finance, the second large NBFC segment, asset quality will depend on improvement in macroeconomic environment as commercial vehicles constitute bulk of the portfolio, the ratings agency said.

Given the weak economic activity and slow pick-up in freight, collection efficiency has remained well below pre-pandemic levels in vehicle loans. Increase in early delinquencies is expected to be the highest in this asset class.

The MSME and unsecured segments are likely to see the cascading impact of lockdown on the operations of borrowers and lenders, with heightened risks of salary cuts and job losses, and weak economic activity. However, with entities typically adopting aggressive write-off policies, the reported NPAs for unsecured loans may not reflect the true stress in the segment.

As in the past year, the wholesale segment will be in a cleft stick because of the impact on cash flows of borrowers and slowdown in real estate sales. From a recovery perspective, a lot will depend on the timelines and modalities of lifting of lockdowns and return to normalcy in operations of NBFCs.

The restructuring scheme for MSME borrowers and personal loans announced by the RBI may now limit the rise in NPAs in these segments. Nevertheless, NBFCs are expected to be prudent in offering restructuring selectively to deserving accounts and not in a blanket manner.

Ajit Velonie, Director, Crisil Ratings said, “As opposed to reported GNPA, collection efficiency will be a better yardstick to measure asset quality challenges now. Given the trend till August 2020 and the lingering uncertainties, it is imperative that NBFCs create capital buffers for asset-side risks. The good part is we have seen many of them raising capital of late. Those with weak capital buffers may see their credit profiles getting affected.”

Source: IANS

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An actor must be thick-skinned: Kriti Kharbanda

An actor must be thick-skinned: Kriti Kharbanda

New Delhi, Oct 27 | Giving up and sitting back has never been an option for actor Kriti Kharbanda who insists that as an actor it is important to be thick-skinned in order to survive. Adding that for an actor, there are always enough people to put him/her down, but very few who will motivate, she says, “You should be your biggest cheerleader. The moment you give up on yourself, the world will refuse to help. And when one decides not to, nothing in the world can break you. Before my big hit, people would say, ‘she won’t last’. However, I refused to pay any heed to that, and focussed on the positives — there were many still willing to put money on me. Then came the life changing hit. But it happened to me only because I didn’t give up and kept going.”

Kharbanda who will be seen in Bejoy Nambiar’s ‘Taish’ along with Pulkit Samrat, releasing on October 29 on Zee 5, says that the director managed to bring out the best in her and the role was both challenging and intense. “It is unlike anything I have done before. ‘Taish’ has introduced me to a very different side of my acting abilities. Working on this film has taught me several things which I would like to imbibe and utilize while working on other projects too.”

Expecting that the film will precipitate more work, the actor who made her acting debut in 2009 with the Telugu film ‘Boni’ and has worked in Kannada, Hindi and Telugu language films does not really see any drastic contrasts between the industries in different regions. “It is all about the the people you work with. I have had good and bad experiences everywhere. There is never a guarantee that if you are working within a particular region or with a production house, everything will be smooth or bad. For me, it has only been about personal growth, no matter which language I have worked in. How I used to understand and respond to a situation — I wouldn’t react the way I did five years ago, considering one matures with age.”

Excited about the kind of cinema being made by a newer crop of directors working on a smaller budget and willing to experiment with narratives, the actor who starred in films like ‘Veerey Ki Wedding’ and ‘Pagalpanti’ says she is always on a lookout for roles that pose new challenges. “So many talented people coming from across the country are coming forward with novel stories. I would love to be part of those tales.”

As one witnesses major films being released on OTT platforms, Kharbanda says that while an actor would love a theatre release considering the experience it offers to audiences, in times like these, premieres on digital platforms are understandable. “Well, if theatre releases are not happening, this cannot mean that we would stop working. Also, it makes all the sense to support the producer if he decides that the future of the film is on an OTT platform.”

For someone who does not mind spending time at home, the lockdown was not really brutal. “I am glad that I managed to learn several new things during that time including playing the piano. The idea is to constantly think ahead. The lockdown taught me to prioritize my physical and mental health. We now know not to take anything for granted.”

All set to start shooting for her next film ’14 Phere’ to be directed by Devanshu Singh, Kharbanda adds, “I have also signed something else, which should be announced by the last week of November.”

(Sukant Deepak can be contacted at sukant.d@ians.in)

Source: IANS

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Bookshelf: Books that spotlight children's mental health

Bookshelf: Books that spotlight children's mental health

New Delhi, Oct 27 (IANSlife) In these unprecedented times, when isolation fatigue, gloom and the fear of losing a beloved has also come to grip children, taking care of their mental health is of paramount importance.

Here’s a list of books that address the various emotions children struggle with, and can be companions to them during the hard times.

‘The Room on the Roof’ by Ruskin Bond

A classic coming-of-age story which has held generations of readers spellbound! Rusty, a sixteen-year-old Anglo-Indian boy, is orphaned and has to live with his English guardian in the claustrophobic European part in Dehra Dun. Unhappy with the strict ways of his guardian, Rusty runs away from home to live with his Indian friends. Plunging for the first time into the dream-bright world of the bazaar, Hindu festivals and other aspects of Indian life, Rusty is enchanted, and is lost forever to the prim proprieties of the European community. Written when the author was himself seventeen, this moving story of love and friendship, with a new introduction and illustrations will be enjoyed by a whole new generation of readers.

‘Who Stole Bhaiya’s Smile?’ by Sanjana Kapur

Bhaiya does not feel like playing these days. Could it be because of his new monster friend Dukduk, who is always hanging around him. No one in the family takes Bhaiya seriously. But Chiru knows there is more than what meets the eye. A story about the lingering effects of depression. The book is illustrated by Sunaina Coelho.

‘Hearts Do Matters’ by Anita Myers

What the world needs now in these times is love. ‘Hearts Do Matter’ supports children and adults through the losses and grief in their life. It teaches us that even when loved ones cannot be with us, we can feel their presence in our hearts. The new release is a beautiful picture book about a little girl who has a very special relationship with her mother. Her mother promised she would always be with her, and she shows in the book that she kept her promise in the most loving way.

Source: IANS

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Yotta infrastructure to invest Rs 7,000 cr for data centre park in UP

Yotta infrastructure to invest Rs 7,000 cr for data centre park in UP

Mumbai, Oct 27 | Hiranandani Group subsidiary Yotta Infrastructure on Tuesday announced to invest Rs 7,000 crore to set up a 20-acre hyperscale data centre park in Greater Noida.

The company said it has received necessary approvals from the US government for the park that will house six interconnected data centre buildings offering 30,000 racks capacity and 200MW of power.

The construction for the first building will commence in December.

“Yotta’s vision to support the Digital India initiative just received a big boost with the inclusion of our northern India campus that will enable us to address India’s growing need for data sovereignty,” said Dr Niranjan Hiranandani, Co-founder and Managing Director of the Hiranandani Group.

In July, Yotta launched the world’s 2nd largest tier IV data centre in its Navi Mumbai Datacenter park.

The company has also inked an MoU with the Tamil Nadu government to set up a campus in Chennai at an investment of Rs 4,000 crore.

“We expect our NCR campus to be operational with the first building before July 2022.

“It was a very natural choice for us to look at NCR to set up our third facility after Navi Mumbai and Chennai, given the growing needs of enterprises and intentions of hyperscale cloud service providers for expanding their availability zones in this region,”: said Sunil Gupta, Co-founder and CEO of Yotta Infrastructure.

Yotta is a managed data centre service provider that designs, builds, and operates large-scale hyperdensity Data Center Parks in Navi Mumbai, Chennai and Delhi.

Source: IANS

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