SKS jumps: New changes in NBFC regulation

SKS reported a downtick of 82% in losses on portfolio of loans and increase of 95% in provisions but is up 11% as NBFC regulation for the sector has again morphed in a continuous readjustment. Still reported losses of 380mln and claims traction in non AP on 35% lower employee expenses The market is apparently reqwarding tihis scrip as the comeback star of the sector championing the NBFC busiiness cause They still has 2350 Mln exposure in AP (residual , to be written off) It raised 2.3B in a QIP at 75 per share last month

11.28 B has been written off on the portfolio in AP and Net Cash is now 4 B, with new lending of 13.7B and 790m revenues from nonAP business/98% collections in AP 

New NBFC – MFI regulations notified yesterday seemingly ease the burden of Capital on these MFIs. The MFIs can now lend at prices above 26% sopricing based on margin from cost of borroing and a total variation of 4% in the rates in the portfolio of loans. Salary Limits are still 60000 and 1q20000 and the instructions from RBI include a limit on eligibility of each JHG or SHG at 10% of the total portfolio and one loan to borrower incl as individual or as member of SHG

Writeoffs on the AP portfolio have been notified as counting towrds NOF and written down over 5 years incl for calculation of CRAR giving it 5 years to raise capital for the written off portfolio  and thus easing the performance of the shares on the NSE

There is no change in the scrip fortunes of MANAPPURAM or MCX promoter FINANTECH 

 

 

 

 

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