25 YEARS IN INDIA: LEADING WITH IMPACT
NBFC bond yields rising YTD, but spread still
low vs. G-sec
Mid YTM bonds yields
10%
8.6
8.3
7.8
8%
7.5
7.5
6.8
7.2
6.6
6.6
7.3
5.9
6.1
6%
6.0
5.6
5.0
4%
Jun2020
Dec2020
Jun2021
Dec2021
Jun2022
AAA NBFC - 5Yr
AA NBFC 5Yr
-
-5 Yr Gov Bond
Source: Bloomberg, Analyst report, BCG Analysis
Recent Trends
• Given the reliance on wholesale
funding, rising interest rates
adversely impact the NBFCs margins
• With govt. bond yields rising
90-150 bps YTD, NBFCs AAA and
AA-rated paper yields have also
started inching up
However, spread relative to G-sec
declining and at historical lows,
amid surplus system liquidity
• Additionally, a few NBFCs have
also raised deposits rates by 15-25
bps in May
44
Copyright © 2020 by Boston Consulting Group. All rights reserved.View entire presentation