BOI AXA.
You have got quite a few lenders in your portfolios be it the country’s biggest mortgage financiers, some gold loan companies. There are vehicle financiers like M&M Finance, Piramal, NBFCs with wholesale books which got rerated. Where do you stand as far as the lenders are concerned?
In any lending business, there are two big levers; one is the cost of funds and other is the cost of lending or cost of credit. For the last one year, we have seen the cost of funds coming down very drastically and this was reflected in the NIMs at most of the lenders. But then the perceived cost of credit was very high all through the pandemic and now the market is realising that the perception or the hypothesis which they were working on for the NPA levels somehow is not holding correct. As a result, the market is now looking at lenders more positively and the benefit which they were getting because of low cost of liabilities are getting translated into higher multiples.