India Business News: Mumbai: RBI's proposal to tighten lending criteria for project financing by banks and NBFCs weighed on investor sentiment as they sold PSU stocks like.
Some of the traditional methods used for credit assessment of businesses such as using credit history to predict behaviour or analysing cash flows and profitability using bank statements and financial statements are not very helpful.
I think there was a lot of disruption in the rural disposable income on account of the disruption in jobs in the urban area on a post COVID basis. But I think with manufacturing picking up several of those jobs are coming back and those transfers from urban to rural India might be getting back.
The proposed stricter lending criteria, with additional provisioning, are aimed at preventing accounting shocks but could potentially hurt balance sheets of these entities and exert pressure on their valuation multiples, analysts and economists said.
Gurmeet Chadha suggests investments in tier II banks, good NBFCs like Poonawalla UGRO. He discusses impacts on stocks like PFC, REC, IREDA due to RBI norms. Chadha also mentions the excitement around Aadhar IPO and counter cyclical investments in various sectors.