India’s non-bank lenders rose after a news paper reported that the Reserve Bank of India will offer them a credit line to help the shadow banks tide over a liquidity crisis.
Indiabulls Real Estate Ltd., Dewan Housing Finance Corp. and Reliance Home Finance Ltd. traded more than 10% higher at 12:00 pm in Mumbai. The benchmark S&P BSE Sensex index gained 2.7% after exit polls released on Sunday showed Prime Minister Narendra Modi’s ruling coalition was poised to win a second term in India’s general elections.
The non-bank lenders, which have been hit by high borrowing costs and largely shut out from the bond market after the crisis at shadow lender IL&FS Group broke out last year, are facing trouble raising funds. RBI is working on a liquidity line and and may seek comments on the draft guidelines after election results are declared on May 23, the Business Standard newspaper reported Monday citing people it didn’t identify.
“There are rumors in the market that RBI will open a special credit line for NBFCs,” Asutosh K Mishra, head of research for institutional equity at Ashika Stock Broking Ltd. said by phone. “That expectation is driving up prices of some of the companies.”
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.