Realty stimulus: Investors must not bet on NBFCs just yet, say experts

Many non-banking housing financiers have, over the past few months, witnessed deterioration in their wholesale real-estate asset loan book, warranting higher provisioning and thereby limiting growth

The Rs 25,000-crore real estate package announced by the finance minister on Wednesday, after close of trading, revived investor sentiment in stocks of non-banking financial companies (NBFCs; including housing financiers). 

Aided by the overall positive market sentiment (the Sensex was up 0.5 per cent), NBFC stocks gained up to 9 per cent on Thursday. While the government’s move is in the right direction, many experts have advised investors to be patient and selective, as it would be too early to say that NBFCs are out of the woods. 

“The pace of execution and operational details regarding (real estate project) eligibility, etc, are