Negative impactResults
NBFC AUM growth seen at 20% in Q2FY27, funding costs emerge as key risk
Economic Times 1 hr ago·6 Oct 2026, 1:58 am
Non-banking financial companies (NBFCs) are expected to report a 20% growth in assets under management (AUM) for the second quarter of FY27. This expansion indicates that lenders are continuing to lend despite a challenging macroeconomic environment. However, this growth comes with a significant caveat, as funding costs are rising sharply.
The primary concern for investors is the cost of raising capital. NBFCs rely heavily on borrowing to fund their lending activities. As bond yields climb, the interest expense on these borrowings increases. This directly squeezes the net interest margin, which is the difference between what they earn on loans and what they pay to borrow money.
Going forward, the sector's performance will hinge on how well these companies manage their liquidity and pass on higher costs to borrowers. Investors should monitor the spread between loan growth and funding costs closely, as this will determine the sustainability of the sector's profitability in the coming quarters.
Key takeaways
- Category: Results.
- AI reads the tone as negative (potentially bearish) for the stock.
- Assessed as a significant, market-relevant update.
Why it matters
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