The benchmark indices ended marginally lower on Friday, weighed down by automobile and information technology (IT) stocks. The S&P BSE Sensex ended at 36,227, down 97 points, while the broader Nifty50 index settled at 10,930, down 47 points. In sectoral indices, the Nifty IT index settled 1.1 per cent lower due to a fall in the shares of Infibeam Avenues which crashed 71 per cent to end at Rs 57.90. The Nifty Auto Index, too, fell 2.3 per cent driven by fall in Hero MotoCorp, Apollo Tyres and Mahindra & Mahindra.
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IL&FS crisis: Experts want RBI to cancel licences of 1,500 smaller NBFCs :
India’s burgeoning shadow finance sector is likely to face a shake-up after defaults at one major lender battered the nation’s financial markets in the past week and reinforced worries about credit risk. Industry officials and experts say they expect Indian regulators to cancel the licences of as many as 1,500 smaller non-banking finance companies because they don’t have adequate capital, and to also make it more difficult for new applicants to get approval. The Reserve Bank of India (RBI), which has been tightening rules for non-banking financial companies (NBFCs), did not respond to requests for comment.
Better capitalized and more conservatively run finance firms are likely to swallow up an increasing number of smaller rivals, the experts said. That could make it difficult for many small borrowers to get loans, especially in the countryside where two-thirds of India’s 1.3 billion people live and put the brakes on a surge in private consumption with a knock-on effect on growth.
Infrastructure Financing and Leasing Services Ltd (IL&FS), a major infrastructure financing and construction company, sent shockwaves through the NBFC Sector when it defaulted on some of its debt obligations in recent weeks.