Indian NBFCs drop as government's higher gross borrowing seen pressuring NIMs

Bajaj Finance

02/02/2026 06:31

** Shares of Indian non-bank financial companies fell after the government announced a record borrowing plan for FY27, with no measures to support demand for debt.

** New Delhi plans to raise 17.20 trillion rupees in FY27, up 17% from the current year

** Shriram Finance SHMF.NS led losses in the sector, falling 4.5%, followed by Poonawalla Fincorp POON.NS, down 3.7%

** Analysts at Macquarie say higher government borrowing on a gross basis is likely to have a near-term impact on NBFCs’ cost of funds

** JM Financial echoes this view, noting that rising yields would increase funding costs despite recent rate cuts, squeezing net interest margins and returns on assets.

** The financials index .NIFTYFIN was down 0.4% on Monday, after dropping 2.3% in the previous session amid a broad-based decline in markets

 (Reporting by Kashish Tandon in Bengaluru)

 ((Kashish.tandon@thomsonreuters.com))