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NBFC liquidity crises create 20-55% drawdowns in the NBFC sector. Banking also falls 5-8% but quality banks (HDFC, Kotak) recover faster. Crisis spreads through 3-4 entities before stabilising. RBI intervention (CRR cut, OMO) signals the bottom.
Nifty 1 Day
-1.5%
Nifty 3 Days
-4.0%
Nifty 1 Week
-5.0%
Nifty 1 Month
-10.0%
IL&FS — a ₹91,000 Cr infrastructure finance giant — defaulted on commercial paper in September 2018. This triggered a sector-wide liquidity freeze for NBFCs. DHFL, Yes Bank and Reliance Capital were badly impacted. Nifty fell 10% over the month.
IL&FS — a ₹91,000 Cr infrastructure finance giant — defaulted on commercial paper in September 2018. This triggered a sector-wide liquidity freeze for NBFCs. DHFL, Yes Bank and Reliance Capital were badly impacted. Nifty fell 10% over the month.
Historically, HDFC Bank, Infosys were among the strongest performers in the aftermath, based on real 1-week/1-month return data.
The Nifty 50 moved -5.0% in the following week and -10.0% over the following month.
NBFC liquidity crises create 20-55% drawdowns in the NBFC sector. Banking also falls 5-8% but quality banks (HDFC, Kotak) recover faster. Crisis spreads through 3-4 entities before stabilising. RBI intervention (CRR cut, OMO) signals the bottom.
Regime
bull
Repo Rate
6.5%
India VIX
22.3
Data Confidence
92%