My Best Pick 2018

Ekansh Mittal

Katalyst Wealth's founder has picked up a gold loan company that is derisking its core business

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Published 4 years ago on Jan 08, 2018 5 minutes Read
Vishal Koul

Running a non-banking finance company (NBFC) is not an easy task. It is said that behind every successful NBFC there are hundreds that fail. Well, it’s also easy to understand as to why the failure rate is high; to begin with, the companies are leveraged 8-10 times, hence, the margin for error is very small and then, even if the management is prudent, new regulations, political interference or one-off event such as demonetisation can bring companies down on their knees or wipe out their capital completely. We have quite a few listed NBFCs which have faced near-death events but yet emerged stronger, and one such company is Manappuram Finance. Running a non-banking finance company (NBFC) is not an easy task. It is said that behind every successful NBFC there are hundreds that fail. Well, it’s also easy to understand as to why the failure rate is high. To begin with, the companies are leveraged 8-10 times and, hence, the margin for error is very small. Also, even if the management is prudent, new regulations, political interference or one-off event such as demonetisation can bring companies down on their knees. We have quite a few listed NBFCs which have faced near-death events but yet emerged stronger, and one such company is Manappuram Finance.