Muted Growth for NBFCs Seen in Q4

NBFC-MFIs are set to witness a 15% y-o-y decline in AUM

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DEMAND MOMENTUM FOR NBFCs remained subdued in Q4FY25. We project a 9% y-o-y growth in assets under management (AUM) for our coverage housing finance companies (HFCs), which includes both affordable and large players. Vehicle financiers are expected to report a robust 20% y-o-y AUM growth, while gold lenders (including non-gold portfolios) may post 29% y-o-y growth.

NBFC-MFIs are estimated to witness a 15% y-o-y decline in AUM. Diversified lenders are expected to deliver strong AUM growth of 21% y-o-y. For our NBFC coverage universe, we estimate loan growth of 15% y-o-y and 4% q-o-q as of March 2025. Notwithstanding seasonality, demand trends and loan growth remained flat during the quarter due to calibrated growth in unsecured retail, muted disbursements in microfinance and low mortgage volumes.