Similarly, Aditya Birla Finance raised 121-day money at 5.75 per cent, against 7.9 per cent for 32 days last year.
A year ago, the credit market nearly froze as IL&FS started defaulting from September, and governance concerns emerged in systematically important non-banking finance companies
The bond market
still gave money to good companies, but at a high rate. For average companies though, both the bond and credit market became inaccessible as lenders became risk averse.
The situation has not improved much for lower rated companies though, but they have started getting access to the bond market.
For example, a large NBFC raised 45-day loan at 9.5 per cent in November this year. The same company had raised 35 day money in November 2018 at 8.23 per cent.
“Financing condition was always good for top rated companies. But for us, the situation has not improved much in the last one year,” said a senior executive with am NBFC.
But the lower rates and increased issuance should bring back confidence in the market.
“If the situation continues, risk aversion and excessive risk premium should normalise in the market,” said Niyogi.