Key Points
If one looks at the root cause of the NBFC crisis, it is clear, it was housing finance companies which were at the centre of the crisis..
If one looks globally also, either directly or indirectly, they have been at the root of a financial crisis or a scam..
Despite all the ills, one of the biggest wealth creators in the history of the Indian stock market has been a housing finance company, erstwhile HDFC which now merged with HDFC bank..
While the rule of staying with capable management, a strong balance sheet is applicable in every industry, it is far more applicable to sector like NBFC and especially in its segment of housing finance..
The reason, a couple of mistakes and a whole lot of effort goes down the drain, in the last five years there have been many examples, where even the best of the names from housing finance have destroyed shareholders wealth..
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