Problem statement 

How our services supported a non-banking financer identify a large opportunity in wholesale finance for on-lending purpose? 

Background to the Client's Requirements

CRISIL's assessment helped NBFC gain market insights, identify key players, evaluate industry benchmarks, and select financially stronger companies, enabling a successful wholesale lending portfolio launch

Solution Provided

A leading non-banking finance company (NBFC) approached CRISIL to gain valuable insights into the lending industry and identify opportunities to create a wholesale lending portfolio. Leveraging its extensive coverage and experience in tracking the financial services industry, CRISIL utilized its comprehensive database, which covers large share of the industry, to begin the assignment.

To identify the financially stronger companies, CRISIL employed its extensive database of underlying companies in the industry to select a set of key financial ratios as benchmarks. Subsequently, advanced statistical analysis techniques, including percentile, mean, standard deviation, and normal distribution approaches, were applied to analyze the players and assign relative performance scores.

As a result of this rigorous process, CRISIL was able to determine the market size of the industry and categorize companies into various buckets to identify the target segment. Additionally, a comprehensive default study was conducted for the underlying industry to understand the intensity and nature of risk involved. CRISIL's in-house expertise was also utilized to identify favorable companies based on revenue exposures.

Throughout the engagement, CRISIL provided knowledge transfers and regular training to the client's team members. By leveraging CRISIL's expertise and insights, the client was able to successfully launch a wholesale lending portfolio. 

Client impact 

With CRISIL's comprehensive insights, the client was empowered to make informed decisions and drive business growth. Specifically, the client was able to:

• Zero in on the target market segment and leverage the identified companies as a starting point to shortlist potential borrowers
• Diversify its portfolio across various segments and geographies, mitigating the risk of concentration and ensuring a more balanced risk profile, thanks to the distinct cohorts identified by CRISIL
• Leverage the industry-specific default study to pinpoint potential risk in specific industries and proactively manage sectoral exposures, thereby making informed investment decisions that minimize risk and maximized returns.