Budget impact: Shriram Fin, Poonawalla Fincorp, other NBFC shares fall up to 5% as higher gross borrowing seen pressuring NIMs

Shares see profit booking in trade. 

• Shriram Finance dropped 5% after govt announced record FY27 borrowing.
• NBFC stocks declined as higher govt borrowing may raise their funding costs.
• Nifty Financial Services index fell 0.4% due to rising bond yield concerns.

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Shriram Finance emerged as the top loser in the benchmark Nifty50 pack on Monday after the government announced a record borrowing plan in the Budget for 2026.

Shares of non-banking financial companies (NBFCs) came under pressure after the government outlined its borrowing programme for FY27, without announcing measures to boost demand for credit. The Centre plans to raise Rs 17.2 lakh crore in FY27, an increase of about 17 percent over the current financial year.

Shriram Finance led the losses among NBFCs, declining over 5 percent. Poonawalla Fincorp slipped around 3 percent, while Muthoot Finance also traded lower, falling up to 2 percent. Bajaj Finance declined and 0.061 percent.

Analysts at Macquarie said higher government borrowing on a gross basis is likely to have a near-term impact on the cost of funds for NBFCs.

JM Financial also flagged concerns, noting that rising bond yields could push up funding costs despite recent interest rate cuts, which may weigh on net interest margins and returns on assets.

The Nifty Financial Services index was down 0.4 per cent during the session. The index had fallen 2.3 per cent in the previous session amid a broad-based sell-off in the equity market.

The government's borrowing in the next financial year is to fund its fiscal deficit projected at 4.3 percent of the GDP. The government borrows from the market to fund its fiscal deficit.

"To finance the fiscal deficit, the net market borrowings from dated securities are estimated at Rs 11.7 lakh crore. The balance financing is expected to come from small savings and other sources. The gross market borrowings are estimated at Rs 17.2 lakh crore," Finance Minister Nirmala Sitharaman said while delivering Budget 2026-27.

(With inputs from Reuters) 

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