These companies, however, recorded a robust growth of 21.9 per cent during 2018-19 on the back of increased lending and investments activities, said the study.
“Net profit growth (year-on-year) moderated to 2.6 per cent in 2018-19 (5.3 per cent in the previous year) and profitability ratio (net profits to total net asset) also declined,” said the study.
It added that asset finance companies as well as share trading and investment holding companies made good profits whereas loan finance companies continued to report losses due to write-off of bad debt.
The study covered audited annual accounts of 15,206 NGNBF&I companies accounting for 83.3 per cent of the total paid-up capital of all these companies as on March 31, 2019.
As per the study, combined balance sheet of the companies expanded 17.6 per cent during 2018-19 over and above the 24.5 per cent increase in the previous year. Asset finance companies had the largest share (45.5 per cent), it said.
“Nearly 57 per cent of total expenditure during 2018-19 was on account of interest payments: Share capital and borrowings had around 20 per cent and 60 per cent shares, respectively, in total liabilities of the NGNBF&I companies in March 2019,” it said.
Business expansion during 2018-19 was largely funded by external sources in the form of bank borrowings, bonds and debentures, share capital and premium.