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Insufficient monsoon and the threat of El Niño could pose serious risks to Non-Banking Financial Companies (NBFCs) in India, as they may negatively affect rural household incomes and loan repayment capacity. This is prompting major NBFCs to strengthen portfolio monitoring and underwriting in vulnerable segments.

The Indian Meteorological Department (IMD) forecasts that the southwest monsoon in 2026 will be 90 percent of the Long Period Average (LPA), indicating reduced rainfall. For NBFCs, the main concern is not the amount of rain itself, but its impact on crop yields, rural incomes, and clients' ability to service debt.

If prolonged rainfall deficit weakens rural cash flows, it could put pressure on financing for tractors and commercial vehicles (CVs), as well as small business lending.

Company Forecasts and Response Measures

Mahindra & Mahindra Financial Services (Mahindra Finance) has intensified monitoring and underwriting in segments more susceptible to agricultural and rural income fluctuations. Raul Rebelo, CEO and Managing Director, noted that the company assesses the El Niño risk through its impact on rural cash flows, rather than solely through precipitation. He emphasized that the El Niño risk is amplified by the overall state of agricultural cash flows, which depend on crop yields, mandi arrivals, Minimum Support Prices (MSPs), and other factors.

For existing credit portfolios, Mahindra Finance has implemented a highly sensitive monitoring mechanism across all regions, with stress thresholds triggering additional collection measures. Regarding new business, the company has raised entry barriers and required greater participation from borrowers in vulnerable groups, including some Small and Medium Enterprises (SMEs) and mobility clients. The company is also closely tracking its tractor portfolio, considering expected harvests and crop composition during underwriting for borrowers whose solvency is closely tied to agriculture. Furthermore, the company uses loan-to-value ratios as a buffer against potential increases in credit costs.

At Shriram Finance, Executive Vice Chairman Umesh Revankar stated that the company prefers to wait another quarter before forming a clearer picture of the full-year growth forecast, citing uncertainty regarding the monsoon deficit's impact on rural incomes and harvests. Revankar added that they are confident in growth of at least over 15% in the next quarter, and if the situation improves, they can catch up and grow faster. He clarified that the impact of El Niño on crops will become clearer after the second quarter.

HDB Financial Services is also closely watching the monsoon progress due to its potential impact on credit costs. CFO Jaykumar Shah reported that past experience showed that such El Niño-related monsoon impacts were a key factor. Therefore, the company monitors the situation daily and weekly to apply various action plans in a timely manner. Shah also explained that HDB Financial's credit cost ratio of 2.3 percent is an assumption of a stable state, not an official forecast for the financial year 27, as the actual result depends on economic conditions and the development of the monsoon situation.

For NBFCs, the key question over the next two quarters will be whether the rainfall deficit leads to reduced rural incomes and an increase in defaults. Although management does not currently forecast widespread asset quality deterioration, it is preparing portfolios for various scenarios. The most significant impact will be on tractor and CV financing, where repayment capacity is closely linked to farm incomes, freight operations, and the broader rural economy. Thus, the monsoon results in the second quarter may determine whether the strong first-quarter growth can be sustained without a corresponding increase in credit expenses.

The developer, based in Gurugram, Signature Global, is considering acquiring land parcels outside the Delhi-NCR region, focusing on implementing large-scale residential projects in new markets. This marks the first time the company, whose shares are listed on the BSE, has ventured beyond its core market since its inception.

Chief Financial Officer (CFO) Rajat Katuria stated that the company will look into low-rise construction and large-format projects spanning from 100 to 150 acres. The company maintains its goal of launching projects worth ₹15,000 crore in the fiscal year 2027, following launches of ₹4,400 crore registered in the first quarter of FY2027. Additional launches are planned for the third and fourth quarters, closer to Diwali, despite a loss of ₹16.5 crore recorded in the first quarter of FY2027 due to launch delays and declining demand.

Katuria emphasized: 'We want to extend this specific product segment to various markets outside Delhi-NCR. We are focusing on low-rise construction and large-format projects covering 100 to 150 acres.' These new developments could resemble Signature's integrated township projects, such as Daxin Vistas in Sohna and City of Colours along the Delhi-Jaipur highway in Gurugram.

He added that the objective is to gain significance in any market the firm enters. 'Low-rise construction is a good model because you can enter the market faster, execute the project, and demonstrate your delivery capabilities in a new region,' he noted.

Although the company has not specified the exact geographical areas under consideration, Katuria mentioned several opportunities. He also noted that the company will focus on projects for the middle-income population in these new locations. The developer stated that it is moving towards achieving the target of ₹15,000 crore in project launches in FY2027, having secured ₹4,400 crore in launches in Q1 FY2027. Company representatives added that further launches are scheduled for the third and fourth quarters, closer to Diwali.

Katuria also explained that Signature has consistently launched projects across various categories over the last eight to nine quarters due to supply shortages in Gurugram. He added that 'the Gurugram market saw very little supply creation between 2014 and 2022 at the industry level, which created a vacuum. The demand for new housing is significantly high, and that is why we believe that supply restriction can only be met through continuous production.'

Looking ahead, Pradeep Kumar Aggarwal, Chairman of Signature Global, expressed optimism regarding the long-term prospects of the housing sector in Gurugram and the wider NCR region. The company reported sales of ₹1,970 crore, which accounts for about 20 percent of its forecast of ₹10,000 crore for FY2027. Nevertheless, Signature Global also reported a consolidated net loss of ₹16.52 crore for the June quarter.

Without disclosing reasons, Katuria assured that the company remains confident in generating revenue exceeding ₹5,000 crore and achieving very good profit after tax (PAT) from historical projects nearing completion. 'We are completing many of our projects this year. We expect to complete projects worth over ₹5,000 crore. Consequently, revenue growth is anticipated during the remainder of the year,' he concluded.

Indonesia has announced the confiscation of 1.3 tons of ketamine, which is one of the largest drug seizures conducted in the archipelago. Ketamine, also known as ketamine, is a fast-acting anesthetic used as a painkiller and, in small doses, as a powerful antidepressant with immediate effect, but it is widely used as an illegal recreational drug.

According to the head of the National Narcotics Agency, Suudi Ario Seto, authorities received information in February that the vessel MV King Sun was traveling from eastern Thailand to Indonesia with a 'suspicious' cargo. This led to months of surveillance.

According to the official, a Navy warship intercepted the vessel on Thursday as it entered Indonesian waters and discovered 65 bags hidden inside the ship. Suudi Ario Seto reported at a press conference on the Indonesian island of Batam that analysis confirmed the bags contained ketamine.

The total volume of the cargo is estimated at 1.3 tons, and its black market value is approximately 100.56 million euros. The distribution of ketamine is strictly controlled and monitored in Indonesia.

The state news agency Antara reported that the vessel was registered under the flag of Tanzania and was intercepted in waters around Riau province, near Singapore. The National Narcotics Agency added that eight crew members on board—seven Burmese and one Taiwanese—were detained.

Suudi Ario Seto also noted that an investigation is ongoing regarding the origin of the cargo, the destination port, as well as the identity of the sender and recipient. Previously, in July, Indonesian authorities seized 3.37 tons of cannabis, preventing smuggling from Thailand and detaining 12 suspects. In 2021, Indonesian police dismantled a network involved in smuggling 2.5 tons of methamphetamine from Afghanistan into the country, arresting 17 people.

Indonesia has one of the strictest drug laws in the world, including the death penalty for traffickers, but the country has maintained a moratorium on executions in recent years.