Non-bank finance company Magma Fincorp is eyeing growth in both disbursals and assets under management in 2018-19 amid concerns of a liquidity crunch in the NBFC sector in the wake of the IL&FS defaults and potential asset-liability mismatch.

A higher exposure of liability from banks rather than the debt markets has turned out to be a boon for the city-based firm which has lesser liquidity worries in the immediate term, said Sanjay Chamria, vice-chairman and managing director of Magma Fincorp.

The firm will continue to adopt a similar strategy for its liability profile in the future.

“For us, it has been business as usual. We have more than 65 per cent of our liability from banks. As a strategy we shall continue to have a higher weightage of banks on total borrowing,” Chamria said.

Magma Fincorp, which lends across asset-backed finance segments such as commercial vehicles, construction equipment as well as farm and SME finance and mortgage/home finance, has seen a 25 per cent year-on-year growth in disbursals at Rs 1,480 crore during the first quarter of 2018-19.

Chamria said the growth momentum in disbursals was expected to continue in the coming quarters of the fiscal.

The assets under management of the NBFC stood at Rs 15,966 crore at the end of the June quarter.

The liquidity concern of NBFCs primarily stem from the fact that at least 30 per cent of the gross payables of these firms are to mutual fund companies, according to the Reserve Bank of India’s financial stability report.

With a large chunk of the short-term commercial papers due for repayment in the October-December quarter and mutual funds not primarily interested in renewal, it could lead to a liquidity crunch for many NBFCs.

The major concern, according to a senior executive of an asset management company, is that several NBFCs borrowed short term while their revenue streams have longer terms, leading to asset-liability mismatch risks.