The liquidity situation is tight in the non-banking financial company' business and a part of this problem is resulting in stress on the NBFC's asset quality, said Rashesh Shah, chairman and CEO at Edelweiss Financial Services.

Rating agency CRISIL on Saturday downgraded Edelweiss group firm ECL Finance's long-term debt instruments rating and reaffirmed commercial paper (CP) issue and short-term debt programme rating.

The rating agency also has withdrawn its rating on long-term principal-protected market-linked debentures of Rs 3.6 crore and non-convertible debentures of Rs 50 crore.

"For the last one year, about Rs 11,000 crore or around 20 percent of our total asset base is in real estate credit, which is spread over 160 projects,” he added. However, Shah said, Edelweiss is not just an NBFC or just in real estate.

"We have SME credit business, retail home loan, agri credit business, we have other businesses like asset management, wealth management and ARCs,” he added.

Shah said that Edelweiss has no exposure to stressed assets of Lodha, Indiabulls or Wadhawan group companies.

"As I said in the last one year we have overseen all the 160 projects, we are usually at SPV level, we are usually the only creditor at the SPV level so we have a fair amount of control on that project and these are 160 projects across India; no project is very large, no huge exposure is concentrated and as a result of that we have been able to manage projects and a lot of these projects are moving along well,” he further added.

"We had a small bond exposure to DHFL bonds like everybody else in our treasury and insurance business but those have been provided for small amounts of Rs 30-40 crore, but overall as I said we have no exposure," he further mentioned.

"We work with good strong upcoming developers who have strong project execution capacity and we work at a project level; we do not work at a developer level,” said Shah.

On the demand front, Shah said the underlying demand is not bad and data shows that home sales have been almost the same year over year in the first quarter of FY20.

About real estate business, he said, “On an average in real estate the credit cost is about 2 percent of your overall book. On Rs 11,000 crore we should have about 2 percent in an average year which is about Rs 220 crore.”