1) What sectors in India are doing well presently and which among these would be the right sectors to build value over the long term?
Res: While the monsoon has been excellent, industries related to the rural theme, including auto, agro, speciality chemicals and BFSI industries are doing incredibly well. There are several other sectors that will flourish significantly over time, including energy, power, and infrastructure. These sectors would be the ones that would move India closer to its GDP target of $5 trillion. The profound value that global scenarios provide in high-quality firms and the substantial discounts on their stock prices make them lucrative for investors. When the tide turns and the scenario improves, these businesses are probably going to do better and earlier than other sectors in the markets.
Also, India’s healthcare industry is rapidly becoming one of its most significant ones in terms of employment and income. The middle class’ ageing population and, regrettably, the rise in ailments linked to a sedentary lifestyle have pushed up the need for healthcare. With digital and technological intervention in every aspect of its operations, the healthcare sector is undergoing a disruption. India’s healthcare industry is a potentially profitable one for investors thanks to PPP and FDIs (Foreign Direct Investment) in the domain.
2) If you had to give a piece of advice to entrepreneurs this year, what would you ask them to focus on? Growth or de-risking?
Res: In 2021, India overtook the U.K. to emerge as the third-highest economy, behind the US and China, in terms of the number of unicorns. Start-ups in India have grown remarkably over the last six years. The number of new recognised start-ups has increased to over 14,000 in 2021-22 from only 733 in 2016-17. The Indian government is providing robust support and all the growth triggers are in place for the companies to amplify their growth prospects. Globally, the world is eyeing and looking towards India as an investment hub. Entrepreneurs should start taking risks and leverage support from the government. India is currently suitably placed to support innovation and entrepreneurship. India is one of the world’s largest consumer markets for goods and services and growing.
Entrepreneurs must make the most of this scenario by investing in their ideas to create innovative products and services to benefit Indian consumers and businesses, and foster India’s progress and growth.
3) There is market talk that you’re trying to rebuild a large diversified financial services business from scratch. What do you have to say about that?
Res: The present management is making all efforts to reinvigorate REL and put it on a success path. We are keen to resolve the legacy issues and reclaim our place as a leading player in the BFSI industry. The organization is charting a fresh path with new ventures and is planning to obtain fresh capital for the same.
4) What are your views on India’s growth trajectory? While the IMF has bleak downward projections on the global economy, economists feel India is not insulated from an upcoming global economic shock. What are your views?
Res: I am confident that in the coming years, India will continue to accelerate on its growth path. India has a solid financial foundation and a supportive government, which has enabled it to navigate previous global economic crises and develop into a self-sufficient global economic giant. The RBI took all the flak for being behind the curve in the first quarter of CY22, but I think it was wise to hold off on raising interest rates in a situation when inflation was high but not demand-driven. RBI made the correct decision by evaluating the situation globally and taking a defensive stance. India has risen to the challenge during periods of global economic uncertainty and will continue to do so in the future. Over time, India’s growth rate will continue to outpace the Emerging Market basket and the global economy. The RBI and the government, helped by global softening in commodity prices worked together to bring down inflation, which is presently steady at approximately 7%. This situation is far better than the one in the U.S., where inflation is hanging around 9% and the FED is faced with the difficult choice of raising interest rates at the risk of triggering a recession.
5) What are your views on the global financial markets considering geopolitical issues? How do you think the Indian markets will fare moving forward?
Res: The pandemic and the Russia-Ukraine conflict had a negative impact on the world economy, resulting in a considerable decline in global GDP. Inflation brought on by these geopolitical difficulties and the actions taken by some of the most powerful nations to manage their economies is leading to a reset of global economies. The conflict is predicted to have a significant impact on inflation and global economic growth, and affect global supply networks. The financial markets have been quite erratic since the start of the Russia-Ukraine conflict.
Accordingly, the U.S. economy may also contract. Their inflation numbers are considerably higher than anticipated. The capacity of the Indian financial markets to endure these geopolitical stresses, however, shows enormous potential. Private enterprises have significant CAPEX intentions, and some companies’ findings suggest that Indian markets may benefit from global supply chain disruptions and other instances of demand-supply mismatches.
6) Are the financial services and banking sector an attractive one for doing business in India?
Res: Financial and banking services are the backbone of the modern Indian economy because they provide a means to get credit, which is used to finance almost every commercial and consumer need and has opportunities for reliable and long-term investments. Therefore, there is always a demand for financial and banking services, which increases the scope for business in these sectors. Additionally, the banking sector is resilient and has been able to withstand global economic fluctuations.The BFSI sector is easily one of India’s most attractive business domains because of its stable demand and reliable nature.
7) What’s your view on the housing finance segment? Will the rising interest rate scenario see a dampening of housing demand?
Res: The home finance industry will see phenomenal expansion in the near future. Numerous programmes have been developed by the Indian government to encourage affordable housing given the high consumer demand for the same. With a starting capital of Rs. 10,000 crore ($1.43 billion), the government established the Affordable Housing Fund (AHF) at the National Housing Bank (NHB) to fill the gap in financial institutions’ lending to the priority sector for the HFCs’ microloans.
Because of growing urbanisation and rising household income, there is a greater demand for residential real estate. India is one of the top 10 global property markets in terms of price appreciation. Rising interest rates do not appear to be denting consumer demand as seen by the real estate industry’s strong sales and customer demand figures.
8) What do you think of the Indian insurance industry? Post the pandemic, while there has been a surge in demand for insurance products, at the same time, high claims have impacted the profitability of insurers. How do you see this panning out in the next 2-3 years?
Res: The Indian insurance market has great scope for growth, particularly in the wake of the pandemic. Health insurance products are in incredibly high demand. The Indian insurance market is anticipated to expand quickly over the next two to three years as both GDP growth and the country’s economic situation are anticipated to improve. While the need for insurance is predicted to continue rising, it is anticipated that insurance claims would decline due to advances in technology, vaccine manufacturing, traffic safety, and tougher standards. These elements guarantee that the Indian insurance market will expand quickly and profitably.
9) You mentioned in one of your interviews that Religare is poised to become a 360-degree financial services conglomerate? Could you give us a sense of what you are planning for both the current businesses and any new business lines that Religare is planning to get into?
Res: Religare has handled various legacy difficulties created by its erstwhile promoters and directors. These include arriving at a settlement with SEBI and becoming debt-free (NBFC). Moving forward, Religare Group will concentrate on expanding its business and providing all types of financial services. Through our current operations, we provide a range of financial services to our clients. Our consumer base is enormous and expanding rapidly. We are buoyant about our prospects in many fields, including investment banking, private equity financing, Portfolio Management Services, advisory, etc.
