The year under review has been a
very challenging one for the Non
Banking Financial Sector in India,
especially after the IL&FS episode in
September 2018. The infrastructure
sector in India has also been
facing challenging times. But, your
Company has strongly withstood the
storms and is well ensconced in its
re-engineered financing activities.
The Indian economy has slowed
down in comparison to the previous
years and also there has been a
slowdown globally. The General
Elections in India just got over, and the
National Democratic Alliance (NDA)
government is back with a stronger
mandate for the next five years which,
we all hope, will enable them to build a
stronger India in all respects.
On the domestic front, a marked
slowdown is visible in capital goods
formation and the manufacturing
sector. Lower economic activity is
getting reflected in lower tax collections
as well. The government, sensing
the seriousness of the situation, has already initiated discussions with
the various stakeholders and we
expect swift action to address all the
concern areas. An infrastructure-led
pump-priming of the economy looks
very much on the cards. Right now,
creating employment is one of the
top priorities for the government, and
there can be no better way to do this
than by stepping up infrastructure
creation. Jobs for the semi-skilled and
unskilled people will be created in
During the year under review, the sheen on the India Growth Story remained intact. India once again moved up in the World Bank’s ‘Ease of Doing Business’ survey. Progress on the Insolvency & Bankruptcy Code (IBC) has been slower than expected, but it has nonetheless ushered in a healthy credit culture, and this will reap rich dividends in terms of attracting more investments to India. The roll-out of the Goods & Services Tax (GST) has considerably expanded the tax base, formalised larger segments of the economy and heralded a transparent way of doing business. Further rationalisation of the GST tax rates will provide a huge boost to entrepreneurship.
The cumulative impact of all these
has been India’s rising appeal as
an investment destination amidst
a scenario of global slowdown.
India recorded a total FDI (equity + re-invested earnings + other capital) of
USD 64.4 billion during the year under
review, up from USD 61 billion in
2017-18. For the first time, India’s total
exports (goods and services combined)
surpassed the USD 500 billion mark.
With a foreign exchange reserve of
more than USD 420 billion, India is
prepared to weather any probable
The Union Budget 2019-20, to be presented in July, is likely to provide clarity on the direction of reforms that this government will undertake. If the Interim Budget 2019-20 was any indication, we feel this government will focus more on the social sector and, in particular, will aim to uplift the standard of living of the rural masses. Going forward, we foresee a major push in the construction of roads and highways and rural infrastructure. The forecast of a near-normal monsoon and government’s steps to spur the rural economy will trigger brisk activity in the agrarian sector.
Reserve Bank of India (RBI) acted proactively and introduced a number
of steps to help the NBFC sector to
deal with the liquidity situation. One
such step has enabled your Company
to undertake co-lending with banks.
This will work out to be a win-win
situation for us and our bank-partners.
While the banks will provide the bulk of
funds for co-lending, we will add value
with our excellence in management of
economically productive assets. Thus,
co-lending will allow your Company
to bring down the leverage on the
balance sheet and at the same time
bring down our cost of capital. From
here onwards, we are headed for a
more volume-driven game with a focus
on improving the return on equity. So
far, your Company has tied up with five
public sector banks.
Taking note of the fact that technology will be the defining factor behind one’s competitiveness in the digital age, the management of your Company has been extensively investing in technology. The Company has built resilient operations and embraced digitalisation. An interactive platform has been introduced which has received encouraging response from our customers and vendor partners. To ensure that digitalisation plays an integral part in our future innovations, your Company is also investing in training to create a smart, future-ready workforce.
The management is also keenly
following the developments on the IBC
front as we expect several brownfield
investment opportunities to open
up there. Your Company, with its
expertise, experience and skill-sets,
is well placed to provide turn around
support to some of the stressed
infrastructure projects that are under
the IBC resolution process.
The Indian economy, despite some signs of stress, is still growing faster than most major economies. Thus, the prospects for your Company remain bright. Equipped with the resources, processes, manpower, technology, and more importantly the experience and expertise gained over the years, your Company is keen to scale new heights in the infrastructure space. We look forward to receiving your continued support in this exciting journey ahead.