Documenti di Didattica
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Indian Perspective
Presented By Sunil Kanoria Director SREI International Finance Limited Core Comm. Member - Finance Industry Development Council (FIDC)
LEASING IN INDIA
Evolution phases
Pre 1970
1970-1995
1995-2004
- Exit of large no. of companies: * Small & Large * Indian & Foreign - Regulation by RBI
- Only HP companies - Entry into equipment finance through: - Automobile * Leasing financing mainly for commercial vehicles * Hire Purchase - Fixed Deposit: main - Commencement of car finance source of funds
- Few companies - Access to Capital Markets diversified into related financial - Funds from FDs and Banks services
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Shriram Finance
Tata Finance
GE Capital
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NBFCs are today an Integral Part of Indian Financial System showing improving health:
Maturing industry in which financially & managerially weak companies already weeded out
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Better Customer service Innovative & flexible financing options Continuously reducing NPAs Healthy Capitalisation Innovative resource mobilisation Focused Operation Products/Customers/Geography
Formation of Finance Industry Development Council - a Self Regulatory Organisation for NBFCs
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Unequal competition from Banks & MNCs Cost of Funds No focused / dedicated Recovery Mechanism - Housing Finance Corporations / Banks enjoy special recovery platforms such as DRTs / Recovery officers / Securitisation Act 2002 TDS on interest payments to NBFCs Not applicable to banks NBFC Stigma Credibility issues , Industry brand image Competition for talent - From newer financial services players
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Multiplicity of taxes - Sales tax / Service tax / Entry tax on lease transactions
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Outstanding lease & hire purchase assets around Rs 20,000 crores Large variety of user segment High growth potential in Vehicle Finance
Commercial Transportation Govt. support, Diverse products Personal Transportation Wide Variety, Low finance costs, Increasing Propensity for credit purchase, Huge used car finance market New Products - Dealer Finance, Working Capital Finance, Personal Loans
Around 1.5% as a % of Gross Domestic Capital Formation Very low in sectors like equipment & infrastructure Substantial upside possible
Expansion Opportunity
Huge infrastructure spending in next 5yrs (apprx Rs 3,60,000 crores) Steadily rising disposable income Generating huge demand for consumer goods
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Global opportunities Cross-Border Leases allowed Substantially reduced dependence on public deposits as a source of fund - Out of a total asset base of Rs 40,050 crores, public deposits account for Rs 5,850 crores as against NOF Rs 4,500 crores Comparatively Low Default Rate Particularly in consumer loans and vehicles financing as compared to many other markets
Future Strategy
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Identification of focus areas and core strengths Consolidation Customer centric service
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Improve quality of asset portfolio Implement risk mitigating tools Matching asset-liability tenure Sustainable, varied & innovative resource mobilisation practices
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Operating Leases Leveraged Leases Residual value products Using Depreciation & Tax Shields for structuring
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Develop strong asset management capabilities including repossession & remarketing Long term mutually beneficial vendor relationships
Cross selling
Securitisation
SREI Experience
SREIs introduction
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SREI International Finance Ltd. (SREI) was set up in 1989 Major player in infrastructure project financing Power, Roads and
Ports
Market leader in financing infrastructure construction equipment by way of Lease 32 offices spread across India Total assets under management over US$ 450 million Shareholders Funds of about US$ 50 million Disbursement of more than US$ 265 million during last year Credit rating in AA category signifying high credit quality & high investment grade Recipient of prestigious Willis Harman Spirit of Work Award
SREIs relationships
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IFC Washington, FMO Netherlands and DEG Germany hold 19% equity Host of international banks and institutions have extended lines of credit and mezzanine capital
Strong alliances with leading global and local vendors such as Caterpillar, Volvo, Ingersoll Rand, JCB, Metso Minerals, Writgen, Vermeer, Atlas Copco, Ashok Leyland, Telcon, L&T, Tata Motors, etc.
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One of the lowest NPAs (1.01%) in the industry with strong integrated risk management system and project appraisal techniques
Innovative solutions to enhance competitiveness securitisation, cobranding, and setting up of equipment bank
Strong customer focus and quick response time enables offering customised products and tailor made solutions
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SREI INTERNATIONAL FINANCE LIMITED Vishwakarma 86 C , Topsia Road (S) Kolkata 700 046 INDIA
Tel : +91 33 2285 6294 Fax : +91 33 2285 7542 Mobile : ( +91) 98300 62954 Email : sunil@srei.com Web Site : www.srei.com
THANK YOU