Monday, March 11, 2013

“We Have Traditionally Grown Above the Industry”

She began her Journey Inheriting a Legacy of Hard-to-Change Processes, A Rebuilding Phase post the Worst of the Recession, And an ever Expanding Competition from Cutthroat Rivals. She has Weathered Every Storm and firmly Established herself as The Frontrunner among the Most Powerful Women in India Inc. In an Exclusive Conversation with B&E, Shikha Sharma defends Axis Bank’s future plan

B&E: Axis Bank has just launched an infrastructure index. What’s the logic behind the move?
SS: Axis Bank, as you know, has some key focus areas and infrastructure is one of them, with others being entrepreneurship (SME segment), retail franchise and our payment structures. So, these are the four areas where Axis Bank is currently focused on. As far as infrastructure is concerned, we have a lot of expertise in that area. In fact, in the last ten years, we have been looking at infrastructure projects in India across roads, ports, airports and other various segments. Further, if India has to grow fast we have to look at the gaps – and one such gap is infrastructure, because we can’t grow without having world class infrastructure. The other thing that the country needs is the capital for these infrastructure projects. Capital not just from domestic source, but also through broader based market participation including both domestic and foreign institutions. It’s with this intent to encourage investment into infrastructure that we are launching this index, which hopefully over a period of time will give investors the confidence to look at one single transparent number where they can gauge the investment climate in infrastructure sector.

B&E:How big is your infrastructure portfolio right now and what targets does the bank have for the sector?
SS: Infrastructure is a key focus area for Axis Bank and about 20% of our total advances are to the infrastructure sector including power. We believe that infrastructure will be one of the big growth engines for India over the next couple of decades. We also believe infrastructure, retail and entrepreneurship are going to be the big growth areas and that is why these sectors are a key focus area for our bank. We have to build capability to execute that well as we believe that infrastructure will grow significantly in the near future. I think if it goes up to 25% of our portfolio, we will be fairly comfortable because we do have expertise and experience in evaluating infrastructure projects and managing the risks. We don’t have a target number practically, but the way we are looking at this is that we are an India focused bank and as such will focus on the opportunities that we have in hand in India right now and the ones that will come up in the near future. We really don’t have a pre-determined ratio of what a particular segment will look like. What our portfolio ends up looking like will depend on which of the segments grows the fastest (out of the four mentioned earlier) and which create the demand for funds. We believe that if the promise of infrastructure happens, then our proportion of infrastructure could go up.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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