Source: Ajay Piramal’s interview
On NBFCs:
The next two to three years will be a golden period for NBFCs.
The Indian economy is growing at 7.5 to 8 per cent a year.
The financial space always grows 2.5 times to that of gross domestic product; so, the normal growth should be 20 per cent.
However, in the financial services space, the public sector has got 70 per cent share and is saddled with non-performing assets.
Also, some of the large private banks have large NPAs. Their attention is focused on solving that problem; it also means they do not have enough capital.
And, because of the past NPAs, their ability to take the risk to lend is reduced.
Hence, NBFCs will have a good run.
On RERA:
Because of it, I’m seeing that the marginal players are falling.
We only serve the top-tier customers. Those are the ones whose business will grow.
It is not that demand will come down, but 80 to 90 per cent of developers will have to shut down.
And the top 10 per cent will grow because they have to serve the market.
2 replies on “Ajay Piramal nails it”
I agree. Whenever there is either an intense competition or regulatory drive, the weaker ones, those who practice in unscrupulous practices, cannot sustain and lose out in the long run. Only competent and best ones remain in the race for long run.
I dont fully agree mr. Piramal, in order for economy to grow at the desired pace participation of public sector banks and large private banks is imperative. NBFCs do not have the means to fuel that growth. Although I agree that NBFCs will play a big role.