homefinance NewsExclusive: Carlyle's Sunil Kaul says banking sector in India poised for strong growth
Exclusive: Carlyle's Sunil Kaul says banking sector in India poised for strong growth
Carlyle, the global private equity firm with substantial investments exceeding a billion dollars in India's financial services sector, holds an optimistic outlook for its portfolio companies, including Yes Bank and PNB Housing Finance. In an exclusive interview, Sunil Kaul of Carlyle offers insights into these investee companies during a conversation with CNBC-TV18's Nisha Poddar on "Big Deal."
In an exclusive interview with CNBC-TV18’s Nisha Poddar, Sunil Kaul, Managing Director and Financial Services Sector Lead - Asia at Carlyle Group said the banking sector in India is poised for strong growth if the risk management and business model is in place.
Kaul is bullish on India’s financial services sector. “Deal pipeline is strong,” he said, adding, “discontinuous change in consumption of financial services in India is an opportunity.”
Carlyle has so far invested over $6 billion in India, including in financial services companies such as PNB Housing Finance and YES Bank. Kaul, whose top bet SBI Cards gave the firm bumper profits on exit, is bullish on his present portfolio in India.
On YES Bank Sunil said, “We are very pleased with the work that they have done.”
He pointed to the growth in deposits and repositioning from being a wholesale lender to the retail and SME spaces calling these measures performance accelerators.
Kaul lauded YES Bank’s transaction-making capabilities. On the future drivers for YES Bank, Carlyle sees it geared to capture the growth in financial services consumption. They believe the bank has an opportunity to grow in the under-served SME lending space.
On PNB Housing Finance, the successful repositioning and focus on the retail lending space is delivering good returns, Kaul said.
He highlighted that Carlyle had invested a larger portion of the rights issue as a sign of confidence. "When we feel we can make a difference to the business and scale it up, we stay; we are not a short-term investor," he said.
Affordable housing finance business is currently small for PNB Housing Finance but will be a growth driver for the future and an important part of their overall mix, he said.
"Affordable housing is an important segment; the reason it became hot is because banks were perhaps not servicing it well and it opened an opportunity for other players, it is getting competitive. I think people need to take a hard look at the valuations, whether the valuations are fair.” Kaul said.
Carlyle’s earlier investments in the financial services sector include HDFC, Repco Home Finance, India Infoline, SBI Card, and SBI Life Insurance.
On the global front, Kaul said, high inflation, rising rates, and geopolitical tensions continue to remain some of the key concerns “Valuations will have to adjust to global economic factors” he noted.
On the impact on the financial services sector, he said, “Shock absorption capabilities are high due to liquidity but difficult to see any compelling factors leading to a turn in the interest rate cycle."
(Edited by : Shweta Mungre)
First Published: Oct 10, 2023 2:14 PM IST
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