Industry Overview

A robust banking and financial sector is critical for activating the economy and facilitating higher economic growth. Financial intermediaries like NBFIs have a definite and very important role in the financial sector, particularly in a developing economy like India. They are a vital link in the system. The role of NBFIs in both manufacturing and services sector is significant and they play the role of an intermediary by facilitating the flow of credit to the end consumers particularly in transportation, SMEs and other unorganized sectors. The major intermediaries that are included in the NBFI group are Development Finance Institutions (DFIs), Insurance Companies, Non-banking Financial Companies (NBFCs), Primary Dealers (PDs) and Capital Market Intermediaries such as mutual funds. The NBFCs as a whole account for 11.2 per cent of assets of the total financial system.

The Banking sector has always been highly regulated, however simplified sanction procedures, flexibility and timeliness in meeting the credit needs and low cost operations resulted in the NBFCs getting an edge over banks in providing funding. NBFCs have been pioneering at Retail Asset Backed Lending, Lending against Securities, Lending against Gold, Consumer Product Loans, Transport/Vehicle Loans, Microfinance, etc and have been extending credit to retail customers in under-served areas and to unbanked customers.

This higher economic growth and expanded liberalization has given tremendous opportunities to the financial sector. Indian economy finds its major strength to the Domestic Consumption Theory as growth in new sectors like agriculture, education and communication has resulted in higher demand for Consumer Goods, Textiles and Phone/Mobile product and services. Also, it has resulted in growing number of investors for the financial products, thus giving new opportunities to the financial sector.

The Indian Capital Market is showing more strength and stability due to better and transparent systems introduced by Government and administrative authorities. This has resulted in higher valuations and excellent investment opportunities to the Company.

Thus, there is a great potential for growth of the Company in the near future.