Opportunities in India’s burgeoning financial sector

Following the success of the Investing in India 101 segment with Mugunthan Siva of India Avenue Investment Management last month, we were glad to have him back on the global view to discuss opportunities emerging from the nation’s burgeoning financial sector. With 1.4 billion predominantly young people who have widespread access to mobile internet and smart phones, there’s huge potential given the prospects for wealth and incomes in the future. But is that enough in isolation to put your hard-earned capital to work? Mugunthan provides a quick history lesson about trends seen since the end of the GFC, looking at the proportion of the population who are banked, the evolution in bad debt provisioning following a lending boom that occurred around a decade ago, the funding mix for banks, the regulatory environment, along with the big players in the space. He discusses why now is the time to start looking at commercial banks with the dominance of state-backed institutions and private lenders staring to weaken. Mugunthan explains why he is holding ICICI Bank, among others, within the fund portfolio.