Well, this confidence is not all about great financial numbers. It also stems from the fact that SREI has excelled in an area that the larger banks haven’t really entered with a focussed aggression 
the way SREI has (more on that later). But with the Prime Minister saying that $320 billion is needed for infrastructure in India over the next 5 years, Kanoria admits, “It’s not just one company SREI that would be in a position to capitalise; there are so many other companies who can just come in.” And if larger banks, particularly post-2009, get more active in this segment, it could be indeed difficult for SREI to retain its pole position. The main reason is that banks have much cheaper access to capital & can wreak havoc with SREI’s margins. Its sources of funding are basically restricted to wholesale funding, securitisation & equity issuance. And rising interest rates would make its job even tougher, as it may not be possible to pass on the increase to the customer. Is the company in a position to sustain its dream-run amidst such environmental uncertainties?
the way SREI has (more on that later). But with the Prime Minister saying that $320 billion is needed for infrastructure in India over the next 5 years, Kanoria admits, “It’s not just one company SREI that would be in a position to capitalise; there are so many other companies who can just come in.” And if larger banks, particularly post-2009, get more active in this segment, it could be indeed difficult for SREI to retain its pole position. The main reason is that banks have much cheaper access to capital & can wreak havoc with SREI’s margins. Its sources of funding are basically restricted to wholesale funding, securitisation & equity issuance. And rising interest rates would make its job even tougher, as it may not be possible to pass on the increase to the customer. Is the company in a position to sustain its dream-run amidst such environmental uncertainties?For Complete IIPM Article, Click on IIPM Article
Source: IIPM Editorial, 2006
An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative
Source: IIPM Editorial, 2006
An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative
