Post on 12-Nov-2014
SME Opportunity in Indian Markets
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Agenda
Overview – ICICI Bank
Emergence of Indian Economy
SME Opportunity - India
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Agenda
Overview – ICICI Bank
Emergence of Indian Economy
SME Opportunity - India
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Assets of US $ 56.3 bn
Globally held (ADR, FII & NRI's own
73.9% stake )Second
largest Bank in India -
Technology Leader
Largest Private sector Bank in India
First Indian Bank to be
listed on NYSE
ICICI Bank – New face of Indian Private Sector Banking
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Our international franchise
Branch
SubsidiaryRepresentative Office
Canada
UAE
Singapore
ChinaUSA
UK
India OBU
Bahrain
Russia
South Africa
BangladeshHong Kong
Sri Lanka
Antwerp1
1. Branch of ICICI Bank UK
Malaysia Indonesia
Thailand
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ICICI Bank - growth horizons
Retail & SME banking
Rural banking
Internationalbanking
…with continuing focus on the corporate banking and building SME franchise
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Some accolades in 2005 -06
“Bank of the Year Award for India” by The Banker
“Best Bank in India” by Euromoney
“Best Integrated Consumer Bank Site in Asia” by Global Finance
“Best Corporate / Institutional Internet Bank” by Global Finance
“Best Consumer Internet Bank” in India by Global Finance
Listed on Forbes' Asia's Fab 50
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Agenda
Overview – ICICI Bank
Emergence of Indian Economy
SME Opportunity - India
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Inward oriented and licensing regime
Capitalising on domestic demand
Directed lending and baking for urban rich only
Pre- 90's landscapePre- 90's
landscape
Mid -90's economic liberalisation
Mid -90's economic liberalisation
Emergence of Indian Economy - I
Opening up of the economy and reduction in trade barriers
Regulatory and financial sector reforms
Restructuring to achieve world class efficiency
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Indian economy gearing up for post GATT / WTO scenario
Accessing global markets for funds raising and exports
Improving quality standards
India's recognition in i.e. intellectual capital, skilled labour and raw materials
Early 2000's belt tightening
phase
Early 2000's belt tightening
phase
Post 2003 Integration with global economy
Post 2003 Integration with global economy
Emergence of Indian Economy - II
Articulation of international competitiveness
Exposure to global forces
Increasing deployment of technology
Indian SMEs were re-aligning and looking for pro-active support for its financing needs.
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Key economic growth driversContinued
expansion of services sector
Upward migration of
incomes
Demographic forces
Resurgent industrial
sector
Resurgent industrial
sector
Sustaining GDP
growth rate of
above 8%
…growing international linkages giving impetus to all sectors of the economy
…growing international linkages giving impetus to all sectors of the economy
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Buoyant investment & financial markets
Equity MarketsAmong best performing markets in the world
NSE and BSE ranked 3rd and 5th in no. of transactions globally*
Bank CreditBank credit grew by 35% in FY2006
Foreign Institutional Investor
Increased by 281% from from FY2000 levels to US$ 11.53 bn in FY2006#
Foreign Direct Investment
Increased by 178% from from FY2000 levels to US$ 5.97 bn in FY2006#
Investment led
growth
*NSE (National Stock Exchange) and BSE (Bombay Stock Exchange)
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Agenda
Overview – ICICI Bank
Emergence of Indian Economy
SME Opportunity - India
Play film
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SME Sector in India
accounts for
SME Sector in India
accounts for
35 % of exports35 % of exports
95% of all industrial units95% of all industrial units
40% of industrial output 40% of industrial output
70% of industrial employment70% of industrial employment
Prime driver of new employment
Prime driver of new employment
Source: SIDBI Report
SME sector is vital to the Indian
economy
SME sector is vital to the Indian
economy
Indian SME Opportunity
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Textiles
Auto Ancillaries
Retail trade
Infrastructure Pharmaceuticals
Engineering
Logistics Travel & TourismSoftware & IT services
Growth opportunities in India
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Auto ancillariesIndustry
Auto ancillariesIndustry
Indian Auto ancillaries industry opportunity
Global auto ancillaries market estimated at US$ 1600 bn plus
Indian Industry is US$ 10 bn with 20% exports.
India serves just 0.6% in global auto-comp market. Indian pie in world to become 3% by FY15
Last 3 years observed Domestic growth of 23% CAGR & export growth of 35% CAGR.
100% FDI allowed through the automatic route
More on Auto ancillaries
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Gems & Jewellery Industry
Gems & Jewellery Industry
Indian Gems & Jewellery industry opportunity
Global Gems and Jewellery market estimated at US$ 85 bn
Indian Gems and Jewellery industry share in global markets is US$ 14.2 bn
India has the largest cutting and polishing industry
Growth opportunities : Manufacturing of Polish Diamonds and Diamond Jewellery
Low Cost base and design skills is the competitive edge
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IT / ITES Industry
IT / ITES Industry
Indian IT / ITES industry opportunity
Global IT / ITES market estimated at US$ 1029 bn
Indian IT / ITES industry share in global markets is US$ 29.6 bn
Industry expected to grow at a CAGR of 50% per annum and to reach US$65 bn by 2009 (Mckinsey study)
Growth opportunities : Software services and product development, IT Consulting, Hardware manufacturing
Constant supply of highly qualified pool of skilled English speaking software engineers
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Pharmaceuticals Industry
Pharmaceuticals Industry
Indian Pharmaceutical Industry opportunity
Global Pharmaceutical market estimated at US$ 600 bn plus
Indian Pharmaceutical industry share in global markets is just 1.8%
In terms of market ranking India ranks 4th in Volume terms, 13th in Value terms & 8th in Manufacturing capabilities terms in the world
Growth opportunities : CRAMS (Contract Research and Manufacturing Services) and Clinical Research & Generics
Business Segments : Biotechnology, Formulations, Bulk Drugs & CRO’s
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Biotechnology Industry
Biotechnology Industry
Indian Biotechnology opportunity
Global Biotechnology market estimated at US$ 46 bn plus
Indian Biotechnology industry share in global markets is just 1.5%
In terms of no. of Biotechnology companies India ranks 11th in the World and 3rd in Asia pacific
Growth opportunities : Contract R&D, Contract Manufacturing, Technology Transfer and Clinical Trails
Business Segments : Biopharmaceuticals, Bioagriculture, Bioinformatics, Bioscience and Bioindustry
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Textile Industry
Textile Industry
Indian Textile Industry opportunity
Global Textile and apparel trade is estimated to be US $ 450 bn
Indian textile industry is growing at 20% and accounts for 4% of India’s GDP
India is the third largest producer of cotton`
Major player in the home textile segment
Indian industry estimated at US$ 46 bn with exports of US$ 16 bn
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www.sme.icicibank.comwww.sme.icicibank.com
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Safe HarbourExcept for the historical information contained herein, statements in this Release which contain words or phrases such as 'will', 'would', ‘indicating’, ‘expected to’ etc., and similar expressions or variations of such expressions may constitute 'forward-looking statements'. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to our ability to successfully implement our strategy, future levels of non-performing loans, our growth and expansion in business, the adequacy of our allowance for credit losses, technological implementation and changes, the actual growth in demand for banking products and services, investment income, cash flow projections, our exposure to market risks as well as other risks detailed in the reports filed by us with the United States Securities and Exchange Commission. ICICI Bank undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof.
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Thank you…
For any further queries, you can reach me on:Mobile - +919870101780Email – sanjeev.matri@icicibank.com
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FY1991(%)
Sectoral share of GDP (%)
32 Agriculture
25 Industry
43 Services
GDP Growth in 2006 (%)
3.9
7.6
10.3
GDP 8.4
Source: RBI,CSO
Structural shift in economy with renewed growth across all sectors
FY2006(%)
21
19
60
Sublimating India’s knowledge capital to create economic value
AgricultureAgriculture IndustryIndustry ServiceService
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Services sector driving momentum
Accounts for over 60% of GDP Accounts for over 60% of GDP
Leveraging rich pool of human capital Quality educational institutions
Large English speaking population
Knowledge sectors earnings of US$12.9bn: Pharmaceuticals, Biotechnology, Engineering design
Growth in financial services, travel & hospitality
Back
Software exports of US$ 23.6 bn in FY2006
International IT services hub
Global back office
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Resurgence of industrial sector
Expansion of Indian industry to global marketsGrowing export orientation – 25% growth in
FY2006Setting up international marketing and distribution
networksAcquiring/ creating production capacities overseasPotential for acquisition/ project financing and
trade finance
Expansion of Indian industry to global marketsGrowing export orientation – 25% growth in
FY2006Setting up international marketing and distribution
networksAcquiring/ creating production capacities overseasPotential for acquisition/ project financing and
trade finance
Back
Buoyancy in credit demand from industrial and infrastructure sector across large corporate as well as SME space
Buoyancy in credit demand from industrial and infrastructure sector across large corporate as well as SME space
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7
23
35
35
>60
35-59
15-34
0-14
10
30
35
25
23
36
26
16
8
26
37
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Demographic advantage - BRIC
58% of the population is in the age group of 15-59 years. By 2015 most of the countries will witness gradual shift in labour arbitrage except India due to
continuous addition of young skilled work force.
(Age group
)
(percentage of population)
India ChinaRussi
aBrazil
Back
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Upward migration of incomes
FY1996 FY2002
Middle income
High income
33 50
1 3
Rising affluence and growth of the consuming classNCAER data for top 24 cities in India shows
migration to higher income levels growing at over 40% per annum
FY2010Estimat
e
98
10
(households in million)
Middle income US$ 2000 - 11000 per household p.a. High income > US$ 11000 per household p.a.
Back
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Auto ancillariesIndustry
Auto ancillariesIndustry
Indian Auto ancillaries industry opportunity
India's Strengths
•Strong Engineering Skills
•Emerging Culture of Cost competitiveness
•Technically Skilled Manpower leading to labour price arbitrage
“US based Auto Vendors can potentially increase ROS by 3%-6% by shifting manufacturing to India” Mckinsey Report
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Auto ancillariesIndustry
Auto ancillariesIndustry
Indian Auto ancillaries industry opportunity
Who's Outsourcing to Indian SME?
Large OEMs…
•GM,US-global purchase team
•Volvo-Global buying Team
•Ford – full fledged sourcing team
•Honda
•Toyota-hub for transmissions
•Caterpillar – global purchase team
•John Deere
•Piaggio
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