2020 would be the ‘Year of Leasing’ says DK Vyas, Managing Director, SREI Equipment Finance
Reviewing the year 2019
For Construction Equipment, 2019 was a mixed bag. The market and economic uncertainties led to a sector de-growth of 25-30 per cent. Adding to this was the occurrence of natural calamities like floods in numerous parts of the county that further hindered the process of infrastructural development. However, with the Government’s increased focus on infrastructure as an epicenter of its growth agenda, and with numerous big-ticket projects being planned and streamlined, the future looks promising for the sector as a whole.
Opportunities created by industry trade-fairs like Excon
Excon is a promising event benefitting the construction equipment and allied sectors. Such events help the industry stakeholders to explore and identify new customers, and also get a better understanding the current market sentiments.
Attractions brought to the Excon 2019 platform
In Excon 2019 we focused on promoting our co-lending offerings - supported by our partner banks. The other offering we promoted was our leasing product. Personally, I feel that the year 2020 would be the ‘Year for Leasing’. The mindsets of the customers are changing and they are focusing on affordability rather than the ownership. Leasing is better than buying because of the many benefits it offers. Leasing in India has suffered a lot due to the multiplicity of the taxes imposed in the earlier tax regimes, and had to face its share of ups and downs. However, with the policies becoming more stable and clarity being attained, we believe that the year would be beneficial for leasing opportunities.
On the Co-Lending process
We have always believed in creating new innovative solutions for our customers while enabling them to grow exponentially. The co-lending partnerships are a part of this endeavour as we believe that the combined reach and resources of an NBFC and a Bank would enable customers not just to benefit novel finance solutions but also experience an array of new age banking products. Under co-lending, up to 80 per cent of the customers need is financed by our partner banks and the rest by us. The process is effective in creating liquidity as well as lowering the cost of operations - thereby creating a better value proposition for our customers. The tie-ups are a win-win proposition for our bank partners as well as it gives them an opportunity to participate in a segment with high growth potential, and also leverage on our long standing industry understanding and partnerships with manufacturers.
About Non-Convertible Debentures (NCDs)
Non-Convertible Debentures (NCDs) are an effective way of diversifying your funding requirement and reducing dependence on bank funding.
If one is looking for an investment that generates fixed income periodically, NCDs may be an ideal investment as it offers:
• Higher rate of interest as compared to fixed deposits, postal savings or similar investments
• Liquidity - if the bonds are listed, as one can sell it in the secondary market before its maturity
• Possibility of capital appreciation i.e. one can sell your bond at a price higher than your cost price in the market
NCDs thus can be regarded as an ideal tool for resource mobilisation.
@EPC World Media