You are on page 1of 31

SME Opportunity in Indian Markets

Agenda

Overview – ICICI Bank

Emergence of Indian Economy

SME Opportunity - India

2
Agenda

Overview – ICICI Bank

Emergence of Indian Economy

SME Opportunity - India

3
ICICI Bank – New face of Indian Private
Sector Banking

Globally held
Assets of US $ (ADR, FII &
56.3 bn Second NRI's own
largest Bank 73.9% stake )
in India -
Technology
Leader
Largest First Indian
Private sector Bank to be
Bank in India listed on NYSE

4
Our international franchise
Russia
UK
Canada Antwer China
USA p1
UAE Bangladesh
India Hong
Bahrai Singapore
OBU Kong
n Sri Lanka
Thailan
Malaysi
d
a Indonesia

South Africa
Branch
Subsidiar
y
Representative
Office

1. Branch of ICICI Bank UK


5
ICICI Bank - growth horizons
…with continuing focus
on the corporate banking
and building SME Rural
franchise banking

International
banking
Retail & SME
banking

6
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

7
Agenda

Overview – ICICI Bank

Emergence of Indian Economy

SME Opportunity - India

8
Emergence of Indian Economy - I
Mid
Mid-90's
-90'seconomic
economic
liberalisation
liberalisation
Pre-
Pre-90's
90's
landscape
landscape

Opening up of the economy


and reduction in trade barriers

Inward oriented and licensing regime Regulatory and financial sector


reforms
Capitalising on domestic demand
Directed lending and baking for urbanRestructuring to achieve world
rich only class efficiency

9
Emergence of Indian Economy - II
Post
Post2003
2003
Integration
Integrationwith
with
Early global economy
global economy
Early2000's
2000's
belt tightening
belt tightening
phase
phase
Articulation of international
competitiveness

Exposure to global forces


Indian economy gearing up for post
GATT / WTO scenario Increasing deployment of
Accessing global markets for funds technology
raising and exports
Indian SMEs were re-aligning
Improving quality standards
and looking for pro-active
India's recognition in i.e. intellectual support for its financing needs.
capital, skilled labour and raw
materials

10
Key economic growth drivers
Continued
expansion of
services
sector
Sustaining
Upward GDP Resurgent
migration of growth industrial
incomes rate of sector
above 8%

Demographic
forces

…growing
…growing international
international linkages
linkages giving
giving impetus
impetus to
to all
all
sectors
sectors of
of the
the economy
economy

11
Buoyant investment & financial markets
Equity Markets
Among best performing markets in the world
NSE and BSE ranked 3rd and 5th in no. of transactions
globally*

Foreign Institutional Foreign Direct


Investmen
Investor Investment
t led
Increased by 281% from from Increased by 178% from
FY2000 levels to US$ 11.53 growth from FY2000 levels to US$
bn in FY2006# 5.97 bn in FY2006#

Bank Credit
Bank credit grew by 35% in FY2006

*NSE (National Stock Exchange) and BSE (Bombay


Stock Exchange)

12
Agenda

Overview – ICICI Bank

Emergence of Indian Economy

SME Opportunity - India


Play film

13
Indian SME Opportunity
95%
95%of
ofall
allindustrial
industrialunits
units

40%
40%of
ofindustrial
industrialoutput
output

SME
SME Sector
Sector in
in
India
India 70%
70%of
ofindustrial
industrialemployment
employment
accounts
accounts for
for
35
35%
%of
ofexports
exports

Prime
Primedriver
driverof
ofnew
new
employment
employment
SME sector is vital
to the Indian
economy
Source: SIDBI Report

14
Growth opportunities in India

Auto Ancillaries Infrastructure Pharmaceuticals

Textiles Retail trade Engineering

Software & IT Travel & Tourism


Logistics services

15
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
Auto
Autoancillaries
ancillaries FY15
Industry
Industry
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

16
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

Gems
Gems India has the largest cutting and polishing
&&Jewellery industry
Jewellery
Industry
Industry
Growth opportunities : Manufacturing of Polish
Diamonds and Diamond Jewellery

Low Cost base and design skills is the


competitive edge

17
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%


IT
IT//ITES
ITES per annum and to reach US$65 bn by 2009
(Mckinsey study)
Industry
Industry
Growth opportunities : Software services and
product development, IT Consulting,
Hardware manufacturing

Constant supply of highly qualified pool of


skilled English speaking software engineers

18
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


Pharmaceuticals
Pharmaceuticals Volume terms, 13th in Value terms & 8th in
Industry Manufacturing capabilities terms in the world
Industry
Growth opportunities : CRAMS (Contract
Research and Manufacturing Services) and
Clinical Research & Generics

Business Segments : Biotechnology,


Formulations, Bulk Drugs & CRO’s

19
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


Biotechnology
Biotechnology India ranks 11th in the World and 3rd in Asia
Industry
Industry pacific

Growth opportunities : Contract R&D,


Contract Manufacturing, Technology Transfer
and Clinical Trails

Business Segments : Biopharmaceuticals,


Bioagriculture, Bioinformatics, Bioscience and
Bioindustry

20
Indian Textile Industry opportunity
Global Textile and apparel trade is estimated
to be US $ 450 bn

Indian industry estimated at US$ 46 bn with


exports of US$ 16 bn

Textile Indian textile industry is growing at 20% and


Textile
accounts for 4% of India’s GDP
Industry
Industry

India is the third largest producer of cotton`

Major player in the home textile segment

21
www.sme.icicibank.com

22
Safe Harbour
Except 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.

23
Thank you…

For any further queries, you can reach me on:


Mobile - +919870101780
Email – sanjeev.matri@icicibank.com

24
Structural shift in economy with
renewed growth across all sectors
FY1991 Sectoral
FY2006 GDP Growth
share of
(%) (%) in 2006 (%)
GDP (%)
43 60 Services 10.3

25 19 Industry 7.6

32 21 Agriculture 3.9

GDP 8.4
Sublimating India’s knowledge capital to create economic
value
Agriculture
Agriculture Industry
Industry Service
Service

Source: RBI,CSO
25
Services sector driving momentum

Accounts for over 60% of GDP

Software exports of US$ Knowledge sectors


23.6 bn in FY2006 earnings of US$12.9bn:
Pharmaceuticals,
International IT services Biotechnology, Engineering
hub design
Global back office Growth in financial services,
travel & hospitality

Leveraging rich pool of human capital


 Quality educational institutions
 Large English speaking population

Back

26
Resurgence of industrial sector
Buoyancy in credit demand from industrial and
infrastructure sector across large corporate as
well as SME space

Expansion of Indian industry to global markets


Growing export orientation – 25% growth in
FY2006
Setting up international marketing and distribution
networks
Acquiring/ creating production capacities overseas
Potential for acquisition/ project financing and
trade finance

Back

27
Demographic advantage - BRIC
Russi
India China Brazil
(Age (percentage of
a
group population)
)
>60 7 10 8
23

35-59 23 30 26
36

15-34 35 35 37
26

0-14 35 25 29
16

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.

Back

28
Upward migration of incomes
(households in
million)
FY2010
FY1996 FY2002 Estimat
e
Middle
33 50 98
income
High income 1 3 10

 Rising affluence and growth of the consuming


class
NCAER data for top 24 cities in India shows
migration to higher income levels growing
at over 40% per annum Back
Middle income US$ 2000 - 11000 per
household p.a. High income > US$ 11000
per household p.a.

29
Indian Auto ancillaries industry
opportunity
India's Strengths
•Strong Engineering Skills
•Emerging Culture of Cost competitiveness
•Technically Skilled Manpower leading to
labour price arbitrage
Auto
Autoancillaries
ancillaries
Industry
Industry

“US based Auto Vendors can potentially


increase ROS by 3%-6% by shifting
manufacturing to India” Mckinsey Report

30
Indian Auto ancillaries industry
opportunity
Who's Outsourcing to Indian SME?
Large OEMs…
•GM,US-global purchase team
•Volvo-Global buying Team

Auto •Ford – full fledged sourcing team


Autoancillaries
ancillaries
Industry
Industry •Honda
•Toyota-hub for transmissions
•Caterpillar – global purchase team
•John Deere
•Piaggio

Next
31

You might also like