SBI Sees Rs 4 Lakh Cr Credit Demand, Private Capex to Rise
By Rediff Money Desk, New Delhi Sep 24, 2024 16:13
SBI Chairman C S Setty expects private capital expenditure to pick up in the second half of FY24, driven by a strong Rs 4 lakh crore credit pipeline. The bank also sees renewed government spending.
New Delhi, Sep 24 (PTI) SBI Chairman C S Setty has said the bank has already got Rs 4 lakh crore strong credit pipeline from India Inc and expressed hope that capital expenditure by the private sector is expected to pick up in the second half of the fiscal year.
"We see a good amount of interest in private capital expenditure. The infrastructure financing, of course, is mainly coming from the roads, renewable energy, and some of the refineries," he told PTI in an interview.
As far as public spending is concerned, Finance Minister Nirmala Sitharaman in the Budget proposed to raise the capital expenditure target by 11.1 per cent to record Rs 11.11 lakh crore for 2024-25. This is 3.4 per cent of the country's GDP.
Setty said some of the corporates had undertaken brownfield expansion for which the capital expenditure was funded by their own cash accruals and cash balances that they had.
However, he said, "We now see some of the corporates drawing the term loans for brownfield expansion too."
"We have a pipeline, both in terms of sanctioned but not disbursed and a pipeline of proposals which are under process. This amounts to almost Rs 4 lakh crore, indicating that the corporate pipeline is strong," he said.
Stressing that the private capital expenditure definitely will pick up during the year, he said, there is renewed government expenditure after the first quarter slowdown due to general elections.
"We see in the second quarter, as well as in the second half of the current financial year, both capital expenditure will be spurred by the government expenditure as well as private expenditure," he said.
On monetisation of SBI's stake in some of its subsidiaries, Setty said, there was no thinking in terms of divestment of stake of any of the subsidiaries presently.
"If these subsidiaries require (growth) capital, we will definitely examine," he said.
At this point in time, he said none of the large subsidiaries require capital from the parent to scale up their operations.
The bank in the 2023-24 fiscal year infused an additional capital of Rs 489.67 crore in SBI General Insurance Company Ltd.
The company has also allotted ESOP to employees and consequently, the bank's stake has decreased marginally from 69.95 per cent to 69.11 per cent.
Setty also said the Reserve Bank of India is unlikely to ease the benchmark policy rate during 2024 given the uncertainty over food inflation.
The US Federal Reserve's first cut in interest rate in more than four years of 50 basis points took place last week, triggering central banks in other economies to follow suit. The decision lowers the federal funds rate to a range of 4.75-5 per cent.
"We see a good amount of interest in private capital expenditure. The infrastructure financing, of course, is mainly coming from the roads, renewable energy, and some of the refineries," he told PTI in an interview.
As far as public spending is concerned, Finance Minister Nirmala Sitharaman in the Budget proposed to raise the capital expenditure target by 11.1 per cent to record Rs 11.11 lakh crore for 2024-25. This is 3.4 per cent of the country's GDP.
Setty said some of the corporates had undertaken brownfield expansion for which the capital expenditure was funded by their own cash accruals and cash balances that they had.
However, he said, "We now see some of the corporates drawing the term loans for brownfield expansion too."
"We have a pipeline, both in terms of sanctioned but not disbursed and a pipeline of proposals which are under process. This amounts to almost Rs 4 lakh crore, indicating that the corporate pipeline is strong," he said.
Stressing that the private capital expenditure definitely will pick up during the year, he said, there is renewed government expenditure after the first quarter slowdown due to general elections.
"We see in the second quarter, as well as in the second half of the current financial year, both capital expenditure will be spurred by the government expenditure as well as private expenditure," he said.
On monetisation of SBI's stake in some of its subsidiaries, Setty said, there was no thinking in terms of divestment of stake of any of the subsidiaries presently.
"If these subsidiaries require (growth) capital, we will definitely examine," he said.
At this point in time, he said none of the large subsidiaries require capital from the parent to scale up their operations.
The bank in the 2023-24 fiscal year infused an additional capital of Rs 489.67 crore in SBI General Insurance Company Ltd.
The company has also allotted ESOP to employees and consequently, the bank's stake has decreased marginally from 69.95 per cent to 69.11 per cent.
Setty also said the Reserve Bank of India is unlikely to ease the benchmark policy rate during 2024 given the uncertainty over food inflation.
The US Federal Reserve's first cut in interest rate in more than four years of 50 basis points took place last week, triggering central banks in other economies to follow suit. The decision lowers the federal funds rate to a range of 4.75-5 per cent.
Source: PTI
Read More On:
DISCLAIMER - This article is from a syndicated feed. The original source is responsible for accuracy, views & content ownership. Views expressed may not reflect those of rediff.com India Limited.
You May Like To Read
TODAY'S MOST TRADED COMPANIES
- Company Name
- Price
- Volume
- Vodafone Idea L
- 10.41 (+ 0.48)
- 53727067
- GTL Infrastructure
- 2.41 (+ 4.78)
- 49996392
- Five-Star Business F
- 797.20 ( -1.39)
- 47756593
- Spicejet Ltd.
- 61.84 ( -0.87)
- 37121295
- Reliance Power L
- 44.16 (+ 4.99)
- 36538149
MORE NEWS
Gulf Oil Promoter Sells 4% Stake for Rs 263 Crore
Gulf Oil International Mauritius Inc. sold a 4% stake in Gulf Oil Lubricants India for...
Zaggle Acquires Stakes in Span Across IT &...
Fintech firm Zaggle invests Rs 48 crore in Span Across IT Solutions and Mobileware...
Swiggy Files Updated IPO Papers: Eyes Rs 3,750 Cr
Swiggy files updated IPO papers with Sebi, aiming to raise Rs 3,750 crore through fresh...