sme in indian market

SME Opportunity in Indian Markets

2

Agenda

Overview – ICICI Bank

Emergence of Indian Economy

SME Opportunity - India

3

Agenda




4

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

5

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

6

ICICI Bank - growth horizons

Retail & SME banking

Rural banking

Internationalbanking

…with continuing focus on the corporate banking and building SME franchise

7

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

8

Agenda




9

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

10

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.

11

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

12

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)

13

Agenda




Play film

14

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

15

Textiles

Auto Ancillaries

Retail trade

Infrastructure Pharmaceuticals

Engineering

Logistics Travel & TourismSoftware & IT services

Growth opportunities in India

16

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

17

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

18

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

19

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

20

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

21

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

22

www.sme.icicibank.comwww.sme.icicibank.com

23

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.

24

Thank you…

For any further queries, you can reach me on:Mobile - +919870101780Email – [email protected]

25

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

26

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

27

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

28

7

23

35

35

>60

35-59

15-34

0-14

10

30

35

25

23

36

26

16

8

26

37

29

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

29

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

30




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

31




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

Next

sme in indian market

Documents

Transcript of sme in indian market