The Indian financial services sector has been enjoying a natural growth momentum even as the economy swung from highs and lows of global crises over the past decade. Not surprisingly, it has been one of the favourite sectors for private investors to bet on and has generated alpha for almost every PE firm that has built an exposure to the sector.
The financial services sector has attracted over $40 billion of private equity money over the last two decades, accounting for around a sixth of total private investments in the country, according to VCCEdge, the data research platform of Mosaic Digital. It received more than $4 billion in the past 12 months alone and was voted as the favourite sector by top PE executives in the VCCircle annual survey for 2019.
However, the sector has been in the midst of high turbulence over the last two years. While banks were laden with bad loans, non-banking financial companies (NBFCs) were seen as a big opportunity. But over the past 12 months the narrative has changed, with the bank NPA problem being overshadowed by the liquidity issues of NBFCs and apprehensions about the country’s shadow banking system at large.
There have also been disappointments about some emerging segments like payments bank. And even though fintech has become the new mascot of opportunity in the sector, it is yet to create winners who have shown they can conquer more than one or two verticals while building a scalable sustainable venture.
Nevertheless, the industry has seen a lot of corporate activity across its various branches over the past few months.
To gauge the new opportunities and to get a reality check on the issues that are holding back the sector from gathering speed, Mosaic Digital, the corporate banner behind VCCircle, is organising its next edition of FinServ Summit at Hotel ITC Maratha in Mumbai on 28th August, 2019.