Devendra Kumar Vyas, MD - Srei Equipment Finance Limited
The infrastructure and real estate sectors have been experiencing tough times and the scenario is likely to remain grim till the overall health scenario improves. However, the long-term story of the sector remains intact as the Government is committed to building a world-class infrastructure in the country. This is evident from its initiative of setting up NIP - the national infrastructure pipeline of projects - involving investments of Rs. 111 trillion over five years up to 2025. The green shoots of recovery can already be seen in various equipment classes such as the backhoe loader that has grown by 32% y-o-y in Jul’20 and by 10% over the previous month.
The rental and leasing market offers a key opportunity; leasing penetration is expected to improve from 3% to 10%.
CE industry forms ~20% of a project cost, and in times like these, every contractor is looking to reduce its project cost. Hence, we are observing a shift in consumer behavior - from owning equipment to renting equipment - to save capital. The rental and leasing market will therefore be a key opportunity for the industry. The leasing penetration of India is expected to improve from 3% to 10%. The rental business releases plenty of capital in the system, and going forward, the industry needs to capitalize on rental opportunities.
Another important focus point for this year would be on used equipment because there are a lot of resources which are under-utilized and lying in different pockets. So, people would like to own that equipment as it will reduce their cost of acquiring new equipment.
Financial institutions on the other hand are de-risking their balance sheets through co-lending partnerships with banks. The co-lending model attempts to leverage the reach and distribution capabilities of NBFCs and low-cost funds of the banking industry in order to service the priority sector.
Postponing bauma CONEXPO INDIA to 2021 is in the best interests of the exhibitors and visitors as it will give them more time and resources to participate.
Covid has deeply impacted the human force as well as the economies across the globe. In these unprecedented times, the decision to postpone bauma CONEXPO INDIA to 2021 is in the best interests of the exhibitors and visitors as it will give time and resources to enable exhibitors to participate in the 2021 edition and visitors from across the country can participate in the trade fair without any complications.
