 "Vikram Pandit's India JV gets off to a flying start")
The first Indian investment of former Citibank CEO, Vikram Pandit has taken off on an auspicious note. JM Financial Credit Solutions, the joint venture between Pandit and JM Financial, has reported profits of Rs 200 crore for the fiscal 2016 on sales of Rs 520 crore – thus making its mark in the highly competitive wholesale NBFC business.
Pandit, 59, had invested Rs 540 crore in the JV in fiscal 2015 via his Mauritius based fund and owns 49.99 per cent stake in the company while JM Financial holds the rest and runs its operations on a day to day basis. The joint venture focused on real estate financing which include loans against commercial real estate and properties. Analysts said with 96 per cent of the exposure in the commercial real estate segment, JM Financial Credit's assets grew to Rs 4,206 crore in fiscal 2016 as compared to Rs 1,855 crore reported in fiscal 2016.
Pandit is among many Indian origin CEOs who are investing in local financial services businesses after leaving their positions overseas. Apart from Pandit, former Stanchart Asia CEO, Jaspal Bindra has picked up minority stake in Centrum Finance while former Deutsche Bank CEO Anshu Jain and his colleague Bhupinder Singh are partnering to set up a NBFC in India.
Pandit - who quit Citibank as its CEO in 2012 after a disagreement with its board – has continued to invest in India and abroad. In May this year, Pandit and Atairos Group announced that they are creating “Orogen Group” - a new venture to make investments in financial services companies and related businesses. Pandit took over as the Chairman and CEO of the Orogen and serves as a Senior Advisor to Atairos.
Pandit also invested in several other financial startups, including Student Lender, CommonBond, Orchard Platform, which connects investors to online lending platforms, global money transfer service, TransferWise, and MMKT Exchange LLC.
In an interview with this paper, JM Financial MD designate, Vishal Kampani said the group is not in a hurry to start a bank and focus on its core businesses in the near term. The investment by Pandit into JM Financial Credit Solutions had given fuel to speculation that Pandit and the Kampanis would combine their might to launch a bank. With the RBI making the banking license on tap, Kampani said they have enough time to take a call on this as “there is no race or deadline to file the applications.”
The NBFC business is attracting many players in the recent times. Apart from the global biggies, corporate majors, Adani group and Reliance Industries are also planning to get into the business with partners. The Tatas and the Birlas already have a significant presence in the financial services business.