We do have banking ambitions, says Incred Group's Bhupinder Singh

The Incred Group has been in the headlines for its merger with KKR India Financial Services, and it has also been on an acquisition spree. Former Deutsche Bank’s co-chief executive Anshu Jain is a backer; and others include Investcorp, Paragon Partners, Elevar Equity and Manipal Group chief Ranjan Pai. BHUPINDER SINGH, the shadow banking entity’s founder and chief executive officer, spoke to Raghu Mohan. Edited excerpts:

You have been acquisitive of late with Qbera, Vishuddha, and the MAPE Advisory Group. What are your plans on the inorganic and organic front?

The InCred Group comprises two distinct businesses — InCred Finance which is our tech and analytics-based new-age NBFC; and InCred Capital which is our integrated institutional, wealth management and asset management platform. And while there is no specific focus given to inorganic growth, we are always open to looking at opportunities. Each of the acquisitions we’ve made has contributed meaningfully to the overall InCred story.

Qbera provided a boost to our direct consumer lending business in InCred Finance; Vishuddha served as a good base to launch our equity portfolio management services and alternative investment fund businesses, while MAPE has been at the core of our i-banking expansion. In addition, we have also built out our debt trading and equities capabilities within InCred Capital.

Regardless of our growth strategy — whether organic or inorganic — I care most deeply about the robustness of that growth. To that extent, the softer aspects of team cohesion, an agreement of shared vision, a common passion to build something unique, and yet very large have been central to all our growth decisions, especially the inorganic ones.

During these uncertain times, would it not be a better strategy to preserve capital rather than chase growth?

There is no doubt that 2020 and 2021 have been the most challenging years in a very long time for the entire world. Precious lives have been lost and people have seen jobs and economic growth disappear. Our primary focus at a time like this has been on the well-being of our employees and our customers. However, this has also been a period which has thrown up some very interesting investment opportunities which can be particularly attractive from a long-term value standpoint.

With the kind of build-out InCred has done with so many acquisitions, don’t you run the risk of becoming unwieldy?

The short answer is “no.” I think it’s very important to highlight that while we have made a number of acquisitions, all these put together would contribute less than 10 per cent to the overall InCred story today. The vast majority of the growth across our business lines has happened organically. 

What kind of a non-banking financial company (NBFC) will Incred morph into? 

Our lending business, InCred Finance, continues to grow from strength to strength. We have seen healthy growth rates across all aspects of that business, with a strong risk metric, and we will continue on this growth trajectory over the coming years. I would anticipate that the business will have reached a scale where it becomes appropriate to list it on the bourses in the next two to three years. Our focus in this business will continue to be in retail and small business lending.

InCred Capital is a huge focus area for me personally, particularly the wealth management side, where we have very large ambitions for growth. I see this being primarily driven by our domestic wealth business, but also anticipate strong contributions from our global non-resident Indian franchise. We have just gone live with our first international wealth unit in Dubai, and are in the process of launching in Singapore as well in the months to come. These international wealth centres together with our core domestic wealth engine will enable us to cater to not only all local wealth customers in India, but also the global Indian community.

What is in fact the status of the merger of InCred Finance with KKR India’s NBFC arm?

We have had some very friendly and constructive discussions with KKR over the last few months and are now in the final stages of the process. We will look to conclude this soon once the relevant regulatory approvals are in place.

Is there a banking ambition at play in the background?

I think the answer is a “no” until we get to a certain scale. Once we achieve a critical level of scale, it becomes a very viable and possibly even a desirable option, as access to a stable retail deposit base can play a very beneficial role in our asset-liability management strategy. More broadly, for an Integrated Financial Institution like ours, a mainstream banking licence would be the most natural way to fully participate in the upside growth potential of a country as big as ours.