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| Shyam Maheshwari , Founder and Partner of SSG |
Shyam Maheshwari is a
Founder and Partner at ARES SSG. He is also an Associate Member at The
Institute of Chartered Accountants of India and on the board of various
companies. Previously, Shyam Maheshwari served as a Senior Member of the Lehman
Brothers Asia Special Situations Group primarily responsible for making
principal investments in India, where he oversaw the efforts to build the Indian
business and initiated pan-Asian ventures in mining and power assets with a
focus on Indonesia.
According to Shyam Maheshwari, as India’s pandemic battered businesses
and economy emerge into a still uncertain next normal, there is an increasing
focus on private credit as a fuel to drive business expansion and sustainable
long-term growth. This along with traditional lenders such as banks especially
PSU banks which have done Yeoman Service for the country during the
difficulties of 2020 will be facing greater pressure in 2021 and beyond.
Shyam Maheshwari describes
the Indian credit market and how it is dominated by private lenders. The Indian
credit market has been dominated by banks and non-bank financial companies for
a long period. It started with the primary dominance of PSU banks then the
private sector banks came along. Still,
the credit to GDP ratio is relatively modest and low for the stage of growth of
the country. As the economy develops
credit intensity would probably increase initially and the need for credit is
very much out there. The challenges the banks and non-banks as you have rightly
pointed out may not be able to fulfil that requirement and that’s where the
private credit demand is extremely apparent and necessary for the growth, says
Shyam Maheshwari SSG.
Shyam Maheshwari thinks
that taking what he said on the flexibility, also emanates from the regulated
players which have been dominating the market for a long time whether it is a
bank or a non-bank. One is regulated and the second is leveraged. The leverage
platforms have certain constraints which were shown when IFS has happened in
terms of whether it is LLM or it is provisioning norms. Shyam Maheswari points
out that there is creditor protection which is increasing and improving over
time. He affirms that the access to the market remains open and is undergoing
improvement but still a lot could be done. “It is pretty encouraging to see the
signs that it has been opening up in the last decade or so”, says Shyam
Maheshwari.
Shyam Maheshwari also
points out that there had been certain comfort for the investors from the
global perspective because there is an IBC process in place. Creditor
protection is increasing and improving over time. He also identifies that the
access to the market remains open and improving. A lot could be done in the form
of access, which is currently only available to the foreign participant in form
of either ECB in dollar terms or in rupee bond market which has certain nuances
and constraints at this point. However,
Shyam Maheshwari is excited that it is pretty encouraging to see the signs that
has been opening up in the last decade or so.
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