Tuesday, March 25, 2008

Mackenna’s Gold

Fools may rush in where angels fear to tread. But when it comes to the financial services sector in India, it would be foolish not to jump into the business if you have the brains, the money and the chutzpah. Take the case of the Bajaj group. Soon, a time will come when the fi nancial services arm of the group comprising auto finance and the insurance company Bajaj Allianz will be much bigger than the parent company Bajaj Auto. And why not? Financial services is one of the most lucrative sectors to be in at the moment; with growth prospects appearing absolutely mouth watering. Just a few numbers to convince those who are sceptical about the future. Growing at a compounded rate of 13% ever since private players were allowed entry, the mutual funds market is now worth $ 45 billion; it should cross $ 100 billion by 2012. The insurance market is already worth $ 10 billion and is expected to swell to $ 25 billion by 2010. And by 2015, the market size could well exceed $ 60 billion! Retail banking and consumer finance segments too have been growing at more than 30% a year for the last decade or so. This segment will possibly become a $ 200 billion behemoth by 2012. Ditto with retail brokerage where outfits like India Bulls and Reliance Money are making waves. Is it any surprise then that both Ratan Tata and Kumar Mangalam Birla continue to hanker after this sector despite so many setbacks?

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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