Hitting Pause

Dark clouds are gathering around banks and financial companies, the Srivastava constituent sector of the list.

- Samar Srivastava

There’s no gainsaying that India’s financial sector has found its place in the sun: Fourteen of the companies in the Super 50 list come from this space. Still, the steady and rapid rise of these businesses have prompted industry watchers to question if these companies are due for a bit of a pause. Will a rise in interest rates cause loan growth to slow? Will a worsening business environment make more Indians default on their personal loans? Initial signs are pointing to this.

In its recent results conference call, Kotak Mahindra Bank said loans given to small and medium businesses are showing signs of stress. “This pattern that we are seeing has been repeated in a lot of countries when liquidity reverses,” says Saurabh Mukherjea, founder, Marcellus Investment Managers.