Axis Bank, Kotak, IDBI — Jefferies Optimistic On Indian Financials’ Leadership Shuffle, Foreign Investments Heena Ojha NDTV Profit

The Indian financial sector is undergoing transformations with new CEOs, top management, promoters and shareholders taking charge, Jefferies highlighted in a recent report.

This shift is particularly evident in private banks, insurers, and wealth managers, where senior leadership changes and increased foreign participation are reshaping the landscape.

“Indian financials are seeing a change of face with new CEOs and top management,” Jefferies noted. The report highlights that senior management attrition has been notable, with key figures like KVS Manian, formerly Joint MD at Kotak Bank, moving to Federal Bank as MD and CEO.

This trend has continued with recent retirements and resignations at major institutions such as Axis Bank, Kotak Bank, Standard Chartered Bank India, and Federal Bank.

Jefferies pointed out that “foreign capital is showing strategic interest in Indian financials”, marking the fourth instance of significant foreign investment since 2018.

Recent developments include SMBC’s investment in India, UBS acquiring a 5% stake in 360One, and Emirates NBD nearing a 60% stake acquisition in IDBI Bank. These moves are expected to bring changes in management teams and further foreign capital inflows, the brokerage noted.

The life insurance sector is also seeing shifts, with Allianz ending its partnership with Bajaj to launch new ventures with Jio Financial Services. “Such high-level changes generally lead to investment in retail, digital, and tech platforms,” Jefferies stated, emphasising the potential for higher attrition among senior and mid-management across the industry.

These changes are positive for the sector, according to the brokerage as it cited the infusion of capital, talent, and expertise as beneficial for mid-sized banks and other financial institutions.

“Companies like ICICI Bank and Poonawalla have seen significant rerating under new leaders,” the report added, suggesting that successful transitions could aid in rerating smaller banks currently trading at a discount to larger private banks.

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