In an interview with Insights Success, Nagaraj Garla, CEO of IDBI Capital Markets & Securities Limited gave some insightful answers highlighting the influences made by his company to take IDBI Capital to a new level.
- Kindly brief us about your company.
IDBI Capital Markets & Securities Limited is a wholly owned subsidiary of IDBI Bank Limited and offers to its clients a bouquet of financial services. Broadly IDBI Capital provides services in three major areas – Investment Banking, Institutional and Retail Broking and Portfolio Management Services.
- Please tell us something about your Founder/CEO and his/her contribution towards the company and the industry.
IDBI Capital is a wholly owned subsidiary of IDBI Bank Limited. IDBI Bank Ltd. has inherited a rich legacy from its predecessor entity – Industrial Development Bank of India – which was an apex Development Financial Institution (DFI) in the realm of industry from July 1, 1964 to September 30, 2004. As a DFI, the erstwhile IDBI stretched its canvas beyond mere project financing to cover an array of services that contributed towards balanced geographical spread of industries, development of identified backward areas, emergence of a new spirit of enterprise and evolution of a deep and vibrant capital market.
On October 1, 2004, the erstwhile IDBI was converted into a banking company – IDBI Ltd. – to undertake the entire gamut of banking activities while continuing to play its secular DFI role. IDBI Bank Ltd., as a full service universal bank, provides a wide gamut of financial products and services encompassing deposits, loans, payment services and investment solutions.
IDBI Capital is spearheaded by our young and multi talented CEO Mr. Nagaraj Garla. Mr. Garla has over 2.5 decades of experience in banking & finance spanning across different verticals like Corporate Banking, Retail Banking, MSME, Agri and Rural Credit, Trade Finance and International Banking Operations, Remedial Management and Stressed Assets and Investment Banking. Mr. Garla’s competencies include building strategies, framing business plans and successfully implementing result oriented strategies for achieving targeted growth. At IDBI Capital, Mr. Garla has contributed in scaling up overall business of the Company. The company has registered a growth rate of over 30% in respect of top line as well as bottom line as against negative growth of over 30% during the last 3 years. Mr. Garla has played an active role in digital initiatives of the company including creation of separate mobile application IDBI direct and complete digital platform for account acquisition across various channels.
Under the leadership of Mr. Garla, IDBI Capital has bagged the Award for “Best Investment Banking & Securities Services Company, 2017” from International Brand Consulting Corporation (IBC), USA, the “Financial Services Brand of the Decade – 2018” by Herald Global – ERTC Media; “Asia’s Dream Company to work for – Financial Services” by World HRD Congress and “Asia’s Most Trusted Company Award” by IBC (USA) and has also been assessed as the “Most Improved Broking House-2017” by Asia Money.
- How emerging technologies are changing the portfolio and wealth management industry?
Technological tool such as Robo advisory is expected to take off in mid market segment of wealth management where client is seeking a larger bouquet of products with lower fees. The key differentiation here will be financial advice at reasonable cost. However at high end of the market, it will be relationship and product driven.
Technology will also play an important role in terms of providing complex products & strategies to this affluent class effectively.
Another important role that emerging technological tools will play is offering number of product innovations.
Having said this, the crux of Wealth management business is people – relationship managers, that cannot be ignored at all irrespective of any kind of technological enhancements.
- How new economic and taxation policies of Govt. and the global trade scenario are transforming the portfolio and wealth management industry?
With liberal economic policies & reforms that the government has undertaken over last few years, the rise in entrepreneurship is expected to raise India to the third largest number of billionaires in five to seven years as per some market reports. E.g. the acquisition of Flipkart by US based retail giant Walmart has created hundreds of millionaires. Such buyouts are music to the portfolio & wealth management industry.
The recent initiative like demonetization drove millionaires further away from physical assets into financial assets. Such kind of reforms has only helped the industry to channelize the investible surplus in organized manner. In today’s dynamic world of global & domestic economic environment, the job of Wealth Manager/portfolio manager becomes more important to provide right asset allocation to clients to optimize the returns. The Startup India Stand up India initiative of the Government is also likely to create more entrepreneurs.
- Explain the industry challenges in terms of current trends?
The main challenge in wealth management industry is quality & maturity of relationship/portfolio manager. People with sincere approach to handhold the clients in their journey of wealth creation as well as wealth preservation, instead of looking short term objective of revenue maximization is the need of the hour. Since it is people centric industry, retaining good talent of wealth managers/portfolio managers is very important criterion.
The markets conditions have thrust negative returns upon most Portfolio Managers. Attracting investments at this point of time, although it is the best time for investing is a challenge.
- What are the unique factors of your company? Explain in brief the purpose behind starting and the success story of your company?
The USP of the IDBI Capital is provision of varied services under one roof backed by the IDBI Brand that endorses its credibility and trustworthiness.
The Company provides capital market services, M&A and PE, syndication and advisory services for resolution of stressed assets.
The Company had an experience of handling more corporate debt restructuring mandates of approximately Rs. 2 lakh crores. The Company recently launched the Retail PMS to focus on IDBI Bank Retail Customers.
- Kindly describe about the products and services of your company.
In the Investment Banking space, we provide services in Capital Market transactions, M&A and PE and syndication of debt. On the Institutional front IDBI Capital is empaneled with leading Institutions as a preferred broker. We also service a vast network of retail and HNI customers. IDBI Capital also has a strong research team which has a coverage of varied sectors. We have alliances with leading banks to extend the reach of our broking services across India.
IDBI Capital recently launched PMs product IDBI Focus 20:20 strategy. It is targeted to cater to HNI/UHNI clients to generate superior returns over medium to long term by identifying and investing in quality companies with good management track record, fair valuations with reasonable margin of safety.
- What are the future challenges in your industry and how are you preparing the company for that?
– Competition from the organized and unorganized players is a challenge. To remain prepared to face competition we continue to focus on large deals with a value proposition
– Technology obsolescence is a major challenge. However rather than view it as a threat or challenge we look at it as an opportunity for advancement and continue to innovate and focus on digital upgradation. We provide a platform which serves differentiated customer experiences
– Providing advisory services without funding/cutting a cheque is also a challenge.
However we have diversified our business sufficiently and our also in the process of launching the Defence and Aerospace Fund.
- Kindly provide a quote which describes your company in the best way.
I find the great thing in this world is not so much where we stand, as in what direction we are moving:
To reach the port of heaven, we must sail sometimes with the wind and sometimes against it – but we must sail, and not drift, nor lie at anchor.
-Oliver Wendell Holmes, Sr.
