Kotak Bank boosts infra loans with CVs and construction equipment

04 Dec 2023 CW Team

Amit Mohan, President ? Logistics and Infrastructure at Kotak Mahindra Bank, highlighted the positive impact of the overall macroeconomic environment and the government's focus on infrastructure on the demand for construction equipment and commercial vehicles. He mentioned, ?The demand for loans for commercial vehicles and construction equipment has been significantly boosted." He further expressed confidence in maintaining the growth momentum, stating, ?Our construction equipment and commercial vehicle advances grew by 26 percent in the first half, and we expect to maintain growth momentum in the second half.?

As of September 30, out of the total Rs 310 billion loan book, the share of commercial vehicle advances stands at nearly Rs 175 billion, construction equipment loans account for Rs 75 billion, and the remaining portion comprises working capital loans.

Kotak Mahindra Bank has outpaced industry growth in expanding its loan book. Mohan provided insights into the specific growth rates, stating, ?The commercial vehicle industry, in terms of the number of units sold, has grown by 3% in the first half, but our commercial vehicle retail financing has grown 29% in the first half.? He also noted, ?Construction equipment as an industry has grown by 20% in the first half while our equipment financing has grown by 22%.?

The demand for commercial vehicles, particularly goods carriers, is arising from sectors such as cement, steel, mining, FMCG (Fast Moving Consumer Goods), and real estate. Additionally, the demand for passenger vehicles is driven by factors like increasing tourism activities, rising inter-state travel, and the gradual return of employees to offices as companies transition away from remote work for their workforce.

In the second half of the current fiscal, infrastructure financing for Kotak Mahindra Bank is expected to be propelled by the increasing demand for Commercial Vehicles (CVs) and construction equipment. The bank achieved a 26% growth in its construction equipment and commercial vehicle advances, reaching Rs 310 billion by the end of the first half, and it aims to sustain this growth in the subsequent period. Amit Mohan, President ? Logistics and Infrastructure at Kotak Mahindra Bank, highlighted the positive impact of the overall macroeconomic environment and the government's focus on infrastructure on the demand for construction equipment and commercial vehicles. He mentioned, ?The demand for loans for commercial vehicles and construction equipment has been significantly boosted. He further expressed confidence in maintaining the growth momentum, stating, ?Our construction equipment and commercial vehicle advances grew by 26 percent in the first half, and we expect to maintain growth momentum in the second half.? As of September 30, out of the total Rs 310 billion loan book, the share of commercial vehicle advances stands at nearly Rs 175 billion, construction equipment loans account for Rs 75 billion, and the remaining portion comprises working capital loans. Kotak Mahindra Bank has outpaced industry growth in expanding its loan book. Mohan provided insights into the specific growth rates, stating, ?The commercial vehicle industry, in terms of the number of units sold, has grown by 3% in the first half, but our commercial vehicle retail financing has grown 29% in the first half.? He also noted, ?Construction equipment as an industry has grown by 20% in the first half while our equipment financing has grown by 22%.? The demand for commercial vehicles, particularly goods carriers, is arising from sectors such as cement, steel, mining, FMCG (Fast Moving Consumer Goods), and real estate. Additionally, the demand for passenger vehicles is driven by factors like increasing tourism activities, rising inter-state travel, and the gradual return of employees to offices as companies transition away from remote work for their workforce.