Rs 40Kcr divestment target stretched but achievable: ICICI

ICICI Bank head Chanda Kochhar sees no visible signs of investment cycle picking up in the near-future.  The investment cycle in India has seen a sharp slowdown. Investors have seen opportunity in India but they are seeking more clarity on the policy and approval front before making investments. According to Kochhar, India can grow at 6.5 percent if investment cycle restarts.

Commenting on the recent Union Budget 2013-14 announcements, Kochhar says, she feels the finance ministry has struck a note of confidence with foreign investors. Foreign money has been jittery of entering Indian shores on the back of lethargic decision-making of the government. However, in a bid to change the UPA II’s image, Chidambaram conducted several road shows for the FII community.

FM said in a recent interaction on a Google Hangout session that each divestment has been a success from the time he has taken over. He reiterated that divestment is work in process, and the first divestment will happen in April. He was also confident of meeting divestment target of Rs 40,000 crore laid out in the Budget, adding “there is a definite game plan”.

Kochhar says the Rs 40,000 crore figure looks a bit stretched but “achievable”.

Shifting focus to her sector, Kochhar says, there no appropriate opportunities for consolidation in the banking. She feels banking in India is not an easy business. “The RBI licence guidelines are very comprehensive,” she told CNBC-TV18 adding, expect initial price war when new banks are launched.

Below is the edited transcript of her interview to CNBC-TV18.

Q: How do you think the rating agencies perceive India and whether we are up for an upgrade as the FM believes that we should be?

A: The achievement of fiscal deficit target for the year is a huge positive in the minds of the credit rating agencies. It in a way then inspires confidence that having achieved 5.2 percent, 4.8 percent looks achievable. So I think that's one big positive factor because of which we would avoid a downgrade. To get to upgrade stage, they are clearly going to watch us.

Q: What's the in-house assessment of what we can expect in terms of rate cut?

A: We expect another 50-75 bps rate cut in coming fiscal year.