India is a jewel in Citigroup’s crown says Ashu Khullar, CEO, Citi India and banking head, Indian subcontinent. Khullar, who took over the Indian operations in August 2019 from Pramit Jhaveri, who is now a director at the Tata Trusts, says the bank has cemented its top slot in businesses such as investment banking, transaction and custody. Khullar who is headed to London shortly to take charge as Co-head, Global Assets Managers, Citibank, says India is one of the best-returning markets for PE investors besides attracting investment from sovereign wealth funds. Edited excerpts.
Tell us a little about your new role as Citibank’s co-head global assets management. Do you have reasons to stay connected with India?
My new role would involve coverage for financial sponsors, infrastructure funds, family offices. It's a broad category of alternate asset managers, and I'll be based in London. What I'm really excited about is it would keep me in touch with India, because I'll be focusing more on EMEA (Europe, Middle East and Africa) and Asia. India has become one of the most vibrant financial sponsor, sovereign wealth fund markets globally. Just in the last two weeks, we've had four major global firms who have celebrated anniversaries (in India). It's been one of the best returning markets for some of the large PE firms, and there are some very strong local players. The multi-exit option is really powerful, apart from the growth and value creation.
You came to India in 2019 to take over the operations. How would you recollect your stint here and your best moments in the country?
It's a real privilege to have had an opportunity to serve and lead this franchise. I started my career in Citibank India. India is a jewel in the crown within the Citi network. My six years have been interesting. It has coincided with a period for India when it really became a major player at the global stage for us to get escape velocity around growth. India has steered the whole macro journey better than most countries. Of course, we went through COVID, which was a big thing across the world. Apart from the bank, we have 30,000 employees who serve global operations. For the entire team to come together to adapt to home as your new office, I am very proud of how my colleagues and the teams dealt with the COVID and continued to serve our clients well. We have the broadest, deepest institutional and corporate investment banking platform, and we've had all our engines fire up. We continue to dominate in the investment banking space. Our transaction services and custody business continue to be areas of real leadership. Our markets business is now the largest markets business within Asia. We went through a big strategic change, which was about exiting our consumer businesses. That was an emotionally difficult one. RBI was very helpful given there was no precedence of a transaction of the size and scale. From the time we announced, to when we closed, we preserved value of the business. Professionally, it's been an incredible growth experience. I'm really happy I got this exposure and ability to come back and spend so much time here.
Investment banking in India has been a small market relative to the global scale. Do you see that change?
That is changing, because you're going to have larger transactions and more cross-border transactions, foreign investors coming in or taking out, coming from India. Indian companies now have an ability to finance and play selectively with some of the global opportunities. The capital markets have really been developing in a manner which gives the ability to do multiple billion dollar IPOs. Very few other global markets have the size and scale. Indian markets are at the pivot point. I'm really proud of what our investment banking team has delivered. We've got a super charged up experience team, which is really intense. The other thing which we package well is bringing the holistic ‘One Citi’ approach to our clients. As you get more cross border in the way the market evolves, that plays naturally to our strength. The strategic value of that business is a lot more than just the fees you get because it gives you access to the C-suite. Even if that is a high single digit business in our overall global revenues, I think we've got to wait it for the strategic value which comes with that business.
Which sectors do you see Indian companies make acquisitions abroad?
There's been a lot of pessimism about Europe, but there's also very good valuations in Europe. It doesn't have to be specific sector. There is a lot of uncertainty in the world right now, but India is probably one of the best places to be in. We hear it from our clients. In terms of geopolitics also, India is in a reasonable spot. The government has done a fantastic job in building the kind of relationships and managing that balance in a very positive way.
The bank has grown at about 15% CAGR in the last four years even minus the retail franchise. As you leave behind the Indian franchisee for K Balasubramanian, where do you see the green pastures?
The need for capital in India is so huge that I do not believe the conventional mechanics of delivery of credit for all the banking needs just from the banking system is going to be enough. What we need is more institutional investors to come in. We've seen on some of the REIT and InvITs transactions get a great start and we need a lot more of that. We need better risk allocation between institutional and bank investors. While the equity markets is very sophisticated in India, the rupee corporate debt market needs to have a better maturity to be able to fund companies across non-investment to investment grade business a lot more. We are seeing more securitizations happening now as the pressure on the bank balance sheets have come. That’s a big area of focus for us. In terms of green shoots, at some level I would say Citi’s strengths are aligned with what India needs, whether it's flow of foreign capital, digital delivery, the ability to get foreign investment into the country or taking Indian clients out. We are trying to create a more institutional lending (franchise). We are also exploring a better role on the private credit side.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
