In interaction with Anirban Chakraborty, MD & CEO, Tourism Finance Corporation of India Ltd

Speaking with DSIJ,  Anirban Chakraborty, MD & CEO, Tourism Finance Corporation of India Ltd (TFCI) tells us, India is a large market for travel & tourism, and TFCI, constantly strives to extend the best of the dynamic offerings of the country to all types of travellers.

How is the business outlook for TFCI post the lockdowns? What is the best and the worst-case scenario (recovery) you are working with?  

India is one of the fastest-growing major economies in the world today. With the country’s economy expected to grow and bounce back steadily along with the government's support to the tourism sector, the demand for hotels and other tourism infrastructure projects is improving considerably. The growth in India’s tourism, infrastructure, industrial/manufacturing, real estate, and services sectors is also expected to result in opportunities for TFCI to expand its business at a steady rate in the near future. While the pandemic did disrupt the sector, the third quarter witnessed a progressive recovery playing out across sections led by moderation of concerns caused by the COVID-19 pandemic. Many sections of the hospitality industry, especially the leisure segment have started witnessing a surge in domestic demand. With further easing of travel restrictions, we expect to see a steady recovery path.  

On December 31, 2020, our loan book stood at Rs 1,989 crore (of which, 82 per cent is towards the MSME segment) with fresh disbursements of Rs 200 crore in Q3FY21. TFCI’s profitability continued to remain healthy and the pre-provisioning operating profit and profit after tax at Rs 32 crore and Rs 24 crore, respectively in Q3FY21 helped us stay optimistic. Our asset quality continued to be robust with gross non-performing loan (NPL) and net NPL standing at 0.87 per cent and 0.63 per cent, respectively. The company is well-capitalised with a CAR of 37.59 per cent. With the backing of a strong balance sheet and the revival in the broader economy, including travel & tourism, we will continue to focus on business growth in diversified sectors, while maintaining our leadership position in the hospitality sector. The best-case scenario for us would be the administration of vaccines to the majority section of the society, which would ensure recovery by the end of this calendar year. However, the worst-case might happen if the second and subsequent waves of a surge in the infection are witnessed, which shall further delay the recovery by another 2-3 quarters. 

What are your top three strategic priorities as a business leader? 

I would like to continue focus on asset-backed lending, monitoring the loan portfolio on a regular basis and shoring up resources as & when required.   

What is the outlook for the Indian hospitality industry?  

The domestic hospitality industry took one of the hardest hits in 2020 due to rigid social distancing, brought on by the pandemic. However, there has been a swift recovery in demand, which is only expected to garner up more speed in the latter part of the financial year 2021-22, as vaccine rollouts, gain momentum. As travellers all across are seeking respite post the long year, a new era for the business is being witnessed. 

The term ‘Vengeance Travel’ is quickly gaining traction. This has spurred hope and optimism in the hospitality industry, and we believe that 2021 will bring more stability and security, both emotionally & financially, for people to be able to venture out and experience all that they have missed last year. Also, leisure markets close to major source markets, including Mumbai, Delhi, and Bengaluru, have mirrored Goa’s popularity closely and are profiting from weekend business. 

The government also undertook timely measures to support these impacted sectors and MSMEs with schemes such as the implementation of the Emergency Credit Line Guarantee Scheme (ECLGS). Additional support for the NBFC sector included the announcement of a moratorium, implementing various liquidity enhancing measures (TLTRO, SLS), and the Partial Credit Guarantee Scheme (PCGS). Since as early as September 2020, hotel occupancy levels have grown month-on-month to cross 35 per cent sector-wide in November, which was the highest since the nationwide lockdown announced in end-March 2020. The year 2021 has only resonated with this trend, and many giant hotel chains are adding fresh new avenues & destinations to their kitty. We are looking at a year of transformation, and not just recovery.   

What are your key growth drivers?  

India is a large market for travel & tourism, and we at TFCI, are constantly striving to extend the best of the dynamic offerings of the country to all types of travellers. Our growth drivers cover a diverse portfolio of niche tourism products including heritage tourism, cruises, adventure, medical, wellness, sports, meetings, incentives, conferences & exhibitions (MICE), eco-tourism, film, rural as well as religious tourism. India is popularly known as a destination for spiritual tourism for domestic & international tourists, and we at TFCI, are working extensively to build upon the opportunities it presents. Further, leisure tourism shall also remain one of the major drivers of growth in the industry for some more time. 

The Indian hospitality industry, spearheaded by the hotel market, has emerged as one of the primary sectors which are driving the economic growth of the country. In India, hotels are classified based on location (city hotels, airport motels, resorts, etc.), level of service (upscale, mid-market, and economy), and themes (boutique hotels, heritage hotels, etc.). And our key focus today is to cater to the diverse potential clientele, help in improving tourism infrastructure in the country, as well as trying to encourage more domestic tourism. 

What is your outlook on interest rates in India? 

The central banks are set to spend 2021, maintaining their ultra-easy monetary policies even with the global economy expected to accelerate away from last year’s Coronavirus-inflicted recession. The assumption is that central bankers will want to guarantee that the recovery is safe before they even start to consider tightening policy. Continued uncertainty over the path of the virus along with elevated unemployment and weak inflation are the main reasons for waiting. And even if inflation makes a comeback this year, central banks will try to look through it and maintain its accommodative stance as the main focus shall remain in bringing back all-inclusive growth.