The art of assessing lending environment on a tough fairway

Despite a complete limbo in growth and partly in policy as well, ‘old economy’ industries like oil, steel, cement and power remain central to future economic fortunes; and, given that funding and planning lie at their core, CFOs are always in demand, no matter how the economy swings.

Such demand has seen well- known CFO and golf aficionado Prabal Banerjee swinging from the Hinduja group to Adanis and now to the Essar Group (where he is  president, international finance)... all in the last six years.

As he tees off, he carries with him plenty of caution and some optimism. Like golf, the economy has become unpredictable, he says. “Golf keeps you cool in difficult times.”

But that doesn’t mean he keeps business conversations off the fairway where, typically, a session lasts four good hours, a fair bit of that spent on discussing strategy. This time, it’s a conversation with Sanjeev Bhasin of Singapore-based bank DBS. It’s hard to keep the economy out of it.

“No one knows how the global economy will turn around and how India will react to the 2014 general election results. If we don’t have a clear mandate, then it would affect the future course of action,” Banerjee says.

Politics has always been a blip on his economic radar. Banerjee prefers to focus on more fundamental issues like industrial growth. “Our economy is at its lowest ebb and the only way it can go is up. Corporate results will get better. I’m optimistic that new liquidity flows will come in and, hopefully, much better supply-side management will control inflation better.”

For CFOs such as Banerjee, the high interest rate regime that has been keeping the books sore, is an area of concern. Given that there are no signs of near-term improvement, Banerjee’s (and other old economy CFOs’) financial creativity will be measured by the quantum of funds he/they can raise overseas. “We will have to learn to adjust with high interest rates and sustain growth somehow. More corporates will move towards overseas capital due to availability and cost arbitrage.”

The next few quarters are going to be crucial, he says. So, clad in his trademark attire of a dark stripe T-shirt and a hat, he goes about playing golf even as he liaises with banker friends, getting a bird’s eye view of the lending environment. In this respect, he prefers a few games with fellow CFOs such as Ramesh Sobti of IndusInd, Punit Chaddha of HSBC and Sanjiv Malhotra of Bank of America Merrill Lynch.

Golf, Banerjee says, has taught him to be strategic and patient – two traits that are a must in tumultuous economic times. “It’s one game where you can’t blame others for one’s own fault.”
That’s a good lesson for the boardroom too where learning is the only constant.

If he had a chance to swap his business life with one global business personality for a day, he’d choose Carlos Ghosn, CEO of Renault and Nissan, Banerjee says. “Having spent about 11 years in the auto industry, I know some of it and can understand it even if for one day – it would be a one very meaningful day spent.”

Golf will have to be off menu though – Ghosn doesn’t play it. “That’s okay,” says Banerjee.
He has a special list for his game’s future. For someone who picked his first club in 1998, Banerjee is constantly trying to lower his handicap. And when he succeeds, he says he would be ready to play with Phil Mickelson and Tiger Woods in a dream game at the Augusta National.

Shaili Chopra is an award-winning business journalist and founder of www.golfingindian.com