Kumar Birla is confident of growth but says lack of credit maybe hampering job growth

Last Updated: Wed, Sep 19, 2018 11:35 hrs
Kumar Mangalam Birla

Billionaire Kumar Mangalam Birla on Tuesday said that high debt pile among corporates had "stunted" job growth.

Birla remained optimistic even as he said that NPA-resolutions could lead to credit availability and in turn lead to job growth. He was speaking at the Bloomberg Economic Forum.

He also spoke of how rising debts on balance sheets had cut investments.

"Unfortunately, we haven't seen too much of new investment happening on the ground in the past few years. I would attribute it to the fact that when this government came, most companies and groups, with the exception of a few like ours, had huge debt on their balance sheet," said Birla.

This lack of ability to invest, coupled with change in banking norms to being more stricter, is "one reason why the employment generation has been stunted", said Birla.

Like most industrialists, he said he was keen to see a lower tax regime but also acknowledged that the government had its own "fiscal compulsions".

Birla at the Economic Forum was sounding confident of making fresh acquisitions. In fact, Bloomberg itself came up with a news-report after his peppy talk, with a headline- "Acquisitive Indian Billionaire says he's hungry for more deals".

The adjective "acquisitive" caricatures the optimistic mood that the bespectacled billionaire reflected at the Forum.

Birla's group company completed nearly 35 acquisitions in the last two decades, and Birla was looking at more mergers and acquisitions in the US, Europe and also India.

"We are constantly looking for M&A in the US, Europe and also in India," he said, adding that the group looks at opportunities which are value accretive while making its inorganic play.

Also Read: Birla's latest $2.58 billion deal.

Elaborating on acquisitions, he said, that each acquisition has to either expand the presence for a company or help it integrate either backward or forward. He also clarified that his group will not acquire an asset overseas in a sector in which it had no presence.

Referring to NCLT resolutions, he said the process was akin to "low hanging fruits", presenting acquisition opportunities domestically, but added that his group had restricted itself to bidding for only one cement asset since it was the one aligned to its strategies.

On the telecom sector, where his company Idea Cellular recently merged with British telco Vodafone's local operations to form the country's largest telco with 410 million subscribers, Birla said he does not expect price wars to end anytime soon.

With Agency Inputs

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