Indian Bank eyes emerging segments for incremental loan growth

Indian Bank will be expanding its loan portfolio in several new segments such as renewables, ethanol, smart metering, and e-commerce and associated areas to drive incremental growth.

The Chennai-headquartered bank has reported 13 per cent growth in advances in FY24 and has indicated that it would strive to maintain the same level of growth in loans during this fiscal too.

With strong economic growth and buoyant GST collections, the public sector lender expects a healthy demand for credit this fiscal. While the traditional segments are likely to maintain their growth levels, the bank is also focusing on emerging segments for additional growth opportunities.

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Sunrise sectors

SL Jain, Managing Director & CEO of Indian Bank, outlined opportunities in segments such as renewable energy, ethanol, smart metering, city gas distribution, e-commerce sector, and associated infrastructure areas such as warehouses.

Data centres and solar panel manufacturing are also new and upcoming areas where the bank is giving loans and the margins are slightly better. Food processing is another segment the bank intends to grow its portfolio.

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Renewable energy is a key focus, with the bank’s outstanding loans in this sector increasing to ₹1,260 crore as on March 31, 2024, from ₹132 crore in March 2023. The bank’s loan book in the ethanol segment doubled to ₹906 crore in March 2024.

The bank anticipates further growth in the renewable energy sector, as it will seek to participate in programmes like PM-Surya Ghar Muft Bijli Yojana, a rooftop solar scheme for households.

Other areas

The share of advances in the infrastructure category, including power, port, roads, and others, have remained steady at 12 per cent in gross advances over the past couple of years.

The bank’s advances to the infrastructure segment stood at ₹54,857 crore in FY24 against ₹61,254 crore in the previous year. Among these, the power sector accounted for ₹20,271 crore (₹22,006 crore) making it the only category with a double-digit share in advances alongside home loans, retail, auto loans, agriculture, and NBFCs.

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