Biggest Fund Manager Jain Sees Value in Banks: Corporate India

By Anto Antony and Santanu Chakraborty - Mar 3, 2013

Prashant Jain, chief investment officer at India’s biggest money manager, said he sees value in some of the nation’s biggest lenders amid prospects of a reduction in bad loans that have made them Asia’s worst- performing banking stocks in the past year.
Jain, who manages $18.6 billion at HDFC Asset Management Co., also runs HDFC Top 200 (ITCT200), India’s largest equity fund. Banks account for about 29 percent of HDFC Top 200’s assets, according to data compiled by Bloomberg. The fund owns state-run Canara Bank, Bank of Baroda (BOB) and Bank of India (BOI), the three worst performers on the 88-company MSCI AC Asia Banks Index (MXAS0BK) in the past 12 months.
Finance Minister Palaniappan Chidambaram’s budget pledge to add 140 billion rupees ($2.6 billion) to boost capital at banks will help state-run lenders increase credit and revive Asia’s third-largest economy forecast to expand at the slowest pace in a decade in the year ending March 31. A drop in delinquent debt from a five-year high will lure investors to the nation’s lenders, according to Diwakar Gupta, chief financial officer at State Bank of India (SBIN), the country’s biggest financial services company.
“At some point non-performing assets have to moderate,” Jain, 45, said in an interview to Bloomberg TV India. “Last quarter was better than the previous quarter and there is expectation this quarter will again be better than the last.”
HDFC Top 200 is India’s best performing large-cap fund in the past decade. It has returned 28 percent annually compared with the 21 percent gain at the S&P BSE Sensex index in the same period.

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