Sounding an optimistic note, ICICI Securities Managing Director and CEO Shilpa Kumar expects that a large part of the rupee movement has played out.

Explaining the recent developments at ICICI Securities, she said that the reappointment of ICICI Bank Managing Director and CEO Chanda Kochhar as a Director on the board of ICICI Securities is an issue for the lender to comment on. Excerpts:

What is your opinion on the recent weakening of the rupee?

We have higher inflation than other economies and are also dependent on critical imports. Over a period of time, the rupee should, to some extent, account for these fundamental factors. For some years, the rupee was very range-bound. It also coincided with benign oil prices and good flows into the country. Now, a combination of factors – increasing rates by the US, rising oil prices and geopolitical tensions, including currency pressures because of trade wars – have created pressure on the rupee, resulting in a significant sudden move. India is in a good situation in terms of reserves.

The central bank has the capacity, and if it chooses to, can also supply currency to the market. One would assume that a large part of the movement has played out.

Given that the economy has adjusted to the currency where it is, if we don’t see too sharp a movement from here, one can expect it to be range-bound in the current range.

How has the experience been after the listing of

ICICI Securities?

We are five businesses and ICICI Securities works in the entire savings trajectory. When there is growth in the country, more people are looking to save through equity markets, and the opportunity for us is very large. Since listing, our focus has been on reaching out to more customers, making them interact with markets in a more seamless, digital way, and also in ensuring that we make available the full array of all investment products.

Since listing, ICICI Securities’ share price has fallen. Also, will the refund by ICICI Prudential MF from investments in your company’s IPO have an impact?

It is not fair for me to comment on the company’s share price. But if you see how it is currently valued... one has to consider that the price captures five different businesses, and the company is the leader in almost every business it operates in. While the refund by ICICI Prudential MF is related to our share, it is nothing that relates to us.

What about concerns regarding the reappointment of ICICI Bank Managing Director and CEO Chanda Kochhar as a Director on the board of ICICI Securities?

This is an issue for the bank to comment on. There were no questions relating to this at the annual general meeting. As a company, applications from directors that come up for reappointment are taken up if they meet the qualification criteria.

Do you expect equity markets to also be impacted by the current volatility?

In the last four-five years, the dependence on capital flows (in terms of current account) has reduced. The dependence of equity capital markets on foreign flows has also come down.

Indian savers have become very active participants in the Indian equity markets in an institutional way through mutual funds and insurance.

Also, the EPFO and provident funds have started investing in a small way in the equity markets through exchange-traded funds. That has also become a fairly sizeable number and has supported the markets.

But with equity markets seeing record highs, is there expectation of a downturn?

If you look at the current earnings data and current market level, it looks like the market is available at not a cheap multiple.

For many seasons we have not seen decent earnings growth in the Indian corporate space due to reasons such as pains in the banking sector and demonetisation. Early signals seem to suggest the economy is on the mend and earnings are picking up. So, investors are likely to hold on to the equity market as the hope of earnings growth will give a flow to the equity market.

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