The coronavirus pandemic has had a devastating impact on almost every sector of the economy.

BusinessLine reached out to Anshul Lodha, Regional Director, BFSI & Legal, at Michael Page India, a recruitment agency, for his take on how the pandemic is affecting the BFSI and NBFC space in India specifically, as well as hiring trends in these sectors.

Lodha feels that though these are unprecedented challenging times, there is some ongoing activity that portends better days ahead.

“Within financial services, the NBFC and fintech spaces have taken the worst hit as they struggle to raise debt for themselves. Most players have stopped disbursement to new customers and are focusing only on their existing loan book,” says Lodha.

New market entrants (less than two years in business) would either get acquired or acqui-hired by large NBFCs and fintech firms. As for hiring activity, the official says, “Large NBFCs are likely to honour bonus pay-outs for FY20 but will have put a freeze on promotions, appraisals, increment and other business-related expenditures.”

Apart from public sector undertakings (PSUs), no other banks or NBFCs in India are disbursing loans at this point of time, says the official, adding AMCs and other capital market players are also facing issues, given the sharp decline in stock markets and issues in the debt market.

Fund activity

The situation, though, is not completely bleak. “The overall investment landscape in funds is on a wait-and-watch approach. While the focus currently is on business continuity and sustainability of portfolio companies, there is a general expectancy that funds will be able to buy assets at cheaper valuations in the next few quarters,” says Lodha.

He points out that the process of on-boarding is on at some companies. “Most funds are comfortable with digital on-boarding for new hires, with many funds imparting virtual training and induction programmes. However, fundraising is adversely affected with many domestic funds having to temporarily stall their plans during this pandemic,” adds Lodha.

Within the venture capital space, the recruitment company has observed “a lot of focus on keeping portfolio companies afloat. Investment teams are all hands-on-deck with portfolio management. Funds that are focused on technology and purely digital businesses are still actively scouting for investment opportunities given the rise in online transactions and interactions during this time,” he says.

Digital payments, e-payment companies and gateways are registering a big surge in transactions during the lockdown.

Pointing out that pre-MBA hiring is still ongoing in global private equity and venture capital firms, the official maintains the trend could be attributed to these being contract roles for 2-3 years before candidates apply for B-Schools in India and overseas.

Michael Page India is also tracking increased investment in health tech and ed-tech businesses. Lodha insists some funds are actively hiring in the market for mid-level roles (Sr. Associate/VP) with significant industry expertise and sourcing capabilities.

“Our overall outlook is that hiring will go slow in this space in FY21 given troubled portfolios for many venture capital players,” he adds.