- Helios Capital is reducing banking exposure while increasing financial services holdings in BFSI.
- CEO Dinshaw Irani cites strong demand in consumer-facing financiers amid India's consumption growth.
- Irani highlights structural challenges for banks, including deposit competition, rising government borrowing.
Helios Capital (India) has been steadily paring down the banking component of its BFSI allocation while holding firm on financial services, with CEO Dinshaw Irani telling NDTV Profit in an exclusive interview that consumer-facing financiers are where "the real fun lies" as India's consumption story continues to play out.
Irani said the fund's portfolio construction over recent months reflects a clear shift within the space. "In the BFSI segment, the B is becoming smaller, which is banking is becoming smaller as a proportion, and the financial services is the one which is really gaining pace for us," he said.
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The rationale ties back to Helios' broader thesis on domestic consumption. Irani pointed to Bajaj Finance's recent numbers as reflective of underlying demand strength, noting the company held up despite a quarter hit by war-related disruption and crude-driven inflation. Bajaj Finance remains one of the fund's top five holdings.
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Helios Capital has a different take on banking stocks versus financial services
Photo Credit: NDTV Profit
On banks specifically, Irani flagged structural headwinds. He said competition for deposits has intensified, driven both by public sector banks and by new FCNR(B) norms, even as credit disbursement growth remains healthy at around 17%. Rising government borrowings add further pressure on deposit mobilisation, he said, an issue that persists even with some relief expected from the new FCNR(B) window.
"Obviously, when you are talking about consumption, you have to talk about the financiers to the consumption," Irani said, explaining the fund's preference for non-bank financial services exposure over traditional lenders.
The stance forms part of a wider portfolio tilt at Helios, which has also increased exposure to auto ancillary and precision engineering companies on the back of rising private sector capex, and to EMS players supplying data centre infrastructure, while staying away from data centre operators themselves, which Irani described as more of a rental-yield play.
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