Industries under infrastructure, such as metals, cement and allied businesses, are starting to add to their capabilities as tangible evidence demand revival, raising expectations that continued expansion will now follow years of corporate deleveraging, State Bank of India (State Bank Of India) the chairman told ET.

New Delhi’s various incentive schemes to boost manufacturing in the country and capacity addition spending by state-run companies could spread to other sectors, providing much-needed impetus to the industry. Economy, Dinesh Kumar KharaThe head of the country’s largest public lender said in an interview on Wednesday.

“In iron and steel, we are looking at some investment proposals and people have approached us for fresh loans,” Khara said. “People are also looking at expanding brownfield capacity, which means they have much clearer visibility Demand This also augurs well for capacity utilization.

India’s economy is expected to grow by 9.5% this fiscal year after the first contraction since independence in FY21. Despite a jump in equity values ​​and corporate profits, fresh investments have been scarce recently as high leverage companies have used lower interest rates to pay off debt instead of setting up new plants. The ongoing revival may have taken economic activity to pre-pandemic levels, but the country needs more.

“To come out of the losses in the last 20 months, the activity level has to be stronger,” Khara said. “Pre-pandemic, there was already a tendency to slow down; therefore, a return to pre-pandemic levels is positive but it is not enough. The rate of growth should be very high as the cash flows of many (businesses) have to improve. ”

While SBI’s market value has also more than doubled since the pandemic subside, the stock is still not reflecting its intrinsic strength and the value of its holdings in various businesses.

Khara said, “I firmly believe that the market underestimates SBI because if you look at our two listed subsidiaries, they are over Rs 2 lakh crore, and our shares in those subsidiaries are 55% and 70% respectively. Huh.” “We also have several unlisted subsidiaries that are doing really well and[there]are more than 22,000 branches, 70,000 business correspondents and the same number of ATMs. It is the strength of our distribution network that allows us to capture opportunities. And to that extent, the value of the main bank has been greatly underestimated.” The lender also plans to list its mutual fund and general insurance businesses, but they are still “some time away.” are,” said Khara.