Revival in infrastructure spending could drive market upswing: Ashi Anand

Ashi Anand, Founder & CEO, IME Capital, in an interview to ET Now, shared his perspective on capital expenditure (capex) trends and the evolving story around Yes Bank, highlighting how these developments could influence market performance and investor sentiment.

Capex: Government Leads, Private Sector Must Step Up

"The market rally in 2023 and 2024 was largely driven by capex, real estate, and capital formation sectors. That momentum slowed last year. The revival then was mainly due to government capex, while private capex lagged. With government spending now at a high base, private sector participation is crucial for continued market growth," Anand said.


He emphasized that government budgets over the past few years have not increased capex at a rate higher than the overall budget, making it increasingly important for private companies to invest in infrastructure and capital formation.

"It is still early days, with unutilised capacities and uncertainty in global trade. Any revival in private sector capex could give the market a fresh leg of growth. The underperforming capex theme over the past six to nine months could start coming back," he added.

Analysts agree that a revival in private sector spending would not only strengthen the infrastructure sector but also have a cascading effect on related industries, including real estate, construction materials, and heavy machinery. With global trade uncertainties easing gradually, there is cautious optimism that private players may ramp up investment in the near term.

Yes Bank Recovery: A Case of Strategic Intervention

Anand also weighed in on the ongoing developments at Yes Bank.

"The government handled the Yes Bank crisis well. Financial firms rescued the company and even made money from the process. Yes Bank’s shift from institutional SME lending to a more retail-focused, diversified model is still underway," he said.

He explained that Yes Bank’s previous focus on high-yielding structured lending, loans against shares, and promoter funding helped the bank generate strong returns but also created significant risk. The current transition aims to make the bank more retail-oriented with better-managed credit costs and diversified lending portfolios.

"It is too early to call this transition a success. Meanwhile, we prefer other banks with clearer strategies and proven execution. Yes Bank is still in transition, and the eventual outcome on credit costs and new segments is uncertain," Anand added.

Key Takeaway

Ashi Anand’s insights underscore two critical trends shaping India’s markets today. A potential revival of private sector capex could rejuvenate the infrastructure sector and drive broader market growth. At the same time, Yes Bank’s ongoing transformation highlights the challenges and opportunities in banking sector reforms. Investors will be closely watching how these developments play out in the months ahead, with cautious optimism prevailing in both segments.