Trade Finance market sizing and recommendations to increase Axis’ market share

Abstract

This report focuses mainly to find the market size of the trade finance industry in India and explore the market share of Axis bank and its competitors. Finding market share is one of the important aspects of business which tells the company’s relative position with its competitors in the industry. A qualitative study was conducted to analyze and assess each competitor. Interviews are conducted with the managers of other banks, who are the suppliers of the product. Finally market share analysis and competitor analysis were done on the garnered data to find the competitive position of Axis bank with respect to the other players in the market. The assessment was done based on the following factors, Product & technology, sales & marketing, resources, financial capability. The key findings of the project are: Size of Trade finance market: Market size of the Indian trade finance market (Letter of Credit, Bank Guarantees and inland bill discounting) is estimated to be around INR 16,000 Billion. With a CAGR growth of 20%, the estimated market is around INR 18,000 to INR 19,000 in the next few years. Letter of credit forms a major share followed by Bank Guarantee and Bill discounting an almost equal market size with LC constituting around 40 % of the market. Axis Bank has a total volume of about INR 350 billion INR in LC and BG. Competitive analysis of the market: In the Indian market, Trade finance is dominated by the PSU banks such as SBI, BOB and BOI and the multi nationals include CITI bank, Standard Chartered, HSBC, JP Morgan and Deutsche Bank. For this project, only Indian banks have been taken into consideration. SBI leading the TF market with around 16% market share, followed by the BOI and BOB among the Indian Banks. Axis Bank has a market share of 2.61% in the TF market in India. With a target market share of 4% in the Trade finance industry, Axis is looking at a target market volume of INR 600 - 650 Billion in LC and BG in the next few years.