BENGALURU: The Indian IT industry, which has been facing macroeconomic challenges, might witness a further slowdown in BFSI (Banking, Financial Services and Insurance) deals due to the recent collapse of Silicon Valley Bank (SVB).
Both Wedbush Securities and JP Morgan’s recent reports indicated that the crisis might delay deal ramp-ups and push back new order closures. JP Morgan said TCS and Infosys have the highest exposure to regional banks in the United States.
Peter Bendor- Samuel, CEO of Everest Group, a research firm, told TNIE that the direct impact of the SVB crisis on the Indian IT industry will be modest but the indirect could be more significant. In case of direct impact, this is going to have a negative effect on the high-tech customers, particularly the smaller start-ups.
“That said this is a relatively small part of the portfolio and not a big deal in the grand scheme of things,” he said. However, in case of indirect impact, this is creating economic waves well beyond the start-ups and could be triggering other bank failures as well as contributing to further economic uncertainty which will negatively affect the Indian industry.
“We are already facing some hesitancy in initiating new projects and this will further contribute to the unease and slow growth,” he said. However, he added that although growth has come down it is still healthy but not at the post-pandemic levels. The BFSI sector draws the bulk of IT companies’ revenue.
Silicon Valley Bank’s collapse is likely to be felt across the technology companies globally over the coming years, said Roshan Shetty, Chief Revenue Officer, Sonata Software.