The RBI governor underlined that the central bank was not just managing inflation expectations but also anchoring rupee depreciation expectations. Das said that this had become relevant in the context of the Dollar Index (DXY) crossing the 110 mark amidst unprecedented strength. Of course, the RBI has been intervening in the forex spot and futures market to anchor the rupee, but that has its limitations. In 2022, rupee has already weakened 7% against the dollar. Forex reserves have fallen nearly 12% from the peak.
India’s total number of demat accounts crossed the record 10 crore mark for the first time. The month of August alone saw nearly 22 lakh new demat accounts being opened taking the overall tally to beyond the 10 crore mark. At the COVID lows in March 2020, India had 4.09 crore demat accounts, so the 2.5X growth has come in just 30 months. CDSL operates a total of 7.16 crore demat accounts against 2.89 crore demat accounts for NSDL. However, NSDL’s assets under custody (AUC) at Rs320 trillion is 8.3X the
AUC of CDSL.
According to a note by RBI, India’s external debt was up 8.2% yoy at $620.7 billion as of March 2022. Only 53.2% of this debt is denominated in dollars while 31.2% is denominated in INR. The ratio of external debt to GDP was comfortable at 19.9% as were the ratio of reserves to external debt at 97.8%.
Long term debt with residual maturity of more than 1 year accounted for 80.4% of the total external debt. The short term debt is predominantly trade credit for financing of imports. Sovereign debt rose 17.1% at $130.7 billion.
According to Tracxn, Indian tech start-ups secured $885 million funding in August 2022. Sequentially, the investments were down 20%. Tech start-up funding had peaked in Q3 CY-2021 at $14.8 billion and has been on a steady decline since. Some of the preferred sectors for start-up funding in August 2022 were alternative learning, ecommerce enablers and Investment Tech. Upgrad, EarlySalary and Razorpay were among the active start-ups. Beenext, Lets-Venture, Accel and Blume Ventures were the major investors.
India’s PSU power giant, NTPC Ltd, acquired the stressed Jhabua thermal project (600Mw) of Avantha group, formerly owned by Gautam Thapar. This was done through the IBC process. The estimated deal size is Rs1,830 crore. NTPC will get 50% stake in the Jhabua project while the lenders with own the other 50%. Jhabua has been referred to NCLT in May 2019 after a Rs35 crore default to operational creditors. For NTPC, this marks the first acquisition via IBC route. NTPC is expected to drive turnaround at Jhabua.
Morgan Stanley described RIL’s current investment cycle as less aggressive. However, it has added that this would reduce cost of equity. Morgan has raised its price target to Rs3,085. According to the Morgan Stanley report, lower competition in telecom makes earnings predictable while retail business witnesses steady growth. In addition, the integration into chemicals and access to cheaper West Asia gas feedstock will de-risk the O2C business. New energy and retail footprint are expected to drive market value in future.
On 05th September, crude oil prices rose 4% after the OPEC members agreed to a minor production cut to boost prices. Brent gained $3.53 to $96.55/bbl. OPEC will reduce output for October 20225 by 100,000 bpd but hinted at more supply cuts in the near future. Last month, Saudi Arabia had flagged the possibility of output cuts to reverse the sharp fall in oil prices. Oil prices have fallen on apprehensions that interest rate hikes and COVID-19 curbs in China could depress global growth and dent the incremental oil demand.
The CCI finally approved the $4.7 billion acquisition of BillDesk by PayU, after more than a year. Both the players compete with Razorpay, Pine Labs, Paytm, Infibeam Avenues and MSwipe. The final regulatory nod from the RBI is still awaited. BillDesk facilitates over 170 payment methods as a payment aggregator and also provides biller network solutions. Earlier, PayU had already acquired Citrus Pay in 2016, Wibmo in 2019 and PaySense in 2020. PayU is already the preferred payment gateway for many internet
players.