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RBI’s monetary policy meet: Here’s some of the expectations

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3 years ago

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Though the RBI’s raising policy rates in the ongoing monetary policy committee meeting is a “no-brainer”, as its Governor Shaktikanta Das said in a recent interview, investors, however, await the actual degree of percentage hike before taking fresh positions and future course of action in the financial markets.

Besides policy rates, investors also eye other macro-economic forward-looking guidance from the central bank.

The three-day meeting started on Monday.

In early May, the RBI, in a surprise off-cycle meeting, hiked the repo rate, the rate at which the central bank lends short-term funds to banks by 40 basis points (bps) to 4.40 per cent, amidst rising inflation concerns in the economy.

In the same off-cycle meeting, the cash reserve ratio was hiked by 50 basis points to 4.5 per cent essentially to squeeze out some liquidity from the system.

India’s retail inflation accelerated to 7.79 per cent in April, remaining above the tolerance limit of the central bank for a fourth month in a row. It is highly likely that the retail inflation will remain above 6 per cent for another few months.

Besides, wholesale inflation in the country rose to 15.08 per cent in April 2022 from 14.55 percent in March, which has been in double digit for over a year now.

Below are some of the expectations by analysts, market observers, and real estate players on the possible outcome of the ongoing monetary policy meeting:

Deepak Jasani, Head of Retail Research at HDFC Securities

MPC’s off-cycle policy meeting in May clearly pivoted its focus on inflation over growth as a policy priority. The MPC is likely to increase the benchmark repo rate in its ongoing monetary policy review as inflation shows no signs of abatement.

The RBI is likely to follow a nuanced and calibrated approach to rate hikes once it reaches its pre-Covid neutral accommodation (5.15 per cent vs current 4.40 per cent). We expect a 40 basis points rate hike in the upcoming policy meet and see the RBI raising policy rates to 5.15 per cent by calendar year end.

Any further rate hikes will be contingent on the inflation-growth dynamics and would be data dependent.

Hence, equity markets and debt markets have for the most part discounted this rate hike and market reaction would depend more on the statement of the RBI Governor hinting about the future course of action.

Ashish Chaturmohta, Director, Research Group at JM Financial Services

India is currently facing the heat of “imported inflation” owing to rising crude prices, supply chain disruption and global liquidity absorption.

Hence, to control the same, the government has played its role by reducing petrol and diesel prices, bringing in restrictions for exports in order to keep the domestic market stable etc, and on the other hand, the RBI has been very proactive in their actions, which was clearly visible from their 40 base points surprise rate hike.

It’s been the first time in the last several years that the RBI and the Government are both working in a synchronised way. We believe the rate hike would be 30-40 basis points along with a stable outlook on the GDP.

Mohit Batra, Founder and CEO of MarketsMojo

The RBI will try to tackle two issues in its upcoming monetary policy – tackle inflation and ensure that the rupee does not depreciate too much against the dollar. The last time when the RBI revised its inflation target, crude was at $100 per barrel, and now it’s trading at $120 per barrel, suggesting a risk of inflation flaring up is high.

Keeping these facts like rupee depreciation and high inflation rate, I expect RBI to hike the interest rate by 50 basis points.

Satish Kumar, Research Analyst at Choice Broking

We are estimating a repo rate hike of 40 basis points by the central bank in the coming monetary policy to contain the inflation which rose to 8-year high of 7.8 per cent in April. Upside risks to inflation remain elevated given the prevailing high crude oil and commodity prices amidst supply side concerns.

Pushpender Singh, MD of JMS Group

The outcome of the MPC meeting is pretty obvious, most probably leading to an inevitable hike in the repo rate in lieu of a concerted effort to lower the inflation rates, which perhaps is becoming a huge aberrant in the growth parameters of the economy. I do not expect to see a massive increase in the repo rate but definitely, a slight rise will be announced to curb the dwindles and shift the radar of growth in the right direction.

Aman Sharma, Director at Spaze Group

There are great chances of a repo rate hike yet again in a bid to control the inflationary rates that grow unabated despite direct attempts to stop it. It has to be accepted with a pinch of salt by the industries across the segments which will face teething troubles due to the probable hike after the RBI’s MPC meeting.

A surge in the repo rate is almost certain, I do not think there will be a sharp insurgence but somewhat a marginal increase to let the inflationary challenges deflate and the numbers drop.

Mohit Nigam, Head, PMS, Hem Securities

The repo rate is anticipated to be raised by another 40-50 basis points by the MPC. This decision is influenced by rising price levels as a result of ongoing geopolitical tensions and supply-chain pressures, which are driving inflation higher. The primary goal of the RBI would be to keep inflation under control and minimise its second-round impacts.

Inflationary pressures on food and fuel remain high, and supply-chain disruptions continue to put upward pressure on input costs. The biggest issue is that if rates are raised further, urban demand, which was formerly a major concern, may dwindle. Agricultural output will be supported by favourable weather conditions, thus rural demand may not be affected as much.

Ashish Khandelia, Founder of Certus Capital

We expect the repo increase to be between 40-50 basis points in upcoming MPC meeting with future increases leading to 5.75 per cent (where we were exactly 3 years ago) or upwards by the end of FY23. 40 basis points increase in May caused homes loans to move in to 7 per cent +/- range from 6.5 per cent earlier.

And by the end of this financial year, home loan rates will likely touch 8 per cent. This is unlikely to derail the housing momentum, but it will certainly soften it. Coupled with increasing prices, the growth may slow down a bit in FY23, after a record FY22.

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Bharat Mobility Global Expo 2025: Toyota & Lexus Unveil Future Projects In Indian Portfolio; Images Below

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January 22, 2025

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New Delhi: Japanese car maker Toyota and it’s luxury arm, Lexus have showcased some of their future models from their respective India portfolios at the Bharat Mobility Global Expo 2025. Toyota’s standout concepts include the X-Van, bZ4X, and Urban EV, while Lexus has captivated audiences with the ROV Concept 2 and LF-ZC.

Toyota’s star studded lineup

Moreover, Toyota showcased some of its updated and facelifted models during the autoshow. The Japanese car maker features included the Prius Flexi-Fuel PHEV, the Hilux FCEV, and a detailed cross-section of the Innova Hycross hybrid. Additional highlights include the striking Hilux Black Edition and the Land Cruiser 300 GR Sports, adding excitement to the brand’s lineup.

Toyota X-Van (Concept)

The X-Van, envisioned as a futuristic MPV, is designed to redefine spaciousness and versatility to meet diverse customer needs. This boxy, three-row utility vehicle eliminates the B-pillar, resulting in an expansive glasshouse and flexible seating configurations, available in 1-3-2 or 2-2-2 layouts. It features sliding suicide doors, a three-pane sunroof, and robust plastic cladding on the lower sections, adding a rugged and bold aesthetic to its innovative design.

Toyota BZ4X

The bZ4X electric SUV concept, first unveiled in 2021, is built on the e-TNGA architecture developed with Subaru. Its design features sharp styling, chunky black wheel-arch trim, a contrasting roof, and a silhouette influenced by the popular RAV4 SUV. The front showcases Toyota’s ‘Hammerhead’ design language, reminiscent of the latest Camry sold in India.

In global markets, the production-spec bZ4X comes with a 71.4kWh battery, offering a WLTP range of 450km. It’s available in two variants: a single-motor version (204hp, 265Nm) and a twin-motor AWD version (218hp, 336Nm).

Lexus LF-ZC (Concept)

The Lexus LF-ZC concept offers a glimpse into the premium electric sedan slated for international launch next year. Designed with a modular structure, its centrally placed batteries free up space for versatile front and rear configurations, supporting both single- and dual-motor setups. Lexus claims the top-spec LF-ZC will deliver a range exceeding 1,000km upon production.

The concept features Lexus’s latest design language, emphasizing sharp, aerodynamic styling. Inside, it boasts a futuristic cockpit with a steering yoke incorporating steer-by-wire technology and digital control pads seamlessly integrated across the cabin.

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Maha govt signs 31 MoUs for investment proposals worth Rs 6,25,457 crore at Davos

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5 hours ago

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January 22, 2025

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Mumbai, Jan 22: The Maharashtra government has signed a record 31 MoUs with investment proposals worth Rs 6,25,457 crore in the field of steel, metals, renewable energy, infrastructure, cement, Lithium-Ion Batteries and Solar Modules on the sidelines of World Economic Forum summit at Davos.

The MoUs were signed on Tuesday in the presence of Chief Minister Devendra Fadnavis and senior government officers.

CM Fadnavis said, “The MoU signed today paves the way for Maharashtra’s comprehensive growth and development.” He further stated that this marks a new record for securing such a significant investment amount in a single day. Similarly, several investment agreements are expected on the second day as well.

Of the Rs 6,25,457 crore, JSW will invest a record Rs 3 lakh crore for Maharashtra’s Green Transformation and Tata Group will also make an investment of Rs 30,000 crore in multiple sectors.

The Chief Minister met with key executives of several companies and invited them to invest in Maharashtra. Among these, Tata Group Chairman N. Chandrasekaran held discussions with CM Fadnavis during which it was confirmed that the Group would invest Rs 30,000 crore in the state. The CM also met Carlsberg Group CEO Jacob Aarup-Andersen, who expressed interest in investing in Maharashtra.

The Chief Minister assured him of full cooperation for the group’s plans. Additionally, M.A. Yusuff Ali, Managing Director of the Lulu Group, conveyed interest in investing in Nagpur and expanding operations in Maharashtra.

CM Fadnavis held discussions with ReNew Power Chairman and CEO Sumant Sinha about a 15,000 MW pipeline and wind energy projects in the Beed district. Schneider Electric India’s Managing Director and CEO Deepak Sharma also met the Chief Minister. Discussions included the use of AI in the energy sector and strengthening ITIs in the state with assistance from the World Bank. Expansion plans in Ahilyanagar and Nashik were also hinted at. Mastercard APAC President Ling Hai held talks with CM Fadnavis, while Louis Dreyfus Company CEO Michael Gelchie discussed opportunities in agriculture, food processing, international shipping, and financial sectors. Emphasis was placed on enhancing collaboration in agriculture. The CM also met Cognizant CEO Ravi Kumar S. and discussed potential investments and opportunities.

“The series of meetings highlighted Maharashtra’s focus on attracting substantial global investments and fostering economic development,” said the Chief Minister’s Office in a release.

CM Fadnavis in his post on X said, “Extremely happy to witness the historic Rs 3,00,000 crore MoU signing between Govt of Maharashtra & JSW Group, with an employment generation of 10,000 in the regions of Chhatrapati Sambhajinagar, Gadchiroli, and Nagpur. Very much thankful to Sajjan Jindal ji for being a part of this historic moment at Davos, which will give a huge boost to Maharashtra’s industrial environment. It will give a big boost to Maharashtra’s industrial environment. The areas of this investment like Renewable Energy, Infrastructure, Cement, Lithium-Ion Batteries, and Solar Modules will play a huge role in our mission ‘Green Maharashtra.”

The government signed an MoU with Waaree Energy with a total investment of Rs 30,000 crore in green energy and solar components. it will create 7,500 jobs. The company chairman Hitesh Joshi was present.

The government inked an MoU with Blackstone-Panchshil Realty for an investment of Rs 25,000 crore for the development of the data centre. It will generate 500 jobs. Further, Blackstone will invest Rs 25,000 crore in Information Technology in the Mumbai Metropolitan Region. It will create 1,000 jobs.

The government inked an MoU with Erulearning Solutions for an investment worth Rs 20,000 crore in education. The government signed an MoU with ZR2 Group for investment worth Rs 17,500 crore in automobiles and EVs in Pune region to generate 4,000 jobs.

The state government and Balasore Alloys Ltd signed an MoU for investment of Rs 17,000 crore in steel and metals. The venture will generate 3,200 jobs. The company was represented by Satish Kaushik at the time of the signing of the MoU.

The state government and Reliance Infrastructure Ltd signed an MoU for investment worth Rs 16,500 crore in the defence sector. It will generate 2,450 jobs. The company was represented by Sateesh Seth.

Powerin Urjaa will invest Rs 15,299 crore in green energy and generate 4,000 jobs. Open Origin India Inc will invest Rs 15,000 crore in green energy to create 1,000 jobs.

Viraj Profiles Pvt Ltd and the state government inked an MoU for the investment of Rs 12,000 crore in steel and metals to generate 3,500 jobs. Neeraj Raja Kochhar, Chairman and MD of Viraj Profiles was present at the time of the signing of the MoU.

Avani Power Batteries will make investment of Rs 10,521 crore in electronics to generate 5,000 jobs in Chhatrapati Sambhajinagar. H2e Power will invest 10,750 crore in green energy to create 1,850 jobs in Pune region.

The government signed an MoU with Rural Enhancers for investment worth Rs 10,000 crore in social sectors including hospitals.

The government inked an MoU with Welspun for an investment worth Rs 8,500 crore in logistics to generate 17,300 jobs.

Essar in partnership with Blue Energy will invest Rs 8,000 crore in green energy to create 2,000 jobs.

Further, United Phosphorus will make an investment of Rs 6,500 crore in green energy to generate 3,000 jobs. The government signed an MoU with Olectra EV for investment worth Rs 3,000 crore in automotive and EV to generate 3,000 jobs.

Kalyani Group will invest Rs 5,250 crore in defence, steel and EV. It will create 4,000 jobs. The MoU was signed in the presence of CM Fadnavis and Vice-Chairman & Joint MD of Bharat Forge Limited Amit Kalyani. “Thank you Amit Kalyani for joining this MoU signing at Davos! This investment is special because it is coming to Gadchiroli, which will give better lives to so many,” said the chief minister.

Gensol will invest Ra 4,000 crore in electronics in Chhatrapati Sambhajinagar to create 500 jobs. The government inked an MoU with & El Mont for the investment of Rs 2,000 crore in infrastructure. It will generate 5,000 jobs. The company director Kabir Bhandari was present.

BookMyShow will invest Rs 1,700 crore in the entertainment sector to generate 500 jobs. Further, the government signed an MoU with Tembo for an investment worth Rs 1,000 crore in the defence sector. It will create 300 jobs. The company director Shabbir Merchant was present on the occasion.

The government also inked an MoU with AB InBev in the F&B segment for investment worth Rs 750 crore. Kartikeya Sharma, President, India & South East Asia of AB InBev was present on the occasion.

Moreover, the government inked an MoU with CEAT Limited for investment worth Rs 500 crore in automotive and EC to generate 500 jobs.

Bisleri International will invest Rs 250 crore in food and beverages in the Mumbai Metropolitan Region to create 600 jobs. The MoU signed paves the way for Maharashtra’s comprehensive growth and development.

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India sees surge in deal activity at record $116 billion in 2024

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1 day ago

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January 21, 2025

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New Delhi, Jan 21: India’s deal-making landscape witnessed a landmark year in 2024, with a record 2,186 deals valued at $116 billion, marking a 33 per cent increase in volumes and 76 per cent surge in values (year-over-year), a report showed on Tuesday.

Driven by India’s status as the fastest-growing G20 economy, with a 7 per cent growth rate driven by robust domestic demand, the country’s deal-making activity reached new heights, defying global economic uncertainty, and demonstrating the resilience of its economy, according to the Grant Thornton Bharat ‘Annual Dealtracker 2024’.

“As we look ahead to 2025, we are optimistic about the prospects for continued robust deal activity, fuelled by government reforms, a stable economy, and a thriving tech ecosystem, making India an attractive destination for investors despite global uncertainties,” said Shanthi Vijetha, Partner, Growth at Grant Thornton Bharat.

The mergers and acquisition landscape witnessed a record-breaking year, with 683 deals valued at $44.1 billion, marking a 37 per cent increase in volumes and a 75 per cent surge in values compared to the previous year.

Domestic consolidation drove growth, with 479 deals amounting to $23.5 billion, a 64 per cent increase in values, led by Indian conglomerates such as Adani Group, Aditya Birla Group and Nazara Technologies.

Outbound M&A also witnessed significant growth, with 121 deals valuing $16.9 billion, driven by two billion-dollar deals, according to the report.

The private equity landscape demonstrated resilience in 2024, with 1,298 deals raising $31 billion, up from 1,046 deals valuing $27.4 billion in 2023.

The year witnessed a 26 per cent rise in high-value deals (estimated at and over $100 million) and two billion-dollar deals.

The initial public offerings (IPO) activity reached unprecedented heights in 2024, defying global economic headwinds, with 86 listings raising a record $21 billion, more than triple the $6.2 billion raised in 2023, said the report.

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