MARKET LIVE: Sensex up 100 pts, pharma stocks gain, banks decline

 The Indian markets were trading with 0.4 per cent gains in the afternoon deals on Wednesday.

Among the headline indices, the S&P BSE Sensex was trading around 38,109 levels and the Nifty50 index hovered around the 11,250-mark. Tata Steel (down 2.5%) was the top Sensex laggard, followed by Power Grid and NTPC (both down over 1%). 

Shares of Reliance Industries rose 1 per cent in early days after the company said that General Atlantic, a leading global growth equity firm, will invest Rs 3,675 cr in Reliance Retail Ventures Limited. READ MORE

The trend among Nifty sectoral indices was mixed, with Nifty Bank index, down 1 per cent, leading the list of losers.

In the broader market, the S&P BSE MidCap and SmallCap indexes were trading 0.2 per cent higher, each.

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02:06 PM 

Rupee Closing

Rupee settles at 73.77 per US dollar vs Tuesday's close of 73.85/$

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Ramco Systems freezes at 5% upper circuit on order win from logistics major

Shares of Ramco Systems were locked in the upper circuit limit of 5 per cent at Rs 426 on the BSE on Wednesday after the company said it has signed up an agreement with a "Global top 5 logistics major" for modernising and transforming its multi-country Payroll operations on the company’s global payroll platform. READ MORE

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HDFC twins, HUL top contributors to Sensex's gain

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NEWS ALERT :: Current Account Surplus for April-June period in FY21 stands at $19.8 bn, says RBI

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Tech Mahindra up 2.6%

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IPO ALERT :: UTI AMC IPO subscribed 43% so far on Day 2 till 1:30 pm

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CV financiers: Favourable valuations, but unpredictable fundamentals

Analysts at Prabhudas Lilladher indicate that collection efficiencies have rebounded to 80 per cent in September compared to 65 per cent last month. Consequently, there is a 15 per cent month-on-month improvement in disbursements as well, though 70 per cent of these disbursements are largely towards existing customers. Fresh loans disbursed could help customers meet intermittent working capital needs crucial to restart their business hit by lockdown. READ MORE

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Nifty FMCG index up 1.7%

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FinCEN files: Almost all Indian banks named for suspicious transactions

 Between 2010 and 2017, a number of Indian banks, irrespective of ownership – public, private and foreign -- helped facilitate transactions red-flagged by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) for suspected money laundering, terrorism, drug dealing and financial fraud, latest leaks suggest.

International Consortium of Investigative Journalism (ICIJ) obtained the top-secret Suspicious Activity Reports or SARs, worth more than $2 trillion globally. These transactions are not outright evidence of frauds or proof of nefarious activities, but are red-flagged by the US authority as suspicious.

While the data dump is available on the organisation’s website, so far it has meticulously tracked down 18,153 transactions totaling $35 billion, in which links between both sending and beneficiary banks have been established. The transactions were done between 2000 and 2017.

In case of India, the FinCEN files so far have established sender-receiver connections for 406 transactions involving all major banks, including the country's largest, State Bank of India.

According to the leaks Indian banks received $482,181,226 from outside the country and transferred from India $406,278,962. These transactions were red flagged to the US authorities.

A few large transactions are worth mentioning here.

Standard Chartered Bank, in a single transaction, transferred Merrill Lynch Bank Suisse Sa $8,173,378 on Jul 9, 2011. Bank of India received $119,548,135 in 19 transactions from DBS Bank between Nov 4, 2015 and Apr 14, 2016.

DBS Bank sent Allahabad Bank $144,248,998 through 26 transactions, between Nov 6, 2015 and Feb 23, 2016. Singapore-headquartered DBS also sent $162,381,261 to Indian Overseas Bank through 21 transactions done between Nov 3, 2015 and Apr 14, 2016.

Deutsche Bank AG sent its local Indian arm Deutsche Bank in India $53,520,418 in two transactions between Oct 25, 2012 and Nov 26, 2012.

India’s HDFC Bank sent Standard Chartered Bank $327,999,890 through 11 transactions between Sep 24, 2012 and Feb 15, 2013.

IndusInd Bank transferred HSBC $8,260,868 between Jun 13, 2008 and Nov 7, 2012 in 55 transactions. State Bank of India (SBI) transferred $5,791,055 to DNB Nor Bank Asa in 9 transactions between Jan 25, 2012 and Oct 9, 2012. SBI received $ 23,325,000 from Rak Bank through 6 transactions done between Mar 2, 2014 and Mar 23, 2014.

State owned Canara Bank received $ 2,761,523 from National Bk of Ras Al Khaimah Psc between Jul 24, 2013 and Nov 7, 2013 through 20 transactions. Bank of India received $11,214,476 from Rizal Commercial Banking Corp in 16 transactions between Jan 13, 2010 and Dec 23, 2010.

The latest transactions traced was where DBS Bank transferred $1,878,000 to Bank of Baroda between Jul 5, 2016 and Jul 5, 2016 in three transactions.

Even a small bank such as Tamilnad Mercantile Bank received $185,626 from Standard Chartered Bank between Dec 9, 2010 and Dec 24, 2010 in three transactions.

So far, ICJI has named these Indian banks in the dubious transactions -- State Bank of India, Punjab National Bank, Union Bank of India, HDFC Bank, Indusind Bank, Axis Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, Indian Overseas Bank, Canara Bank, Bank of Maharashtra, Karur Vysya Bank, Tamilnad Mercantile Bank, Standard Chartered Bank (India operations), Bank of Baroda, Bank of India, Allahabad Bank, Indian Overseas Bank, Indian Bank, Deutsche Bank (India operations), UCO Bank, Karnataka Bank, RBS, Andhra Bank, and Vijaya Bank.

RBI gets more elbow room for bond purchases as banks return borrowed money

 Indian banks are returning money they borrowed from the central bank earlier this year, boosting the monetary authority’s capacity to make more direct purchases of government bonds.

The Reserve Bank of India on Thursday said it would buy 100 billion rupees ($1.4 billion) of bonds from the secondary market on Sept. 24 in the first such direct purchase in six months. This marks a departure from its preference so far this year for Federal Reserve-like Operation Twists.

While direct open market operations end up adding cash to the banking system, twist operations are typically liquidity neutral as they involve simultaneous buying and selling.

Sovereign bonds gained on Friday, with the 10-year yield down 2 basis points to 6.01%.

Traders said there is more scope for direct OMOs now because banks are taking the option to return about 1.25 trillion rupees they borrowed from the RBI in February and March.

These funds were borrowed when the repurchase rate was at 5.15%, making it more attractive for banks to return it now and look to borrow again at a lower rate. So far, about 989 billion rupees has been repaid in four tranches and the remaining money is expected to be repaid Friday.

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This creates more space for OMOs at the same time as a run down in the RBI’s stock of Treasury bills acts as a constraint on twist operations, said Shailendra Jhingan, chief executive officer at ICICI Securities Primary Dealership Ltd. In Mumbai.

The RBI has to keep an eye on how much surplus banking liquidity it wants amid rising inflation. Consumer prices rose 6.7% in August, exceeding RBI’s upper limit of 6% for a fifth month.

The central bank has been largely trying to keep yields anchored around 6% via its Operation Twists, discreet purchases and auction signaling, traders say.

“The RBI has kept banking liquidity in a surplus of 6-7 trillion rupees in the past three-four months,” said Pankaj Pathak, a fixed income fund manager at Quantum Asset Management Ltd. in Mumbai. “If it wants to maintain similar levels of liquidity, it will open up space for 1-1.5 trillion rupees of OMO.”

India Inc seeks cut in import duties to tackle disruptions by coronavirus

Indian business leaders are demanding cuts in import duties on antibiotic drugs, mobile parts and other items as the outbreak of the coronavirus has disrupted supplies from China, government and industry officials said.
The outbreak of the virus in China has hit India's manufacturing and exports of medicines, electronic, textile and chemicals as China is the biggest source of intermediate goods, worth $30 billion a year, according to a presentation by the Confederation of Indian Industries (CII), seen by Reuters.

The confederation will show the presentation on Tuesday when Finance Minister Nirmala Sitharaman meets more than 200 business leaders to assess the impact of the coronavirus and discuss plans to contain the damages.
The government should "remove higher import duties on certain products, primarily imported from China" but available in other countries, the presentation by the CII said.
ALSO READ: Coronavirus in China will cut iPhone production, Apple warns investors
"The government may offer credit with a backstop facility of guarantee for companies which have the capability to start immediate production of items that can feed into domestic consumption," it said.
The coronavirus outbreak, which has now killed more than 1,800 people in China, has disrupted supplies of raw material to other countries.
"India sources about 65-70% of active pharmaceutical ingredients and close to 90% of certain mobile phone parts from China," a presentation by another industry chamber, which represents more than 250,000 companies but did not wish to be identified, said.
Ratings agency Moody's said on Tuesday that the coronavirus outbreak added to pressures on growth in Asia, with the impact felt primarily through trade and tourism, and for some sectors through supply-chain disruptions.
Moody's cut its economic growth forecast for India to 5.4% for 2020 from an earlier estimate of 6.6%, and to 5.8% for 2021 from 6.7%, saying the revisions were also affected by weakening domestic demand.
"Overall, the impact of coronavirus on industry has been moderate so far," said an industry official, who declined to be named, adding the impact could continue for at least two quarters.
ALSO READ: Coronavirus LIVE: Wuhan hospital director dies of COVID-19, 72,436 infected
Daara Patel, secretary general of the Indian Drug Manufacturers Association, which represents over 900 drug producers, said the industry was facing rising prices of raw material and supply shortages.
"The prices of some antibiotics, vitamins and other medicines have gone up by 15-50% following fear of disruption in supply of ingredients," he said.
The pharmaceuticals industry is concerned that stocks of active ingredients for drugs like paracetamol, ibuprofen, could last for 15 days and for two-three months for other drugs, the presentation by the unnamed industry chamber showed.

IOC Q3 net triples to Rs 2,695 cr as inventory gains offset lower margins

IndianOil Corp (IOC), the nation's biggest oil firm, on Thursday reported tripling of its net profit in December quarter as inventory gains offset lower refinery margins and forex losses.
Standalone net profit in October-December at Rs 2,339.02 crore, or Rs 2.55 per share, was higher than Rs 716.82 crore, or Rs 0.76 per share, net profit in the same period in the previous year, IOC Chairman Sanjiv Singh said.

"The variation is majorly on account of inventory gain during the current quarter against inventory loss during the corresponding quarter of the previous financial year, partly offset by lower refining margins and exchange losses during the current quarter," he said.
The company had an inventory gain of Rs 1,608 crore in the three month period as compared to an inventory loss of Rs 8,523 crore in the third quarter of 2018-19 fiscal, he said, adding that the company's net refinery margin stood at $2.15 per barrel in Q3 as compared to $5.12 a year ago.
Inventory gain arises when a company buys raw material (crude oil in case of IOC) at a particular price, but by the time it is shipped to India and processed into final product (fuel), international prices would have moved up. Since fuel prices are benchmarked at prevailing international rates, an inventory gain is booked. Inventory loss happens if the reverse occurs.
IOC had a forex loss of Rs 182 crore as compared to Rs 2,804 crore foreign exchange gain a year back, he said.
Revenue from operations dropped to Rs 1.44 trillion in October-December 2019 from Rs 1.60 trillion in the same period of the previous year.This, Singh said, was due to lower oil prices. The company's consolidated net profit in October-December stood at Rs 2,695.09 crore.
For the third quarter of 2019-20, IOC's product sales volumes, including exports, stood at 23.409 million tonnes. The refining throughput was 17.496 million tonnes and the throughput of its countrywide pipeline network was 20.962 million tonnes during the same period.
In the first nine months of current fiscal, IOC earned a net profit of Rs 6,499 crore on revenue of Rs 4.27 trillion as compared with Rs 10,795 crore net profit in April-December 2018 on a revenue of Rs 4.61 trillion.
"IOC sold 67.490 million tonnes of products, including exports, during the first nine months of the financial year 2019-20. Our refining throughput for the first nine months of FY 19-20 was 52.316 million tonnes and the throughput of the Corporation's countrywide pipeline network was 64.562 million tonnes during the year. The gross refining margin (GRM) during the first nine months of FY 19-20 was $3.34 per barrel as compared to $5.83 per barrel in the corresponding period of the previous financial year," he said.

India Inc garners Rs 8.7 trn from markets in 2019, debt preferred route

Marking a major upswing in fund raising activities, Indiancompanies garnered Rs 8.7 trillion from domestic and overseas markets in 2019 -- up 20 per cent from the previous year -- with debt instruments remaining the most preferred route for financing business needs.
Fund raising scenario in 2020 will depend mainly on the state of the market, economic growth, US-China trade war and the Union budget, said V K Vijaykumar, Chief Investment Strategist at Geojit Financial Services.

There will be good appetite for debt markets in the new year too due to falling interest rates in the country and RBI making external commercial borrowings (ECBs) more attractive for several sectors, including non-banking finance companies (NBFCs), by tweaking several norms like maturity period and end-use stipulation, said Gaurav Sood, co-head of equity capital market at ICICI Securities.
Out of the cumulative Rs 8.68 trillion garnered this year, a large chunk or over Rs 6.2 trillion has been mopped up from the Indian debt market, Rs 1.2 trillion from overseas bonds, and the remaining Rs 1.25 trillion came from equity markets, data compiled by analytics major Prime Database showed.
In 2018, firms had raised Rs 7.25 trillion, including nearly Rs 6 trillion through debt markets, over Rs 79,300 crore from equities and close to Rs 46,500 crore from overseas route.
The funds have been mopped-up mainly for business expansion plans, loan repayments and to support working capital, while a large amount raised from initial public offerings (IPOs) also went to the promoters for sale of their holdings.
Of the total Rs 6.2 trillion mopped up through Indian debt markets, over Rs 6 trillion came from private placement and Rs 16,425 crore through public issuance.
Vijaykumar said fund raising through debt is preferred when interest rates are low. With 10-year bond yield hovering around 6.9 per cent, raising debt is attractive and the excess liquidity in the system ensures raising funds through debt is easy for good companies.
"Overall if you see globally and in India, debt capital raised is always significantly higher than equity as eligible unlisted firms can also raise debt through various mechanisms like public issue, private placement, overseas bonds and ECB, thereby expanding the universe of companies," said Sood. "Also, we need to understand that cost of equity in India has been higher than cost of debt which makes issuers raise equity very conservatively."
Sood further said that overseas bonds particularly have been popular with large corporates, given the low interest rates in the US and Europe.
In equity market, funds mostly came from issuance of shares to institutional investors, rights issue and offer-for-sale route through stock exchange mechanism, primarily due to volatile markets as such routes for raising funds are less preferred in stable markets.
Within the equity segment, rights issue of shares to existing shareholders helped raise Rs 52,000 crore, QIP or Qualified Institutional Placement accounted for Rs 35,238 crore, Offer for Sale (OFS) through stock exchange mechanism got Rs 25,811 crore, and IPO added Rs 12,975 crore, including for small and medium enterprises (SMEs).
A total of 16 main-board IPOs mopped-up Rs 12,365 crore and SME IPOs brought in Rs 610 crore.
This was way below than Rs 30,959 crore raked in through main-board IPOs and Rs 2,287 crore via SME segment in 2018.
"The sharp plunge in fund raising through IPOs could be attributed to negative market sentiment, low valuation coupled with lack of liquidity with equity investors who are sitting with losses on their portfolio," Sridhar Ramachandran, CIO at IndiaNivesh Renaissance Fund said.
In addition, PSU divestment took away the liquidity from the system, he added.
Apart from these factors, Sood said political uncertainty, slowdown in economy, US-China trade war and liquidity crises in NBFCs also impacted IPO activities.
"We also have to factor the various alternate sourcing of finance available to companies like private equity, who give superior valuation to companies over the public market investors and have higher risk appetite," he added.
While in terms of quantum there were few IPOs, there was strong investor appetite for companies across sectors like technology, high-quality BFSI companies, renewables, consumer, hospitality and healthcare.
Companies that came out with IPOs in 2019 included Sterling & Wilson Solar (Rs 3,125 crore), Chalet Hotels (1,641 crore), Spandana Sphoorty Financial (Rs 1,200 crore), Ujjivan Small Finance Bank (Rs 750 crore) and Indian Railway Catering and Tourism Corporation (Rs 645 crore).
Sebi Chairman Ajay Tyagi said that IPOs should be priced rightly in order to attract retail investors. "We want retail participation to grow but investment banks have to ensure that IPOs are priced rightly," he added.
Vijaykumar said that quality of IPOs was good and consequently most of the IPOs listed in 2019 are trading above their issue prices.
IPOs, on average, listed 20 per cent above issue prices, although IRCTC was the exception with above 100 per cent listing gains.
Going head, Vijaykumar said the IPO market is likely to witness a continuation of the 2019 trend next year. We will not see large number of IPOs but quality is likely to be good.
Also, 12 companies tapped the rights issue route to collectively raise Rs 52,000 crore in 2019, while 13 firms had opted the mode last year and garnered Rs 18,826 crore.
Two large issues in telecom sector accounted for the most of the fund raising through the mode in the year. Vodafone Idea raised Rs 25,000 crore through rights issue, while the same for Bharti Airtel stood at Rs 24,939 crore.
Besides, firms mobilised Rs 35,238 crore through QIPs in this year, which was significantly higher than Rs 16,587 crore raised in 2018.
The largest QIP of 2019 was from Axis Bank that raised Rs 12,500 crore.
In addition, funds mop-up via OFS route -- used for dilution of promoters' holdings -- climbed to Rs 25,811 crore in 2019 from Rs 10,672 crore in the preceding year. Of this, the government's divestment accounted for Rs 5,871 crore.
The largest OFS was that of Axis Bank (Specified Undertaking Of The Unit Trust of India) in February (Rs 5,358 crore), followed by SBI Life Insurance (Rs 3,524 crore) and HDFC Life Insurance (Rs 3,366 crore).

Modi govt risks losing focus on economy as protests build: Analysts

A new law on Indiancitizenship is threatening to pull Prime Minister Narendra Modi’s focus away from a flagging economy as protests and criticism builds against the divisive plan.
The government was forced to call in the army to quell protests in some parts of the country this week after the parliament passed legislation that will prevent undocumented Muslim migrants from three neighboring countries becoming citizens. The change to the law has been criticized by opposition parties as well as by a U.S. federal commission, who say India is moving away from the values of its secular constitution.
ALSO READ: Normal life hit in parts of Nagaland in shutdown against citizenship law
“There is an economic cost attached to all this, given all the violence that is taking place,” said Amitabh Dubey, an analyst at TS Lombard in New Delhi. Modi’s Bharatiya Janata Party is fulfilling the promises made to supporters who brought it back to power with a bigger mandate and “it isn’t surprising that they have dropped the ball on turning around the economy and focusing on delivering what they think is more important and which will reap political dividends for them.”
Less than a month ago, Modi’s government was ramping up programs to help boost economic growth from a six-year low of 4.5%. His administration announced the biggest privatization drive in more than a decade, weeks after cutting corporate taxes by $20 billion and taking steps to prop up weak banks.
At the same time, the Reserve Bank of India has cut interest rates five times this year to support growth. Still, there’s little sign of a revival with consumer demand and investment remaining weak.
“The focus on the social agenda has come at the expense of the economic agenda,” Akhil Bery, South Asia analyst at risk consultancy Eurasia Group, wrote in a note. “The government has been relying on the Reserve Bank of India to cut interest rates in order to boost liquidity in the system, but has so far, not focused on major economic reforms to cut red tape and boost investment.”

ALSO READ: India must honour religious freedom, says US about Citizenship law
The door for further central bank rate cuts is closing, with policy makers last week keeping interest rates unchanged after a spike in inflation took them by surprise.
The protests over the citizenship law risks taking the government’s attention away from immediate problems facing the economy. Unemployment is at a more than four-decade high, a drag on consumer confidence and spending in an economy where consumption makes up about 60% of GDP.
The new law “takes the focus away from important economic issues,” said Prabhat Patnaik, an economist and a professor emeritus at the Jawaharlal Nehru University in New Delhi. “The more you have disruptions to normal life, the more the impact on economy and production.”
(With assistance from Shruti Srivastava.)

IOC September quarter net profit slumps 83% at Rs 563.4 crore

State-owned Indian Oil Corp (IOC) on Thursday reported a 83 per cent drop in second quarter net profit on the back of slump in refinery margins and inventory losses. Net profit in July-September at Rs 564 crore was 82.6 per cent lower than Rs 3,247 crore net profit in the year-ago period, IOC Chairman Sanjiv Singh told reporters here.
"The major reason for the decline in net profit was inventory losses in Q2 as against inventory gain during corresponding quarter of previous year," he said.

The company earned $1.28 on turning every barrel of crude oil into fuel in July-September as compared to gross refining margin of $6.79 per barrel in Q2 of previous fiscal. Without accounting for inventory losses, the GRM was $3.99 per barrel. He said the company recorded an inventory loss of Rs 1,807 crore in the quarter as opposed to an inventory gain of Rs 2,895 crore.
A company suffers inventory loss when it buys raw material (crude oil case of IOC) at a particular price but by the time it is able to ship it and process it into fuel, global rates would have fallen. Because pump rates are benchmarked at prevailing international rate, it books an inventory loss. Inventory gain are booked if reverse happens.
He said the company also had a forex loss of Rs 1,135 crore in the second quarter. Turnover slipped to Rs 1.32 lakh crore from Rs 1.51 lakh crore due to dip in prices. Petroleum product sales was 21.4 million tonnes, while refinery throughput was 17.5 million tonnes in the September quarter.

Indian economy to grow at slowest pace in 5 years in June quarter: Poll

The Indian economy likely expanded at its slowest pace in more than five years in the April-June quarter, driven by weak investment growth and sluggish demand, according to economists polled by Reuters.

That would reinforce concerns seen in the minutes from the central bank's August meeting, which showed policymakers were worried about weak growth and indicated further rate cuts in the next few months to boost the slowing economy.


The poll median showed the economy was expected to have grown at a year-on-year pace of 5.7 per cent in the June quarter, a touch slower than 5.8 per cent in the preceding three months. But a large minority - about 40 per cent of nearly 65 economists - expect an expansion of 5.6 per cent or lower.

The GDP data is due to be released at 12:00 GMT on Friday.

If the forecast is realised, it would be the weakest start in the first three months of a fiscal year in seven years.

"The deceleration in growth that commenced in the second quarter of the fiscal year ending March 2019 is likely to have continued," said Rini Sen, India economist at ANZ.

"A host of high frequency indicators - consumption and investment - have continued to weaken. The most prominent ones include auto sales, output of consumer durables, cement and steel production."

Domestic passenger vehicle sales in July dived at the steepest pace in nearly two decades and declined for the ninth straight month in July, largely due to a liquidity crunch causing huge job cuts in the sector.

These measures, in addition to the risk of further escalation of the US and China trade war are weighing on demand and business confidence in India.

The median response to an extra question in the poll, which was taken Aug. 21-26, showed the average growth rate for the current fiscal year 2019-2020 is likely to be 6.5 per cent despite a weak start. But it is a downgrade from 6.8 per cent predicted just last month and well below the RBI's projection of 6.9 per cent.

The RBI lowered its outlook for the fiscal year 2019-2020 at its August meeting. It has cut a total of 110 basis points in the repo rate since February, which includes an unconventional cut of 35 basis points earlier this month to 5.40 per cent.

But with inflation not expected to rise anytime soon, the central bank will likely ease its benchmark rate by 25 basis points again to 5.15 per cent at its October meeting, followed by a 15 basis points cut in the first quarter of 2020, according to a separate Reuters poll. [RBI/INT]

Those cuts, in addition to a suite of recently announced fiscal measures, could provide some cushion for the economy in coming months.

On Friday, Finance Minister Nirmala Sitharaman announced reforms to revive economic growth, including rolling back recent tax hikes on foreign and domestic equity investors and several measures for industries.

"We believe that the measures announced by the finance minister will help to provide a fillip to credit growth, rate transmission and improving investor sentiment," noted economists at Morgan Stanley.

"We continue to see a slow recovery in growth, as monetary measures will help but may not be sufficient to create a V-shaped recovery, especially in the context of slowing global growth."

Rupee crashes to over 8-month low of 71.81 on foreign fund outflows

The Indian rupee on Thursday plunged to an over eight-month low of 71.81, dropping 26 paise against the US dollar as tumbling equities and incessant foreign fund outflows weighed on sentiment.
Also, the sudden drop in Chinese yuan led to increased volatility in emerging market currencies, including the rupee, forex dealers said.

At the interbank foreign exchange, the Indian currency opened weaker at 71.65 a dollar and went on to touch the day's lowest level at 71.97. It finally settled at 71.81, down 26 paise against the American currency. This was the lowest level for the rupee since December 14, when it had closed at 71.90.
On Wednesday, the Indian rupee had closed at 71.55 a dollar.
Bringing the rupee under more pressure, the global crude benchmark Brent Futures rose 0.75 per cent to trade at USD 60.75 per barrel on Thursday.
Adding to rupee woes, the dollar index -- which gauges the greenback's strength against a basket of six currencies -- rose 0.02 per cent to 98.31.
The 10-year Indian government bond yield was down at 6.56 per cent on Wednesday.
Meanwhile, foreign investors pulled out Rs 902.99 crore from Indian equities on Thursday, as per exchange data.
"Indian rupee falls to its lowest level since December 14, 2018, mirroring a sudden drop in Chinese yuan and a fall in domestic equity. The mood of the market changed after the chief economic advisor said no need for stimulus. Rupee fell as much as 0.6 per cent to 71.9750 while Chinese yuan drops as much as 0.40 per cent, most since August 7, to 7.0933 a dollar," V K Sharma, Head PCG & Capital Markets Strategy, HDFC Securities, said.
The dollar index edged higher today after minutes from the Federal Reserve's July meeting showed most policy makers viewed their interest-rate cut as part of a mid-cycle adjustment, while they remained confident in a sustained US economic expansion, he said.
Meanwhile, the Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.5508 and for rupee/euro at 79.3942. The reference rate for rupee/British pound was fixed at 86.8913 and for rupee/100 Japanese yen at 67.20.

India, US trade talks end in Delhi without major progress: Report

U.S. and Indian trade negotiators ended talks on Friday without making major progress on a range of disputes over tariffs and other protectionist measures imposed by both sides that are straining bilateral ties, according to officials with knowledge of the discussions.
Many of the toughest questions on agricultural commodities, e-commerce, and steel and aluminum, have been put off until Commerce and Industry Minister Piyush Goyal goes to Washington for talks with United States Trade Representative Robert Lighthizer next month. The dates for that trip are yet to be settled.

"No breakthrough," said one of the senior Indian officials involved in the talks in New Delhi, which lasted a little over three hours. He declined to make any further comment.
Two other Indian officials said they hoped that some of the issues will be resolved when Goyal goes to Washington. Friday's talks were more about understanding each other's positions in various disputes, they said.
In a short statement issued late on Friday, the Indian government said the countries agreed to continue their discussions for "addressing mutual trade concerns".
The two sides resumed talks after U.S. President Donald Trump and Prime Minister Narendra Modi met on the sidelines of the G20 summit in June and agreed to seek to deepen the two countries' relationship.
Trump said at that summit that there would be a "very big trade deal" with India, though he set no timeline, and has only this week used Twitter to attack what he calls high Indian tariffs on American goods as "no longer acceptable".
Tit-for-tat moves
The U.S. sought the rollback of Indian tariffs imposed on some agricultural products, such as almonds, when the two sides met on Friday, said one of the Indian government sources.
Those tariffs were imposed in response to the Trump administration's decision to remove trade privileges from Indian products under the Generalized System of Preferences. India has asked for those privileges, effectively zero tariffs on a range of Indian products entering the United States, to be reinstated.
India did not commit to any changes to foreign investment rules for foreign e-commerce firms such as Walmart's Flipkart and Amazon, one of the Indian sources said.
The rules have forced the two American companies to rework their business strategies for India. Walmart told the U.S. government privately in January that India's new investment rules for e-commerce were regressive and had the potential to hurt trade ties, Reuters reported on Thursday.
One concern now among Indian policymakers is that the Trump administration may push for a free trade agreement with India that could dent India's competitiveness, lead to a flurry of imports and hurt Modi's "Make in India" plan.
In a recent meeting, Foreign Minister Subrahmanyam Jaishankar told trade ministry officials that "Trump is clearly preparing for a larger game, a larger opening", according to one of the officials aware of the discussions.

Eco survey calls for raising retirement age, merging schools as India ages

The Indian government on Thursday warned in a study that its population is going to start to age and it needs to be prepared to merge schools and raise the retirement age.
While India should be set to benefit from the so-called “demographic dividend” over the next decade as its working population is set to increase by about 9.7 million a year between 2021-31, that will quickly fade as the nation’s fertility rate plunges below replacement level.

The conclusions in the study, “India’s Demography at 2040: Planning Public Good Provision for the 21st Century,” will have major implications for many companies, particularly those that have been eyeing consumer demand from India’s young population.
It said the number of children in the 5-14 age bracket will decline significantly, leading to the need for school mergers and less focus on building new ones.
Already states such as Himachal Pradesh, Uttarakhand, Andhra Pradesh and Madhya Pradesh have fewer than 50 students enrolled in more than 40 percent of their elementary schools, according to the study, which was included in the government’s annual Economic Survey.
ALSO READ: India must double infra spending, harness private investment: Eco Survey
It also said that policymakers need to prepare for an increasing number of elderly people, estimating there will be 239.4 million Indians over the age of 60 in 2041 against 104.2 million in 2011.
“This will need investments in health care as well as a plan for increasing the retirement age in a phased manner,” concluded the study, which was authored by India’s Chief Economic Adviser Krishnamurthy Subramanian and his team of economists.
The current retirement age for most government workers in India is 60.
Meanwhile, the number of Indians aged between 0-19 has already started to decline and the proportion of the population in that age group is projected to fall to 25 percent by 2041 from 41 percent in 2011.
The demographic dividend that is talked about in India refers to the current situation where the nation’s labor force is growing quicker than the rest of the population it supports.
If the newcomers to the labour market get well-paid jobs it boosts consumption and economic growth.
ALSO READ: Gross tax to GDP ratio declined to 10.9% in FY19: Economic survey

Economic activity clearly losing traction, says Shaktikanta Das at MPC meet

The Indian economy has been clearly losing traction and needs a decisive monetary policy to promote growth, said Reserve Bank of India Governor Shaktikanta Das while voting for a 25 basis points (bps) rate cut along with other five members at the MPC meet earlier this month.
Das, as per the minutes of the June 3-6 Monetary Policy Committee, said that since the last meeting of the rate-setting panel in April 2019, greater clarity has emerged about the evolving macroeconomic situation.

The RBI released the minutes of the meeting Thursday.
Overall, there is clear evidence of economic activity "losing traction" with the GDP growth in the fourth quarter of the last financial year slowing to 5.8 per cent, he said.
"In sum, growth impulses have clearly weakened, while the headline inflation trajectory is projected to remain below 4.0 per cent throughout 2019-20 even after considering the expected transmission of the past two policy rate cuts.
"Keeping in view the evolving growth inflation dynamics, there is a need for decisive monetary policy action. Hence, my vote is to reduce the policy repo rate by 25 basis points," he said.
He also favoured shifting the stance of monetary policy from neutral to accommodative to send a clear signal, indicating that more measures could be taken in the near future to boost growth.
It was for the third time in a row that the RBI cut the key lending rate (repo) by 25 bps.
MPC member and RBI Deputy Governor Viral Acharya said the mixed picture on economic growth has morphed into one where at least some aspects have weakened considerably over the past two quarters. He also flagged some upside risks, including deficiency in monsoon and volatality in crude oil prices, to inflation.
"In spite of my dilemma, I vote albeit with some hesitation to frontload the policy rate cut from 6 per cent to 5.75 per cent..." the minutes quoted him as saying.
Another member and Executive Director Michael Debabrata Patra said the risks to the primary target of monetary policy are distinctly on the ebb.
Inflation expectations, he said, are also better anchored than before.
"In fact, if one were to step back a little in time, it is evident that if the 2019-20 projections materialise, the MPC would have steered inflation at or below target on average for four years in a row in its five-year term of office," he said.
Other three members of the MPC -- Ravindra H Dholakia, Pami Dua, and Chetan Ghate -- also voted in favour of reducing the key lending rate.
Das also said quite a sizable part of loan portfolio of banks continues at the base rate, which impedes monetary transmission.
Interest rates on small savings are also higher than the prescribed formula, he said.
The transmission of the cumulative reduction of 50 basis points in the policy repo rate in February and April 2019 to fresh rupee loans has been 21 basis points.
However, the weighted average lending rate on outstanding loans has increased by 4 basis points.
"Going forward, the transmission is expected to improve, given the lags with which banks adjust their deposit and lending rates in response to changes in the policy rate," the RBI governor said.

Time to take money out of India's stocks, says SBI Life Insurance CIO

After a rally of about 10% in Indian stocks over the past year, the nation’s second-biggest life insurer has one message for investors: it’s time to take some profit.
“It’s time to take some money out of equities because valuations are looking stretched,” Gopikrishna Shenoy, chief investment officer at SBI Life Insurance Co., which has most of its equity assets in larger stocks, said in an interview at his office in Mumbai. “There’s no immediate indicator of a return to sound earnings growth and it will take some time,” he said.

Uncertainty about the poll outcome that culminated in Prime Minister Narendra Modi’s re-election last month prompted investors to shift into shares of top Indian companies over the past 18 months from their smaller counterparts. During the period, the key S&P BSE Sensex and NSE Nifty 50 indexes rose at least 12%, while the NSE measure of mid-sized companies fell by 15% and a small-cap gauge plunged 29%.
As the euphoria generated by Modi’s re-election settles down, investors are turning their attention to how the new government plans to bolster a slowing economy and curb a cash crunch that has led to some companies delaying or defaulting on interest payments.
Shenoy, who oversees nearly 1.4 trillion rupees ($20 billion) of assets -- of which 23% is in equities, has reduced his shareholdings in top automakers, cement producers and consumer-staples companies. The life insurer also sold some shares in software exporters, barring the top two.
Still, he’s looking to reinvest the cash back into equities. Even as SBI Life continues to remain upbeat on banking stocks, it plans to buy into any dip in consumer and automobile stocks, mainly those of utility vehicles and motorbike makers, as it sees a recovery in demand from this year’s last quarter.
SBI Life expects earnings at India’s top 50 companies to rise as much as an average of 14% in the financial year that started April 1, boosted mainly by banks as they’re expected to set aside fewer provision for bad debts as non-performing loans fall.
The insurance firm has reduced its holding in shares of mid-sized companies in its equity funds to 9% from about 22% in 2017 and doesn’t see any immediate reason to change the balance. “We see a lot of value in mid-caps, but we won’t make a major shift to them, at least for the time being,” Shenoy said.
SBI Life held 2.1% of India’s total 331 million life insurance policies as of March 31, 2018, according to the latest data on the insurance regulator’s website, second only to state-owned behemoth Life Insurance Corp. of India’s nearly 88% share.

Pak officials harass guests invited to Indian High Commission's Iftar party

Guests invited to Indian High Commission's Iftar party in Islamabad on Saturday evening faced "unprecedented level of harassment" due to enhanced security checks by the Pakistani officials who stopped some invitees on one pretext or other.
Indian High Commissioner Ajay Bisaria hosted the annual event at Serena Hotel for which guests were invited from all over Pakistan.

Those attending the event said that additional security deployment was made around the luxury hotel.
A journalist said that he saw more than usual security presence but those having invitation cards and identity documents were allowed to attend.
"My invitation card was checked and I was asked questions about profession and residence, and allowed to go in," he said.
"Unprecedented level of harassment at @serena_hotels Islamabad. #India embassy iftaar happening & police & anti terrorism force misbehaving with anyone trying into get in the hotel. Got screamed at, my driver abused. Sorry, not being an entitled prick. This was genuine harassment," tweeted noted journalist Mehreen Zahra-Malik.
Another journalist, on condition of anonymity, told PTI that he did not attend as he feared about questioning and security checks.
He also said that there were reports that some invitees were called by anonymous callers and told not to attend the event.
Senior Pakistan People's Party leader Farhatullah Babar said that every gaze deflected towards odd visitors in hotel's lobby.
"Came to Serena for iftar hosted by Indian HC. Hotel seems barricaded. Told that iftar cancelled. When insisted, I was told to use other gate. Other gate also closed and told to go back to front gate again. What's going on, something fishy," he tweeted.
Babar said that he somehow managed to attend the Indian mission's iftar despite efforts by the local authorities to stop invitees on one pretext or other.
High Commissioner Bisaria in his brief address to the audience said that some of the guests could not make to the party.
"I want to apologize because some of you faced a lot of trouble to come here and some of our friends could not come," he said.
Bisaria also said that people had come from Lahore and Karachi to attend the event and thanked them for coming.
India has not been engaging with Pakistan following the attack on the Air Force base at Pathankot in January of 2016, maintaining that talks and terror cannot go together.
Tensions flared up between the two sides after a suicide bomber of Pakistan-based Jaish-e-Muhammed killed 40 CRPF personnel in Kashmir's Pulwama district on February 14.
Amid mounting outrage, the Indian Air Force (IAF) carried out a counter-terror operation, hitting the biggest JeM training camp in Balakot, deep inside Pakistan on February 26. The next day, Pakistan Air Force retaliated and downed a MiG-21 in an aerial combat and captured an IAF pilot, who was handed over to India.

India's working capital is vanishing and the next PM will need to find it

Ask any small Indian firm how long it takes to get paid by larger companies, what kind of a runaround they’re given, what devilish excuses they encounter on the way, and you’ll wonder how they remain in business.
The answer is simple: They raise cash by borrowing against the value of property.
Such advances are tailor-made for the entrepreneur. A term loan for business expansion sometimes comes bundled with a working capital limit, all of it backed by the entrepreneur’s residential or commercial property, preferably self-occupied and in a big city.
Conceptually, there’s nothing wrong here. Peruvian economist Hernando de Soto’s key insight was that poor countries become rich when their toiling masses have clean, marketable titles to property they can mortgage to start businesses.
The problem with the Indian loan against property is more to do with the lenders than the borrowers. Like with most credit creation in India in the past few years, banks have ceded space even here to nonbank, or shadow, lenders.
Shadow lenders got cheap funds from wholesale markets, including mutual funds. They gave credit to small businessmen who then refinanced their loans even more cheaply by going to another shadow lender (I noted in January 2017 that yields on loans against property had fallen by 300 basis points in just 12 to 18 months).
Growth in shadow lenders has spurred from a sudden collapse of IL&FS Growth in shadow lenders has spurred from a sudden collapse of IL&FS
Trouble started when the sudden bankruptcy last year of infrastructure financier-operator IL&FS Group triggered a crisis of confidence and raised funding costs for India’s shadow lenders. Since then, the ultimate borrower has been hit by a triple whammy of higher interest rates, fewer refinancing options, and a souring of sentiment among lenders about the collateral. Real-estate valuations are under stress because developers, which themselves need large dollops of refinancing, aren’t getting any.
It used to be that entrepreneurs would take out loans for 10 years to 15 years against property and refinance them in three to five. Now they can’t, so defaults are rising. India Ratings and Research Pvt, a unit of Fitch Ratings Inc., saw delinquencies beyond 90 days increase to 1.77% in January 2019 from 1.05% in January 2018. If these numbers appear low that’s only because the loans that get turned into securities (and are seen by rating firms) are of higher quality. Riskier borrowers, who pawn their homes to more adventurous lenders, are faring far worse.
TransUnion CIBIL, a credit registry, put the size of India’s loans-against-property market at the end of last year at 3.84 trillion Rupees ($55 billion). However, growth in origination of new loans, in money terms, crashed from 54% in the final quarter of 2017 to 11% in the three months through September, when IL&FS blew up. It may have fallen further since then. Slower origination means even more defaults in future because stressed borrowers won’t get refinancing so easily.
Deceleration in loans against property Deceleration in loans against property
And borrowers are stressed. Car and SUV sales in India had their worst slump in almost eight years in April. Even soap and biscuit makers are struggling to eke out volumes. These are big, publicly traded companies, whose first response in tough times is to shorten their own working capital cycle by lengthening it for their suppliers – the smaller firms. The response of a government that’s desperate to boost its tax kitty will also be to delay refunds to firms in the supply chain.
A $55 billion source of working capital slipping out of the reach of small firms will trigger a chain reaction. Investors aren’t prepared for it. As India watchers wait for May 23 to see who gets elected as the next prime minister, probably the bigger question is what comes next for finance. Someone will have to fix this broken engine, and quickly.

Elections 2019: Pollution becomes an issue with promises made in manifestos

Promises to fight the world’s most toxic air have made it to the manifestos of major political parties for the first time in Indian elections. Major political parties such as the ruling Bharatiya Janata Party, the opposition Indian National Congress and the Aam Aadmi Party have pledged to combat the crisis by taking measures ranging from setting deadlines, introducing new emission standards to promoting electric vehicles in a bid to fight toxic air.
That is a change from the 2014 elections when none of the party manifestos had any mention of clean air or pollution.
India, home to world’s top ten cities with the worst air quality, has been struggling to contain a deadly haze that killed an estimated 1.24 million citizens in 2017. In the past, governments have pledged millions of dollars and deployed extra teams to enforce existing environmental laws that include banning farmers from burning their fields. But the sheer scale of India’s toxic skies has made progress difficult.

Air pollution on the agenda
The ruling BJP’s election manifesto promises to focus on 102 most polluted cities in the country. “We will reduce the level of pollution in each of the mission cities by at least 35 percent over the next five years,” it says, lauding itself for “effective steps” taken to reduce the level of pollution.
The Congress party manifesto calls air pollution a national public health emergency. It promises to strengthen the National Clean Air Program to tackle pollution. “All major sources of emission will be targeted, mitigated and reduced to acceptable levels,” it says.
The manifesto of the Aam Aadmi Party, which runs the government in the national capital of New Delhi, promises induction of electric buses and vacuum cleaning of roads, among other measures to address the pollution problem. In order to control smog in Delhi, the AAP implemented a program in 2015 to arrest vehicular emissions through traffic controls.
It is a ‘‘good sign’’ that political parties haven’t ignored air pollution, according to Anumita Roy Chowdhury, executive director of research at advocacy group Centre for Science and Environment. “The intent and the purpose have to get much clearer and sharper through strong political mandate for real action afterwards,” she said in a phone interview.
A recent study by The Lancet found 77 per cent of India’s 1.4 billion people exposed to air far dirtier than recommended limits. The poor are the worst hit by pollution, according to The Lancet.
The bigger political parties’ focus on pollution should eventually trickle down to manifestos and agendas of regional parties, according to Hem Himanshu Dholakia, senior research associate at the Council on Energy, Environment and Water. “Air pollution can be solved through action by both the center and states in terms of tackling local sources, for example, waste burning, which will require more action from local bodies,” Dholakia said.
The South Asian nation’s deadly air, especially in winter, is caused due to a combination of farm stubble burning, firecrackers, vehicular emissions and weather conditions.

India's handset industry may go past the 300-mn unit mark in 2019

Living up to its reputation of making records, the Indian handset industry may add another feature to its cap in 2019.
The local market, bustling with new entrants and frequent launches, is expected to go past the 300-million-unit mark this year.

The feat, if achieved, would help India run close the annual 400-million plus Chinese market, which is the biggest in the world.
India, which has second position in the global mobile handsets market, is projected to grow to 302 million units this year, according to analyst firm TechArc.
While during the past seven years — between early 2012 and the end of 2018 — the local market grew in double digits, 2019 could be the first year in a while when the overall growth rate could come down to 3.4 per cent because falling sales of basic feature phones may dent the industry growth rate.
However, the newly emerging smart feature phones segment may take the lead. A segment, primarily represented by Reliance’s Jio Phone, which offers easy access to the internet through a modified feature phone platform, may corner more than 18 per cent of the local handsets market.
Projected to grow at 15 per cent in 2019, the smart feature phone market could finally offer a gateway to the web-world for price-sensitive consumers in the country.
The fast-growing smartphones market is expected to gain more steam. While between 2016 and 2018 it grew by some 10 per cent, in 2019 it is projected to grow at 11 per cent to be close to 150 million from 135 million in 2018.
Currently, only three markets — China, the US, and India — sell over 100 million smartphones a year.
Renewed vigour in the smartphone space is expected to be backed by frequent technological innovations.
According to analysts, most of the growth in the smartphone space will come from existing users, who will be lured to upgrade their handsets as new features and technologies turn existing features redundant.
According to Will Yang, brand director, OPPO India, the market has grown extensively this year, with some disruption coming in the form of innovation in the space of voice calling, phone cameras, and fast charging. In its bid to bring in new technologies and designs faster to consumers, Oppo will soon open a design centre in London.
India's handset industry may go past the 300-mn unit mark in 2019
Oppo, which was heavily focused on selfie cameras till recently, is now working to become a technology innovator in the smartphone space, he said.
The firm is planning to invest Rs 7 trillion (RMB 10 billion) globally in research and development in 2019.
"The onset of 5G services will spur the next mobile revolution in India. We see robust growth in the smartphone market. We will continue to maintain optimum balance in offline and online platforms to ensure presence and adequate product availability across the country", said Nipun Marya, director of brand strategy at Vivo India.
According to Upasana Joshi, analyst at IDC India, easy financing, with widely available equated monthly schemes (EMI), is driving smartphone sales in India. Also, convenience in purchasing handsets online is a key factor.
During the first three quarters of calendar year 2018, the share of the online channel has only grown — from 36 per cent in January-March to 39 per cent in July-September.
Offline stores, however, may not be left behind.
IDC said currently two-thirds of the buyers visited offline stores before purchase and more than a third of these purchased from physical stores — many through cash payments.
“In offline, apart from multi-brand outlets (MBOs), Reliance Digital stores are emerging as a strong choice for buying premium end devices owing to better discounts and offers,” it noted.
The average selling price of smartphones will continue to rise in 2019 in line with the recent trends.
While currently the average selling price of smartphones in India stands close to Rs 12,700 ($180), it has the potential to cross Rs 14,000 ($200) this year.
TechArc said while Xiaomi, OnePlus, Google, Nokia, Asus and Realme would gain share in 2019, brands like Apple, LG, Poco, Micromax, Intex and Karbonn may see loss of sales.

India Inc's equity & debt fund raising down 30% in 2018 to Rs 6 trn

Indian companies have raised nearly Rs 6 trillion from equity and debt instruments in 2018, but volatile market conditions brought down the kitty by 30 per cent and political uncertainties ahead of the 2019 general elections may again cast a shadow on fund-raising activities in first half of the new year.
Experts, however, are hopeful the fund-raising will gather steam in second half of 2019 with a pick-up in the overall investment climate.
The data shows the debt market remains the most preferred route for raising funds to support business needs of the corporate world.
Out of the cumulative Rs 5.9 trillion garnered so far this year from capital markets, a large chunk or Rs 5.1 trillion has been mopped up from the debt market and the remaining amount of about Rs 78,500 came from equity markets, figures compiled by data analytics major Prime Database showed.
In 2017, firms had raised Rs 8.6 trillion, including nearly Rs 7 trillion through debt markets and Rs 1.6 trillion from equities.
In equity market, funds mostly came from initial public offers (IPOs) and issuance of shares to institutional investors.
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The final figures may go up to end the year at around Rs 6 trillion for debt and equities, experts said.
The funds have been raised mainly for business expansion plans, loan repayments and to support working capital, while a large amount raised from IPOs also went to the promoters, private equity firms and other existing shareholders for part or full sale of their investments.
"Lack of corporate lending appetite by PSU banks combined with attractive yields in the corporate bond markets over bank rates appear to motivate corporates to shift towards market based borrowing through non-convertible debentures (NCD) issuances for raising funds," WGC Wealth Chief Investment Officer Rajesh Cheruvu said.
Rajendra Naik, MD (Investment Banking) at Centrum Capital said the later part of 2018 has been challenging for equity markets due to both global and domestic factors.
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"Globally, crude oil price saw almost 20 per cent increase between August-October of this year. Further, bond yield curves have risen during the same period.
"On domestic front, we have seen increase in petrol and diesel prices to all-time high rates and interest rates have also moved up. Also, the impact of IL&FS default and tightening of liquidity for NBFCs had a negative sentiment on the equity markets," he said.
Naik said the state elections in December also kept many investors away, with several factors leading to subdued interest for equities during the year.
Of the total Rs 5.1 trillion mopped up through placement of debt securities, Rs 4.8 trillion came from private placement and over Rs 29.6 billion through public issuance.

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Within the equity segment, main-board IPOs helped garner Rs 309.59 billion and SME IPOs brought in Rs 22.54 billion.
Besides, rights issue of shares to existing shareholders helped raise Rs 185. 72 billion), QIP or Qualified Institutional Placement accounted for Rs 160. 77 billion) and Offer for Sale through stock exchange mechanism got Rs 106.78 billion.
Despite getting regulator Sebi's go-ahead to float initial share-sales worth over Rs 600 billion in 2018, the year saw a total of 24 IPOs raising only Rs 309.59 billion. This was much lower than 36 firms collecting a record amount of over Rs 680 billion through initial share-sales in 2017.
The capital markets regulator has also voiced concern over the slow pace of primary issues, despite a good market condition. Sebi Chairman Ajay Tyagi has asked investment bankers to do more "diligence" on pricing front to get investors in.
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"The IPOs are not taking place is something that's a cause of worry," Tyagi said, while observing that companies have found alternatives like preferential issues to raise money.
Companies that came out of IPOs in 2018 included Bandhan Bank (Rs 44.73 billion), Hindustan Aeronautics (Rs 42.29 billion), ICICI Securities (Rs 35.15 billion), HDFC AMC (Rs 28 billion), Varroc Engineering (Rs 19.55 billion), IndoStar Capital Finance (Rs 18.44 billion) and Lemon Tree Hotels (Rs 10.40 billion).
However, the small and medium enterprise (SME) platform witnessed hectic activities in the IPO space, raising Rs 22.54 billion in 2018 -- much higher than Rs 16.79 billion collected last year.
Marketmen believe outlook appears challenging for initial part of the new year on the IPO front due to the general elections, expected to take place in first half of the year.
"Fund raising through IPOs will be slightly lower in 2019 as compared to 2018 because of several factors including general elections, poor market sentiments and depreciating currency," said Ashok Lalwani, Global Chair of India Practice at Baker McKenzie.
Reliance Securities CEO B Gopkumar said, "The initial part of 2019 is likely to be challenging till Lok Sabha election results are out. After that if a stable government were to be formed then market volatility will reduce and IPO market will pick up significantly. Thus, we see an encouraging second half next year compared to tepid first half."
Motilal Oswal Investment Banking Executive Director Mukund Ranganathan said investors are looking for cues globally too before committing significant new capital for equities.
While fund collection through rights issues has gone up, the same through QIP and OFS routes came down.
"QIPs of last year have failed to deliver significant returns that's why we have sen lower fund raising through the route in 2018," Gopkumar said.

Modi govt to push RBI to lift lending restrictions on some banks: Report

The Indian government will push its central bank to ease lending restrictions for some weak banks and review rules governing its functioning at a board meeting next month, people with knowledge of the matter said.
The members, including government nominees, will press for some of the weak banks to be removed from the so-called prompt corrective action list, particularly those ones that have been consistent in recovering outstanding debt, the people said, asking not to be identified as the plan is not public. There are 11 state-run lenders on the list, which curbs their ability to lend.

The proposals suggest another potentially tense board meeting on Dec. 14 amid an ongoing dispute between the Finance Ministry and the central bank over a number of issues, including the transfer of surplus funds, easing of lending rules and providing liquidity to the shadow-banking sector. The two sides signaled a truce at the most recent board meeting earlier this month.
The Reserve Bank of India will also have to come with a plan to prevent banks accumulating bad loans rather than just penalizing weak lenders with restrictions on lending, the people said. Board members may ask the RBI to come up with a prompt preventive plan as well, apart from seeking greater supervisory control on issues including the monetary policy transmission, they said.
Finance ministry spokesman D.S. Malik didn’t respond to calls to his mobile phone. A spokesman for the central bank didn’t immediately respond to an e-mail seeking comment.
Governance Structure
Murmurs of dissent have resurfaced after Economic Affairs Secretary Subhash Chandra Garg, who is a government nominee on the RBI board, said on Nov. 25 there are plans to discuss changes to the central bank’s governance structure at the next meeting.
Traditionally, the RBI’s 18-member board has served as an advisory body to the central bank, leaving crucial decisions, including banking supervision and setting interest rates, to Governor Urjit Patel and his team.
Recently, the board has been pushing for a bigger say in the RBI’s affairs. The government has prepared a road map that includes setting up panels to oversee functions including financial stability, monetary-policy transmission and foreign-exchange management.