Banks begin slashing lending rates after RBI's rate cut; home, small business loans to get cheaper
Mumbai: Banks have started to reduce lending rates, passing the benefit of the Reserve Bank of India's reduction of repo rate.
This is expected to benefit home loan borrowers as well as small businesses, as most of these loans are linked to external benchmarks like the RBI's repo rate.
Bank of Baroda
and
Punjab National Bank
reduced repo-linked lending rate by 50 basis points each.
Bank of Baroda's revised repo-linked lending rate (RLLR) now stands at 8.15% compared to 8.65%, while PNB's RLLR has come down to 8.35% from 8.85%.
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However, PNB has kept the marginal cost of fund-based lending rate (MCLR) unchanged. Kolkata-based
UCO Bank
announced 10 basis points reduction in MCLR. The revised MCLR now stands in the range of 8.15-9.00%.
On Friday, the central bank slashed the repo rate by 50 basis points, taking the total reduction to 100 bps since February.
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Time of India
23 minutes ago
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Rapido cuts food delivery charges by half to counter Zomato, Swiggy
Ride-hailing app Rapido has finalised online food delivery partnership costs and terms with restaurants at nearly half the commissions from entrenched rivals Swiggy and Zomato , challenging the duopoly, people directly aware of the developments said. According to the agreed terms with industry body National Restaurants Association of India (NRAI), Rapido is expected to charge commissions in the range of 8-15% from restaurants, compared to 16-30% Zomato and Swiggy charge, the executives said. The partnership terms state Rapido will charge a fixed fee of Rs 25 on orders below Rs 400 and Rs 50 on orders over Rs 400, the people quoted earlier said. This translates to a range of 8-15% commissions from restaurants, compared to 16-30% charged by Zomato and Swiggy. Consumers will be able to place orders on the Rapido app where restaurants will be listed. "This will specially help small restaurants ," one of the executives mentioned above said. The pilot is expected to go live in June-end or first week of July, starting with Bengaluru . ETtech "We've been in discussion with Rapido over the last few months just the way we are working closely with ONDC. We are discussing a structure which is economically and democratically much more viable for restaurants to sustain," NRAI president Sagar Daryani said. He declined to comment on specific partner terms. "It's also very important for us to know our customers and the same has been candidly communicated to them," Daryani added. Allegations of data masking have been a core point of disagreement between restaurants and the large platforms. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories An email seeking comments from Rapido remained unanswered. The ride-hailing unicorn's bike-taxi riders currently have a select 'idle-time' arrangement with Swiggy to deliver food in select cities, but the arrangement is non-exclusive. The NRAI, which represents over 500,000 restaurants, had initiated a similar partnership with the government-backed ONDC in January, but the terms are still being ironed out amid slower traction. Recent months have seen multiple small restaurant owners calling out what they alleged are "steep charges" levied by Zomato and Swiggy. "Zomato is becoming unsustainable for small restaurant owners like us," Vandit Malik, founder, The Garlic Bread, wrote on Linkedin three weeks back. "To even be visible on the platform, I'm forced to spend Rs 30+ per order on ads. What's left? Pennies. Sometimes, not even that," he alleged. The owners of another NCR-based small restaurant, Saffroma, wrote on X last week, which went viral, that it was quitting Zomato alleging "zero payouts, mystery service charges and advertisements initiated without approval." The post has since been deleted.
Mint
32 minutes ago
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Vijay L Bhambwani's Ticker: Retail traders getting into overdrive
Last week, I analysed statistical data and wrote that retail traders were getting more aggressive. That aggression not only continued, but retail traders stepped on the gas to go into overdrive. As per the last data available on NSE's website at the time of writing this piece, retail traders bought the highest number of shares with a margin-funded facility. Clearly, there is a sense of urgency in this buying because they are resorting to borrowing when their own capital is falling short. I have repeatedly warned you from many quarters that high leverage and statistical ßeta (pure price volatility) go hand in hand. Also note that I have written about how calendar 2025 marks the onset of procyclicality in financial markets. This economic phenomenon occurs after prolonged periods of time when asset prices and the economic outlook diverge. Mean reversion is triggered, and asset prices align with economic data. High volatility is a direct result. Brace up for a challenging but profitable ride ahead. Last week, I wrote that the banking and financial sector stocks would be buoyant ahead of the RBI (Reserve Bank of India) announcement on interest rates. That hypothesis was validated by the markets. Also, remember this sector commands a weightage of over 37% in the Nifty 50. The announcement of the government being open to foreign buyers as major holders in Indian banks boosted banking stocks further. Which means it was banking that boosted markets higher. This optimism may spill over to this week as well. I had also written that the interest rate cut of over 0.25% would be a negative development for cash carry trade. That RBI cut the rate by 0.50% tells me markets saw a short-covering-based rally. There is a good probability of profit-taking setting in the weeks ahead. Rising oil and gas prices can trigger volatility in oil marketing companies (OMCs) stocks. Fears of higher inflation can return in the near term unless energy prices fall. The rise is due to geopolitical concerns, and the energy markets remain well supplied. Bullion saw a sterling week as gold and silver rallied sharply. I maintain my view that my readers should look beyond 2025 and stick to delivery holdings rather than pay cost-of-carry (financing charges) that futures & options (F&O) buyers have to incur. All big declines will be bought into by institutional players, so the long-term story remains intact. My readers can refer to my video wherein I have explained how to buy purest bullion at honest-to-God prices, conduct fool-proof checks for purity electronically and negotiate buyback prices. Industrial metals are witnessing some buying, but resistance at higher levels continues to cap gains. Much of the price rise is due to tariffs rather than anticipated demand hikes. That means metal mining companies' stocks may rise due to rate cuts, but the rally may be calibrated. Public sector undertakings (PSUs) will continue to attract trader attention as newsflow is positive for this segment of the market. Fixed income investors should keep the powder dry for better rates. Continue to trade light with stop losses and tail risk hedges. A tutorial video on tail risk (Hacienda) hedges is here. Let us assess last week's happenings to gauge what to expect in the coming week. Due to their sheer weightage, banking stocks led the rally. A weak US dollar boosted haven buying in bullion and energy commodities, too. The rupee weakened mildly against the dollar, capping the gains in our markets. Watch the USDINR carefully this week. Indian 10-year bond yield rose mildly, which means bond prices fell mildly. Barring this, banking stocks would have risen even higher. Market capitalisation of the National Stock Exchange (NSE) rose 1.59%, which means the rally was broad-based. Market-wide position limits (MWPL) rose routinely along expected lines. US headline indices rose and provided tail winds to our markets. Change in asset prices Retail risk appetite—I use a simple yet highly accurate yardstick for measuring the conviction levels of retail traders—where are they deploying money. I measure what percentage of the turnover was contributed by the lower and higher risk instruments. If they trade more of futures, which require sizable capital, their risk appetite is higher. Within the futures space, index futures are less volatile compared to stock futures. A higher footprint in stock futures shows higher aggression levels. Ditto for stock and index options. Last week, this is what their footprint looked like (the numbers are the average of all trading days of the week) – The capital-intensive, high-risk futures segment saw lower turnover contribution as higher volatility kept traders at bay. In the lower capital and lower volatility options segment, the index options saw the turnover contribution rise. This segment is the least capital-intensive and the least volatile. That tells me retail risk appetite in the leveraged segment fell off a cliff. NSE F&O Component Turnover Breakdown Let us peel layer after layer of statistical data to arrive at the core message of the markets. The first chart I share is the NSE advance-decline ratio. After the price itself, this indicator is the fastest (leading) indicator of which way the winds are blowing. This simple yet accurate indicator computes the ratio of rising to falling stocks. As long as the stocks that are gaining outnumber the losers, bulls are dominant. This metric gauges the risk appetite of one marshmallow traders. These are pure intraday traders. The Nifty notched up gains last week, and the advance-decline ratio followed suit. At 1.15 (prior week 1.05), it indicates there were 115 gainers for every 100 losers. Intraday traders showed improved buying conviction, and as long as this ratio stays above 1.0 this week, bulls will remain in charge. A tutorial video on the Marshmallow theory in trading is here. NSE Advance-Decline Ratio The second chart I share is the market-wide position limits. This measures the amount of exposure utilised by traders in the derivatives (F&O) space as a component of the total exposure allowed by the regulator. This metric gauges the risk appetite of two marshmallow traders. These are deep-pocketed, high-conviction traders who roll over their trades to the next session. The MWPL reading rose along routine lines after a post-expiry dip. What is noteworthy is the increase to 31.24% in the first week after expiry. This level is the highest after the commensurate week post expiry of the January 2025 series. Do note that the derivatives list has seen sizable new stock additions, which means the absolute amounts invested by swing traders are sharply higher. This is more evidence that the retail segment is going into overdrive. Higher greed may lead to crowded exits if the news flow turns adverse. Do remember, volatility is on the rise already. Keep looking over your shoulder and maintain tail risk hedges. A dedicated tutorial video on how to interpret MWPL data in more ways than one is available here. Market-Wide Position Limits The third chart I share is my in-house indicator, 'impetus.' It measures the force in any price move. Last week, we saw the Bank Nifty lead the rally, but the impetus reading fell. The Nifty 50 rallied with mildly higher impetus readings, which tells me the upthrust was more due to short covering than fresh buying. Ideally, the price and impetus readings must rise in tandem to indicate a sustainable rally in the markets. Nifty and Bank Nifty Impetus The final chart I share is my in-house indicator 'LWTD.' It computes lift, weight, thrust and drag encountered by any security. 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The price is above the 25-week moving average, which is a proxy for the six-month holding cost of an average retail investor. That means the medium-term outlook is positive. The 24,500 level is a support that bulls must defend in case of declines. Failing which further declines may occur. Nifty Spot Your call to action – Watch the 25,250 level as a near-term resistance. Staying above this level strengthens bulls. Last week, I estimated ranges between 57,400 – 54,100 and 25,475 – 24,025 on the Bank Nifty and Nifty, respectively. Both indices traded within their specified resistance levels. This week, I estimate ranges between 58,200 – 54,950 and 25,725 – 24,300 on the Bank Nifty and Nifty, respectively. Trade light with strict stop losses. Avoid trading counters with spreads wider than 8 ticks. Vijay is the CEO a proprietary trading firm. He tweets at @vijaybhambwani
Mint
33 minutes ago
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Hexaware faces challenges in one of its top three accounts
Hexaware Technologies Ltd is facing challenges in one of its top three accounts, which will knock off at least 1% of the company's incremental revenue because of the client's cost-saving efforts. The country's tenth-largest information technology (IT) services firm, which ended 2024 with $1.43 billion in revenue, counts Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corp. (Freddie Mac) among its five largest customers. Both these companies collectively bring the IT outsourcer about $150 million in revenue annually. Chief executive Srikrishna Ramakarthikeyan maintained that slower business from one of these clients will impact 1% of the revenue during the company's post-earnings analyst call on 29 April. This implies a ramp down from the business in the current year by $14.3 million. Minthas learnt from at least three people with knowledge of the matter that Hexaware has seen a slowdown in business from Fannie Mae, one of its top three clients. While CEO Srikrishna did not specify the clients' names, he referred to two 'JSCs' or joint stock companies. Also Read: Cognizant wins $1 billion deal from US-based healthcare company Minthas learnt that Fannie Mae is ramping down, and there was a delay in project execution from another mortgage company, which it has learnt to be Freddie Mac. The company's management said the ramp-down was an attempt to reduce costs and reduce the number of IT outsourcers they work with. 'They have roughly 2,500 contractors, which they do business with over hundred people. We are less than 20% of that, but we are the largest. And they said they want to get it down to a very small number, somewhere between two and 10," said Srikrishna, during the post-earnings call. Hexaware has three clients that fetch the company upwards of $75 million in revenue annually. The company follows a January-December financial year. Two US accounts He said there was another delay in project execution with a client they won earlier in the year as part of the latter's vendor consolidation drive, which narrows the number of IT outsourcers a company works with. However, Srikrishna said work on the project has started after the delay. Hexaware ended the three months through March 2025 with $371.5 million in revenue, down 0.2% sequentially. Still, the genesis of the ramp down can be traced to a change in management at Fannie Mae. US President Donald Trump appointed William Pulte as the chairman of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, in January this year. The aim was to privatise both mortgage companies that were under government control since the 2008 financial crisis, and to help in more borrowing and more home construction in US. Pulte's first move was to rejig the leadership of the two companies. To this end, Diana Reid, chief executive of Freddie Mac, was also sacked, along with at least 700 employees of both companies. This rejig also led to both companies reducing the IT vendors they work with and renegotiating their contracts. For now, at least one analyst has raised concerns. 'The recent board shake-up at Freddie Mac and Fannie Mae has introduced uncertainty around IT spending priorities, particularly in light of tightening US federal budgets. Given HEXT's (Hexaware) exposure to Fannie Mae as one of the top accounts, we see short-term uncertainty and a possible risk to revenue estimates if spending slows or contracts are re-evaluated," said Abhishek Pathak, research analyst atMotilal Oswal Financial Services, in a report released in May 2025. Driving consolidation He added that while Hexaware has been getting stable revenue from the company for 15 years, 'it has also resulted in heavy onsite exposure, which has dented margins compared to more offshore-centric competitors." Challenges in two of its top accounts signal that the company will have to beef up revenue in its remaining top accounts or bag new deals at a time when companies are holding back tech spending due to tariffs imposed by Trump. Also Read: Age is catching up with Big Tech. Blame it on automation To be sure, the company expected both projects to ramp up from April this year, with both clients giving between $20 million and $35 million in incremental revenue annually from next year. A second analyst said the rampdown and delay were part of a consolidation drive by the two US-based mortgage companies. 'The game plan of Freddie and Fannie is to do away with on-site vendors as part of a vendor consolidation drive, which is basically with an aim to cut costs, but Hexaware has a diversified client base, so challenges can be overcome," said a Mumbai-based analyst on condition of anonymity. Hexaware seems to be offsetting the challenge. Its other top three clients, including consulting firm Ernst & Young Global Ltd, are expected to help the company grow. Revenue from its top five clients, which make up roughly a fourth of its revenues, grew 14.16%, faster than the company's 12.37% at the end of January-March 2025. Another thumbs up for the IT outsourcer is its diverse client base. No single client has contributed more than a tenth of its total revenue over the last three years, ensuring that its destiny is not tied to one or two large accounts. US top market Revenue from financial service providers makes up almost a third of the company's revenue, and its biggest market is the US, where the company gets more than three-fourths of its business. Despite the challenge in these accounts, private equity giant Carlyle-backed Hexaware, which does not give guidance, maintains it will have a solid year. 'So just between these two, we'll convert Q2 from what would've been a great Q2 to a good Q2. So we still expect to have a good Q2, but actually the underlying performanceex of these two, will actually be a very solid Q2. And that momentum will continue into Q3," said Srikrishna, adding that more deals in the pipelineand those that ramp up later in the year will help the company grow sequentially in the fourth quarter. Also Read: Staffing firms find it more profitable putting employees in GCCs than IT firms 'So we actually expect to have a pretty solid year," said Srikrishna. Emails sent to Hexaware, Freddie Mac, and Fannie Mae on 2 June went unanswered. Still, this ramp-down in business for Hexaware underscores a trend for IT service providers in the last 12 Ltd lost a chunk of its business with FedEx to Accenture Plc, while Microsoft reduced the business it gave to LTIMindtree Ltd andSonata Software Ltd.
