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Economic Times
5 days ago
- Business
- Economic Times
Liquidity still a challenge, but corporate bond market progressing with policy push: Hajra
India's corporate bond market is slowly but steadily finding its footing, even as liquidity challenges persist. ADVERTISEMENT According to Sujan Hajra, Chief Economist and Executive Director at Anand Rathi Group, outstanding corporate bonds have crossed Rs 47 trillion as of June 2025—driven largely by high-rated corporates and financial institutions. While the secondary market continues to face depth and liquidity constraints, Hajra highlights that ongoing regulatory reforms, such as improved repo facilities and new trading platforms, are helping bridge the gaps. 'Progress may not be spectacular, but it's certainly meaningful,' he says, pointing to a maturing debt market framework backed by policy support. Edited Excerpts – Q) Thanks for taking the time out. The second half of 2025 started on a volatile note. How are you looking at the markets? One of the reasons could be FIIs selling, which continues in July. A) Absolutely, volatility has been the defining feature as we enter the latter half of 2025. We've seen foreign institutional investors pull out nearly $3.4 billion from Indian equities in July alone, mainly in response to global factors like the uncertain US rate environment and a stronger dollar. ADVERTISEMENT However, what's striking is the resilience provided by strong domestic flows, especially through SIPs. India's underlying economic fundamentals remain robust—GDP is still expected to grow by nearly 6.8% this year, according to the RBI—so while short-term swings may make certain classes of investors concerned, the long-term case to remain invested in Indian equities remains intact.Q) IPOs have picked up recently, but EY report highlighted that Indian IPO activity in the first half of 2025 recorded 108 deals raising US$4.6b, demonstrating market resilience despite a 30% decline in transactions.A) That's correct—the numbers tell an interesting story. Even with a 30% drop in the number of deals, raising $4.6 billion in the first half of 2025 signals that appetite for Indian equities remains healthy, especially for high-quality businesses. ADVERTISEMENT Incidentally, the Indian market was in corrective mode between Dec'24 and Mar'25, which makes the feat even more are seeing investors become more discerning, rewarding firms with profitability and scale while being cautious about loss-making ventures. It's a sign of a maturing market, and India still ranks as one of the most active IPO markets globally. ADVERTISEMENT Q) What is the initial sense you are picking up from the June quarter results, which have started to come out?A) The early results this quarter have been mixed. On the positive side, sectors like private banks and capital goods are delivering double-digit profit growth. Conversely, consumer staples and IT majors are under pressure, grappling with slower demand and squeezed margins. At the aggregate level nearly 50% Nifty 50 companies have already published results. ADVERTISEMENT Whie the topline has been relatively subdued, 16-17% bottom line growth remains impressive. At the index level, results so far have been on the balance better than expected. Q) Is the current equity market rally largely liquidity-driven, or are there sufficient earnings fundamentals to back the optimism? A) It's a bit of both. There's no denying that the surge in domestic inflows—particularly through SIPs and DIIs—has helped cushion the the fundamentals are not absent: Nifty 50 earnings have grown over 11% across the past four quarters, supported by strong performances in financials, autos, and there are pockets—especially among small- and mid-caps—where valuations are running ahead of actual earnings, so a certain amount of caution is warranted. Q) SIPs crossed Rs27K – what does it talk about the retail investor behaviour change? A) Crossing the ₹27,000 crore mark in monthly SIP inflows – 9 times jump from early 2016 – is indeed a milestone. It shows that Indian retail investors are embracing a more disciplined, long-term approach to equity investing, moving beyond traditional preferences like gold or real trend is supported by growing financial literacy and the ease of digital investing. It's also encouraging for market stability, as these steady domestic inflows can offset bouts of foreign selling. Q) How is the corporate bond market shaping up here in India? A) India's corporate bond market is gradually finding its feet. Outstanding bonds have crossed ₹47 trillion as of June 2025, with most issuance coming from highly rated corporates and financial liquidity in the secondary market still lags global standards, regulatory reforms—such as new trading platforms and improved repo facilities—are slowly addressing these gaps. Progress is steady, if not spectacular. Q) Where are the pockets of opportunities coming from? A) Much of the opportunity is emerging in sectors linked to domestic demand. Capital goods, infrastructure, select financials, and defence are all riding the wave of increased government and private consumption discretionary remains strong, while rural recovery is catching up. Meanwhile, select public sector enterprises and manufacturers are poised to benefit from policy reforms and the global trend towards supply chain diversification. Q) Where is the smart money moving? A) The so-called 'smart money' is gravitating towards companies with robust balance sheets, steady cash flows, and strong market a visible shift towards private sector banks, capital goods, certain public sector units with credible reform stories, and defence the same time, there's a clear note of caution when it comes to small caps and other overheated segments—profit-taking is evident where valuations look ahead of fundamentals. Q) How should one play the small & midcap space? A) Discipline is crucial here. Valuations in certain segments of small- and midcap stocks have moved well above their historical averages, making selectivity more important than should focus on companies with a track record of earnings, strong governance, and decent liquidity. For most, a staggered approach using mutual funds may be the wisest route, with regular portfolio reviews to manage risk. (Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
5 days ago
- Business
- Time of India
Liquidity still a challenge, but corporate bond market progressing with policy push: Hajra
India's corporate bond market is slowly but steadily finding its footing, even as liquidity challenges persist. According to Sujan Hajra , Chief Economist and Executive Director at Anand Rathi Group, outstanding corporate bonds have crossed Rs 47 trillion as of June 2025—driven largely by high-rated corporates and financial institutions. 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Bonds Corner Powered By RBI auctions help bring average call rate closer to repo The weighted average call rate remained below the repo rate. The Reserve Bank of India used variable rate repo and reverse-repo auctions. This was to align overnight rates with the policy gauge. In June, the WACR was closer to the lower end of the LAF corridor. The RBI prefers the overnight rate to align with the repo rate. Liquidity still a challenge, but corporate bond market progressing with policy push: Hajra India's top state green energy firm mulls first local bond sale Fibe's NBFC arm raises Rs 225 crore via NCDs to fuel innovation and lending growth Corporate bonds to gain as RBI easing cycle nears, says Suresh Darak of Bondbazaar Browse all Bonds News with 'Progress may not be spectacular, but it's certainly meaningful,' he says, pointing to a maturing debt market framework backed by policy support. Edited Excerpts – Q) Thanks for taking the time out. The second half of 2025 started on a volatile note. How are you looking at the markets ? One of the reasons could be FIIs selling, which continues in July. Live Events A) Absolutely, volatility has been the defining feature as we enter the latter half of 2025. We've seen foreign institutional investors pull out nearly $3.4 billion from Indian equities in July alone, mainly in response to global factors like the uncertain US rate environment and a stronger dollar. However, what's striking is the resilience provided by strong domestic flows, especially through SIPs. India's underlying economic fundamentals remain robust—GDP is still expected to grow by nearly 6.8% this year, according to the RBI—so while short-term swings may make certain classes of investors concerned, the long-term case to remain invested in Indian equities remains intact. Q) IPOs have picked up recently, but EY report highlighted that Indian IPO activity in the first half of 2025 recorded 108 deals raising US$4.6b, demonstrating market resilience despite a 30% decline in transactions. A) That's correct—the numbers tell an interesting story. Even with a 30% drop in the number of deals, raising $4.6 billion in the first half of 2025 signals that appetite for Indian equities remains healthy, especially for high-quality businesses. Incidentally, the Indian market was in corrective mode between Dec'24 and Mar'25, which makes the feat even more impressive. We are seeing investors become more discerning, rewarding firms with profitability and scale while being cautious about loss-making ventures. It's a sign of a maturing market, and India still ranks as one of the most active IPO markets globally. Q) What is the initial sense you are picking up from the June quarter results, which have started to come out? A) The early results this quarter have been mixed. On the positive side, sectors like private banks and capital goods are delivering double-digit profit growth. Conversely, consumer staples and IT majors are under pressure, grappling with slower demand and squeezed margins. At the aggregate level nearly 50% Nifty 50 companies have already published results. Whie the topline has been relatively subdued, 16-17% bottom line growth remains impressive. At the index level, results so far have been on the balance better than expected. Q) Is the current equity market rally largely liquidity-driven, or are there sufficient earnings fundamentals to back the optimism? A) It's a bit of both. There's no denying that the surge in domestic inflows—particularly through SIPs and DIIs—has helped cushion the markets. But the fundamentals are not absent: Nifty 50 earnings have grown over 11% across the past four quarters, supported by strong performances in financials, autos, and infrastructure. However, there are pockets—especially among small- and mid-caps—where valuations are running ahead of actual earnings, so a certain amount of caution is warranted. Q) SIPs crossed Rs27K – what does it talk about the retail investor behaviour change? A) Crossing the ₹27,000 crore mark in monthly SIP inflows – 9 times jump from early 2016 – is indeed a milestone. It shows that Indian retail investors are embracing a more disciplined, long-term approach to equity investing, moving beyond traditional preferences like gold or real estate. This trend is supported by growing financial literacy and the ease of digital investing. It's also encouraging for market stability, as these steady domestic inflows can offset bouts of foreign selling. Q) How is the corporate bond market shaping up here in India? A) India's corporate bond market is gradually finding its feet. Outstanding bonds have crossed ₹47 trillion as of June 2025, with most issuance coming from highly rated corporates and financial institutions. While liquidity in the secondary market still lags global standards, regulatory reforms—such as new trading platforms and improved repo facilities—are slowly addressing these gaps. Progress is steady, if not spectacular. Q) Where are the pockets of opportunities coming from? A) Much of the opportunity is emerging in sectors linked to domestic demand. Capital goods, infrastructure, select financials, and defence are all riding the wave of increased government and private capex. Urban consumption discretionary remains strong, while rural recovery is catching up. Meanwhile, select public sector enterprises and manufacturers are poised to benefit from policy reforms and the global trend towards supply chain diversification. Q) Where is the smart money moving? A) The so-called 'smart money' is gravitating towards companies with robust balance sheets, steady cash flows, and strong market positioning. There's a visible shift towards private sector banks, capital goods, certain public sector units with credible reform stories, and defence stocks. At the same time, there's a clear note of caution when it comes to small caps and other overheated segments—profit-taking is evident where valuations look ahead of fundamentals. Q) How should one play the small & midcap space? A) Discipline is crucial here. Valuations in certain segments of small- and midcap stocks have moved well above their historical averages, making selectivity more important than ever. Investors should focus on companies with a track record of earnings, strong governance, and decent liquidity. For most, a staggered approach using mutual funds may be the wisest route, with regular portfolio reviews to manage risk.
Mint
05-07-2025
- Business
- Mint
India-US trade deal: What can the Indian stock market expect ahead of Trump's tariff pause deadline?
India-US trade deal: As the deadline for the 90-day pause on tariffs announced by US President Donald Trump looms, investors have mostly stuck to the sidelines not just in India, but globally. The Indian stock market has entered a consolidation mode amid a lack of clarity, declining 0.7% for the week. Commerce Minister Piyush Goyal has strongly indicated that India will not enter any trade deal under pressure, only once it is "fully finalised, properly concluded and in the national interest". July 9 marks the end of the 90-day suspension period of the Trump tariffs imposed on dozens of countries, including India. An additional import duty of 26% was announced on Indian goods. As per a PTI report, an official said that the Indian team has returned from Washington after holding talks with the US on an interim trade pact but discussions will continue as certain issues in the agri and auto sectors still need to be resolved. India has raised issues over 25% duty in the auto sector and 50% duty on steel and aluminium goods, according to the reports. "The Indian equity market is viewing the US–India trade talks with growing optimism, as signals from both sides suggest a deal is within reach. The temporary pause on tariffs by the US and constructive dialogue has boosted confidence that a resolution will emerge before the July 9 deadline," said Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Group. The sectors that are likely to gain in case of a favourable trade deal are IT, pharma, auto components, electronics and textile, opined experts. A breakthrough would be a significant positive for India's export sectors—particularly IT, pharmaceuticals, and auto components—and could reinforce foreign investor interest in Indian equities, Hajra added. Meanwhile, Harshal Dasani, Business Head at INVasset PMS believes that textiles, pharmaceuticals, and electronics are likely to see substantial benefits from tariff reductions and improved market access. However, challenges remain in the agriculture and dairy sectors, which may be impacted by the existing tariff structures, he added. India's textile exports to the US, valued at approximately $9.7 billion in 2023, could grow further with favourable trade terms. Similarly, the pharmaceutical sector, which supplies around 31% of its exports to the U.S. (approximately $8 billion), stands to gain significantly from expanded access. The electronics sector has also experienced strong growth, with exports to the US exceeding $6.6 billion in 2023 alone. "Additionally, the trade deal could enhance foreign direct investment (FDI) inflows, which saw a 14% increase in FY 2024–25, with the services sector being a key recipient. The potential for increased market access and stronger trade ties would position India as a more attractive investment destination," Dasani added. A positive trade deal could boost foreign investor confidence further, leading to enhanced capital inflows and a stronger Indian Rupee. However, on the flip side, if the deal falls short of expectations, short-term market volatility could ensue. "Export-driven sectors, particularly textiles and pharmaceuticals, might face hurdles due to unresolved tariff issues," Dasani said. He also believes that any geopolitical tensions stemming from the deal's terms could create uncertainty in global markets, potentially dampening investor sentiment. Against this backdrop, Nitin Jain, Senior Research Analyst at Bonanza, advised investors to adopt a defensive position, concentrating on domestic-focused industries such as banking and FMCG which are less affected by global fluctuations. "Investors should exercise caution regarding industries associated with global supply chains, such as metals and capital goods. Utilizing gold-linked ETFs or defensive investments can assist in reducing volatility. A brief correction could present long-term purchasing chances in high-quality Indian stocks, as the economy continues to show fundamental strength," Jain added. Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
News18
13-05-2025
- Business
- News18
CPI April 2025: India's Inflation Cools Down To 3.16%, Lowest Since July 2019
Last Updated: CPI Inflation Rate April 2025: The fall in April 2025 inflation comes amid a sharp decline in food inflation during the month. CPI Inflation Rate April 2025: India's retail inflation, based on the Consumer Price Index (CPI), in April 2025 fell to 3.16 per cent, which is the lowest since July 2019, according to the latest official data released on Tuesday. The fall in April 2025 inflation comes amid a sharp decline in food inflation during the month. There is decline of 18 basis points in headline inflation of April, 2025 in comparison to March, 2025. It is the lowest year-on-year inflation after July, 2019. Food Inflation In April 2025 Year-on-year inflation rate based on All India Consumer Food Price Index (CFPI) for the month of April, 2025 over April, 2024 is 1.78% (Provisional). A sharp decline of 91 basis point is observed in food inflation in April, 2025 in comparison to March, 2025. The food inflation in April, 2025 is the lowest after October, 2021. Corresponding inflation rate for rural and urban are 1.85% and 1.64%, respectively. Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Group said, India's CPI inflation eased to a six-year low of 3.16% in April 2025, driven by falling prices of vegetables, pulses, and cereals, with food inflation at its lowest since October 2021. Softening food and crude oil prices, he added, are likely to keep inflation below the RBI's 4% target, creating room for a potential repo rate cut in the upcoming MPC meeting. 'However, steadily rising service inflation may exert some pressure on core inflation. Overall, with inflation under control, the policy focus is expected to shift more firmly towards supporting growth—an environment that, along with a likely decline in interest rates, bodes well for corporate earnings and the Indian equity market outlook." Rural And Urban Inflation In April 2025 In April 2025, rural headline inflation fell to 2.92% from 3.25% in March, and food inflation dropped to 1.85% from 2.82%. Urban headline inflation decreased slightly to 3.36% from 3.43%, with a notable reduction in food inflation to 1.64% from 2.48%. Housing inflation for April was 3.00%, down from 3.03% in March. Education inflation rose to 4.13% from 3.98%, covering both rural and urban sectors. Health inflation remained almost steady at 4.25% compared to 4.26% in March, for both sectors. Transport and communication inflation increased to 3.73% from 3.36%, while fuel and light inflation jumped to 2.92% from 1.42%, both reflecting combined rates for rural and urban areas. Kerala experienced the highest inflation for April month to 5.94%, followed by Karnataka (4.26%) and Jammu and Kashmir (4.25%). First Published: May 13, 2025, 16:24 IST
