Latest news with #SiddhiNayak
Yahoo
24-06-2025
- Business
- Yahoo
India cenbank announces reverse repo to arrest fall in overnight rates
By Siddhi Nayak MUMBAI (Reuters) -India's central bank said on Tuesday it will conduct a seven-day variable rate reverse repo auction worth one trillion rupees ($11.62 billion) on June 27, following a review of liquidity conditions in the banking system. The Reserve Bank of India (RBI) added that after reviewing evolving liquidity conditions, it will not conduct the 14-day main operation scheduled for Friday, for the ensuing fortnight, according to a press release. India's banking system liquidity surplus stood at 2.44 trillion rupees as of June 23, as per RBI data. The central bank in June announced a surprise 100-basis-point reduction in the cash reserve ratio, the portion of deposits banks must park with the RBI, in four equal tranches beginning September, lowering it to 3%, to boost policy transmission. Amid surplus liquidity conditions, the weighted average overnight call rate has remained well below the RBI's key repo rate and near the policy corridor's floor, the Standing Deposit Facility rate, for the past few weeks. A persistent gap between the RBI's operative rate and the policy rate typically signals that banks are accessing cheaper funding than what the central bank is comfortable with, as per traders. Earlier this month, Reuters had reported that the RBI could start conducting variable rate reverse repo auctions to suck out surplus liquidity as and when required. "The move (VRRR announcement) indicates that the RBI wants the operative rate closer to the repo rate," said Gaura Sen Gupta, India economist at IDFC FIRST Bank. The move comes sooner than expected with the transmission via various channels - credit, deposit and bond market - in its early stages, Sen Gupta said, adding that the move may lead to a further rise in short-term yields. ($1 = 86.0580 Indian rupees)
Yahoo
24-06-2025
- Business
- Yahoo
India cenbank announces reverse repo to arrest fall in overnight rates
By Siddhi Nayak MUMBAI (Reuters) -India's central bank said on Tuesday it will conduct a seven-day variable rate reverse repo auction worth one trillion rupees ($11.62 billion) on June 27, following a review of liquidity conditions in the banking system. The Reserve Bank of India (RBI) added that after reviewing evolving liquidity conditions, it will not conduct the 14-day main operation scheduled for Friday, for the ensuing fortnight, according to a press release. India's banking system liquidity surplus stood at 2.44 trillion rupees as of June 23, as per RBI data. The central bank in June announced a surprise 100-basis-point reduction in the cash reserve ratio, the portion of deposits banks must park with the RBI, in four equal tranches beginning September, lowering it to 3%, to boost policy transmission. Amid surplus liquidity conditions, the weighted average overnight call rate has remained well below the RBI's key repo rate and near the policy corridor's floor, the Standing Deposit Facility rate, for the past few weeks. A persistent gap between the RBI's operative rate and the policy rate typically signals that banks are accessing cheaper funding than what the central bank is comfortable with, as per traders. Earlier this month, Reuters had reported that the RBI could start conducting variable rate reverse repo auctions to suck out surplus liquidity as and when required. "The move (VRRR announcement) indicates that the RBI wants the operative rate closer to the repo rate," said Gaura Sen Gupta, India economist at IDFC FIRST Bank. The move comes sooner than expected with the transmission via various channels - credit, deposit and bond market - in its early stages, Sen Gupta said, adding that the move may lead to a further rise in short-term yields. ($1 = 86.0580 Indian rupees) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Mint
20-06-2025
- Business
- Mint
Indias HDB Financial IPO pricing not influenced by 70% premium in grey market, bankers say
By Siddhi Nayak, Vivek Kumar M and Bharath Rajeswaran MUMBAI, June 20 (Reuters) - The initial public offering of India's HDB Financial has been priced based on the fundamentals of the business, unaffected by the roughly 70% premium the stock is trading at in the informal 'grey market' for unlisted securities, bankers said on Friday. Shares in the lender will be sold in a price band of 700 rupees to 740 rupees per share ($8.06-$8.52), valuing HDB Financial at $7.1 billion at the upper end of the band. The shares were traded around 1,200 rupees to 1,250 rupees in the 'grey market'. "This price has been determined basis extensive roadshows," said Jibi Jacob, head of equity capital markets at Jefferies India, one of the bankers to the issue. "We have no influence on what is happening on the unlisted side," Jacob said at a press conference in Mumbai. HDB Financial's IPO, the largest for an Indian non-banking financial company, opens for subscription on June 25, with large institutions bidding a day earlier. The firm, which lends across segments such as personal and business loans, operates 1,747 branches nationwide. India's largest private lender, HDFC Bank, holds a 94% stake in the firm. The IPO pricing has been determined on the fundamentals of the franchise and how key peers are trading, said Sonia DasGupta, head of the investment banking division at JM Financial, another banker to the issue. At 740 rupees per share, the price-to-book ratio, a key measure of valuation, works out to 3.72 for HDB, in line with peers such as Bajaj Finance and Shriram Finance . India's red-hot IPO streak has cooled in 2025, following a blockbuster year in 2024 that saw record capital raised through new listings. So far this year, nearly 100 firms have hit the market, raising about $4 billion, a decline from the 137 IPOs and $4.3 billion fundraise in the year-ago period, according to data compiled by LSEG. Analysts attribute tepid retail investor demand to aggressive IPO pricing, as the Nifty 50 trades nearly 6% below its record high from last September. The bull run in Indian markets post the COVID-19 crisis led to valuations of unlisted firms inflating beyond fundamentals, said Arun Kejriwal, founder of Kejriwal Research and Investment Services. "HDB's approach is a timely reminder that IPO pricing should be grounded in reality, not speculative hype," Kejriwal said. ($1 = 86.6040 Indian rupees) (Reporting by Siddhi Nayak and Vivek Kumar M in Mumbai and Bharath Rajeswaran in Bengaluru, additional reporting by Nishit Navin; Editing by Mrigank Dhaniwala)
Yahoo
16-06-2025
- Business
- Yahoo
India cenbank seeks market views on aligning call money rate with repo, sources say
By Siddhi Nayak and Dharamraj Dhutia MUMBAI (Reuters) -The Reserve Bank of India has sought feedback from large market participants on aligning the overnight interbank call money rate more closely with the policy repo rate, five treasury officials aware of the discussions told Reuters on Monday. The move follows a Reuters report last week that said the RBI wants the overnight call rate to broadly align with the policy repo rate and is considering steps to ensure that happens. The policy rate currently stands at 5.50%, while the overnight call rate averages 5.30% and the TREPS rate hovers near 5.20%. The overnight call rate and TREPS rate have averaged below the policy rate since April. A persistent gap between the RBI's operative rate and the policy rate typically signals that banks are accessing cheaper funding than what the central bank is comfortable with. The RBI spoke with large treasury officials on Friday to review liquidity conditions and understand why the overnight call rate — the operative policy target — has been persistently trailing the repo rate, two of the sources said. None of the sources wanted to be named because they are not authorised to speak to the media. The RBI did not immediately reply to a Reuters email seeking comment. The central bank is also keen to understand why treasury bill yields have spiked in the last week, the two sources added. The yield on 364-day notes was sharply higher than estimates last Wednesday. "The motive seemed to be to sensitise the market that a variable rate reverse repo auction would be in the offing," a senior official at a state-run bank said. The source had added that the RBI could start conducting variable rate reverse repo auctions to suck out surplus liquidity as and when required. The weighted average overnight call rate has remained well below the RBI's key repo rate and closer to the policy corridor's floor, the Standing Deposit Facility rate, for the past few weeks. On June 6, the RBI slashed its key policy rate by 50 basis points, but changed its stance to neutral, indicating limited room for further cuts. The RBI also announced a reduction in banks' cash reserve ratio by 100 basis points September onwards. The central bank also stopped conducting daily fund infusion through variable rate repo since June 11, which market took as an indication that the RBI may move towards VRRR soon. Market participants have requested that the RBI avoid shocks in liquidity management which would help avoid volatility in short-term rates, another treasury official said. "Given that the focus of monetary policy is on enhancing transmission, the expectation channel is equally important. Hence, it would be better to move overnight rates towards repo rate after some time, allowing transmission to gain pace," said Gaura Sen Gupta, chief economist with IDFC First Bank.
Mint
16-06-2025
- Business
- Mint
India cenbank seeks market views on aligning call money rate with repo, sources say
By Siddhi Nayak and Dharamraj Dhutia MUMBAI, - The Reserve Bank of India has sought feedback from large market participants on aligning the overnight interbank call money rate more closely with the policy repo rate, five treasury officials aware of the discussions told Reuters on Monday. The move follows a Reuters report last week that said the RBI wants the overnight call rate to broadly align with the policy repo rate and is considering steps to ensure that happens. The policy rate currently stands at 5.50%, while the overnight call rate averages 5.30% and the TREPS rate hovers near 5.20%. The overnight call rate and TREPS rate have averaged below the policy rate since April. A persistent gap between the RBI's operative rate and the policy rate typically signals that banks are accessing cheaper funding than what the central bank is comfortable with. The RBI spoke with large treasury officials on Friday to review liquidity conditions and understand why the overnight call rate — the operative policy target — has been persistently trailing the repo rate, two of the sources said. None of the sources wanted to be named because they are not authorised to speak to the media. The RBI did not immediately reply to a Reuters email seeking comment. The central bank is also keen to understand why treasury bill yields have spiked in the last week, the two sources added. The yield on 364-day notes was sharply higher than estimates last Wednesday. "The motive seemed to be to sensitise the market that a variable rate reverse repo auction would be in the offing," a senior official at a state-run bank said. The source had added that the RBI could start conducting variable rate reverse repo auctions to suck out surplus liquidity as and when required. The weighted average overnight call rate has remained well below the RBI's key repo rate and closer to the policy corridor's floor, the Standing Deposit Facility rate, for the past few weeks. On June 6, the RBI slashed its key policy rate by 50 basis points, but changed its stance to neutral, indicating limited room for further cuts. The RBI also announced a reduction in banks' cash reserve ratio by 100 basis points September onwards. The central bank also stopped conducting daily fund infusion through variable rate repo since June 11, which market took as an indication that the RBI may move towards VRRR soon. Market participants have requested that the RBI avoid shocks in liquidity management which would help avoid volatility in short-term rates, another treasury official said. "Given that the focus of monetary policy is on enhancing transmission, the expectation channel is equally important. Hence, it would be better to move overnight rates towards repo rate after some time, allowing transmission to gain pace," said Gaura Sen Gupta, chief economist with IDFC First Bank. This article was generated from an automated news agency feed without modifications to text.
