SEBI releases Easier Anchor Investor Rules
- To make the LIC IPO, the attractive Securities and Exchange Board of India has eased the rules for Anchor Investors.
- Anchor Investors are those institutional investors whose investment in an IPO motivates others to invest. These investors boost the confidence of the retail investors. They are also called Celebrity Investors.
- The Lock-in period for the Anchor Investors has been reduced to 30 days for public issues exceeding 10000 crore rupees.
- The role of Anchor Investors and NIIs is crucial to inspiring retail investors' confidence.
- LIC will dilute 3.5% of her total shares. SEBI reduced the threshold to 5%, particularly for LIC.
SEBI to Join Account Aggregator Framework
- Securities and Exchange Board of India will join the account aggregator framework for data sharing.
- The account aggregator framework is meant to allow the customers to share information about their mutual fund and stock portfolio with the financial service providers, such as Brokers, lenders, wealth managers, etc.
- The Account Aggregator Framework is under the regulation of the Reserve Bank of India, therefore it would make the transactions secure. An API (Application Program Interface) is used as an interface between the market players and the regulators. The players include NSDL, CSDL, CAMS, etc.
LIC IPO: Anchor Investors
- LIC went for an IPO, where Anchor Investors made a substantial investigation today.
- Anchor Investors, who are considered to generate confidence among the retail investors, have invested 5,600 crore rupees since the IPO was first opened for them.
- The Securities market regulator SEBI had easies the norms for conducting the IPO of LIC by allowing below threshold liquidation of company shares (i.e 3.5%, instead of 5%).
- Major foreign investors who contributed under the Anchor Investors category are - CPPIB, CDPQ, Brookfield, KIA, NORGES, etc, in addition to the domestic investors. The share price has been kept at 949 rupees per issue.
RBI Hikes the Key Policy Rates
- The Central bank (RBI), held a surprise meeting of the Monetary Policy Committee and brought about key changes in policy rates.
- Looking at the consistently growing inflation, which crossed the 4+/- 2% threshold this quarter at 6.95%, the Reserve Bank of India hiked the key policy rates. The increase is meant to contain inflation in the long term.
|
|
CRR |
Repo |
SDF |
MSF |
|---|---|---|---|---|
|
Earlier |
4.0% |
4.0% |
- |
- |
|
Now |
4.50% |
4.40% |
4.15% |
4.65% |
- Impact on the Indian Economy
- Increased rate of interest thus a dip in demand
- Rise in monthly EMIs
- Debt investments will become more attractive
- Consumer Loans are expensive
CEA Estimates the Indian Economy to Grow by 7- 8.5%
- Chief Economic Advisor in a recent meeting projected the Indian economy to grow at 7 -8.5%.
- The Chief Economic Advisor Dr. V Anantha Nageswaran, in a recent meeting with the credit agencies, forecasted the Indian economy to grow at 7 to 8.5%. His observations are based on current developments in Europe (Ukraine Conflict), which has led to supply chain disruption and a rise in prices.
- He also emphasized the CPI crossing the 6% threshold, breaching the inflation target. To contain inflation, the government's push to increase capital expenditure, is what he conceives right.
- The projections by key institutions are as follows.
|
Institution/Publication |
Projected growth rate for FY 2022 -23 |
|---|---|
|
IMF |
8.2% |
|
RBI |
7.2% |
|
Economic Survey |
8 - 8.5% |
Services Export at an All-Time High
- The services Export has reached 254.4 bn USD, this fiscal.
- India's Services sector export grew by 23.4%, in 2021-22 to touch above 250 bn USD mark despite the pandemic causing serious restrictions on trade. With this, India's total export including merchandise has reached 676.2 bn USD.
- This is a result of India's forward-looking trade policy and subsequent FTAs, PTAs, CEPA, etc with the countries. India's approach to UAE and Australia through the FTA window reaped many opportunities for her.
- Today, UAE has surpassed China to become India's 2nd largest trade partner. India's services export is expected to touch the 1 trillion USD mark.
5 Trillion USD by 2029
- The IMF has projected that India would achieve the 5 Trillion USD mark by the year 2029.
- India is a 3 trillion USD economy and stands as the 6th largest in the world. The Government of India had put forth her ambitious target of achieving 5 Trillion USD by 2024. However, COVID 19 pandemic created havoc on all sectors of the economy by forcing the markets to close.
- Meanwhile, the International Monetary Fund has projected that India would be able to achieve the 5 Trillion mark by 2029, in her World Economic Outlook Report 2022, released recently.
- IMF projects India to grow at 8.2 % per annum in FY 2022. The report also finds that the Indian rupee will depreciate further to 94.4 rupees per dollar by 2029.
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