The past week saw a couple of developments that had a bearing on the financial landscape of India—its economy, its markets, and business. From forex reserves in a flux to some big-ticket economic decisions by the Union Cabinet, major IPO activities to even some interesting corporate acquisitions, each had its repercussions for the bigger economic picture. We present to you a detailed look at the key highlights from June 17 to June 21, 2024.
Forex Reserves Decline
The forex reserves of India witnessed a sharp decline to USD 652.895 billion for the week ended June 14, 2024, a drop of USD 2.922 billion. The reserves had surged by USD 4.307 billion in the previous week to a record high of USD 655.817 billion.
Foreign currency assets, the major portion of the reserves, slid by USD 2.097 billion to USD 574.240 billion. Partly, the fluctuation is due to the appreciation and depreciation of non-US currencies such as euro, pound, and yen held in the reserves. Gold reserves fell USD 1.015 billion to USD 55.967 billion during the period under review, according to data furnished by the Reserve Bank of India.
Decision of the Union Cabinet on Economic Measures
What could be called an economic stimulus, the Union Cabinet on Wednesday cleared activities worth over ₹2.88 lakh crore. These range from increasing the minimum support price of 14 Kharif crops to the augmentation of Varanasi airport and the setting up of a new major port at Vadhavan.
These decisions emerged after portfolios were assigned to Union Ministers in the third term of the Modi government. The approved measures are likely to be supportive of the different sectors of the economy, especially the overall growth.
Akme Fintrade IPO
The IPO of non-banking finance company Akme Fintrade arrived heavy with interest at 53.97 times subscription on the closing day of bidding, June 21, 2024. The share sale of Rs 132-crore received bids for 42,44,43,250 shares against the issue size of 78,65,000 shares, according to data from the National Stock Exchange.
The subscription rate of the portion earmarked for non-institutional investors was 129.53 times, while that for retail individual investors was 43.67 times. Interest from qualified institutional buyers was similarly brisk at a subscription rate of 28.12 times.
Pine Labs IPO Consideration
Pine Labs Pvt, a top Asian digital payments provider supported by Peak XV Partners and Mastercard Inc, — is considering an initial public offer in India that could attract about $1 billion. The source added that it may issue new and secondary shares, seeking a valuation in excess of $6 billion. Pre-listing fundraising from Pine Labs may also consider an IPO round.
If eventually floated out, this would be the biggest IPO by any Indian fintech company since One97 Communications Ltd., the operator of Paytm, which raised about $2.5 billion in 2021.
Bharti Airtel’s Stake in Indus Towers
Bharti Airtel announced an additional acquisition of 1 per cent equity stake in Indus Towers on June 19, 2024. It was after the UK’s Vodafone group sold a 20 per cent shareholding in Indus Towers. The said acquisition by Bharti Airtel was done on-market for 2.695 crore shares, with approvals from the board of directors to acquire up to 2.7 crore shares.
Prior to the said transaction, Bharti Airtel had a stake of 47.95 per cent in the equity of Indus Towers. Interest from private equity firms I Squared Capital and Stonepeak for sale of 53.3 crore Vodafone shares for ₹17,065 cr confirmed.
Surge in Housing Supply and Rental Price Growth
A steep rise in new housing supply has resulted in a deceleration of rental price growth in top cities—according to a report by realty consultant ANAROCK. Residential rentals in key micro-markets across top cities, including Delhi NCR, Mumbai, Bengaluru, Hyderabad, Chennai, Kolkata, and Pune, rose by 2-4 percent quarter-on-quarter in Q2 2024 from the earlier span of 4-9 percent in Q1 2024.
As per ANAROCK, the top seven cities are likely to witness the completion of nearly 531,000 new housing units in 2024 as compared to nearly 435,000 units in 2023—a jump of 22 percent if the delivery schedules remain on track.
