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India's current world-beating economic growth rate on the back of an investment boom resembles that of 2003-07 when growth averaged more than 8 per cent, according to economists at <keyword id="48670" type="General" weightage="20" keywordseo="Morgan-Stanley" source="Orion">Morgan Stanley</keyword>. In a report '<keyword id="20990538" type="General" weightage="20" keywordseo="The-Viewpoint-India" source="Orion">The Viewpoint: India</keyword> - Why this feels like 2003-07', Morgan Stanley said after a decade of investment to GDP steadily declining, <keyword id="46930" type="General" weightage="20" keywordseo="capex" source="Orion">capex</keyword> has emerged as a key growth driver in India. "We think the capex cycle has more room to run, therefore the current expansion closely resembles that of 2003-07. The current cycle is driven by investment outperforming consumption, <keyword id="3567420" type="General" weightage="20" keywordseo="public-capex" source="Orion">public capex</keyword> leading initially but <keyword id="3896912" type="General" weightage="20" keywordseo="private-capex" source="Orion">private capex</keyword> rapidly catching up, the urban consumer leading consumption followed by catch-up in rural demand, market share in global exports rising and macro stability risks kept in check. "We think the defining characteristic of the current expansion is the rise in the investment-to-GDP ratio. Similarly, in the 2003-07 cycle investment to GDP rose from 27 per cent in F2003 (fiscal year ending March 2003) to 39 per cent in F2008, which was close to the peak. "Investment to GDP then hovered around those levels until it peaked in F2011. 2011 to 2021 then registered a decade of decline - but the ratio has now inflected again to 34 per cent of GDP and we expect it to rise further to 36 per cent of GDP in F2027E," it said. In 2003-07, the capex boom led to an acceleration in productivity, job creation and income growth. As more labour was absorbed into employment by the strengthening economy, savings to GDP also rose from 28 per cent in F2003 to 39 per cent in F2008. During 2003-07, GDP growth averaged 8.6 per cent and headline CPI inflation averaged 4.8 per cent. The current account balance stayed within the central bank's comfort zone, ranging between 2.8 per cent to -1.4 per cent of GDP on a 4Q trailing sum basis. Even when oil prices shot up to USD 145 per barrel in July 2008, the current account deficit only widened to 2.4 per cent of GDP the following quarter, the research report said. Gross fixed capital formation (GFCF) growth in India accelerated sharply from 8.2 per cent in 2002 to 17.5 per cent in 2004, and the pace of growth held firm at 16.2 per cent in 2005-07. In that cycle, the fiscal deficit was already consolidated, the banking system's non-performing loan issues were cleaned up and the economy was poised for a capex upswing. "However, the initial pick-up in private consumption growth was more modest, averaging just 4.8 per cent in 2003-04," it said. In the current cycle, real GFCF growth continued to hold strong at 10.5 per cent in October-December, staying above the pre-Covid 2017-18 average of 9.6 per cent. "This has been mainly driven by public capex so far, as the corporate sector has been working through multiple shocks from previous years that have weighed on its ability to invest," it said adding now that corporate profit (based on bottom-up company data) to GDP has picked up from a trough of 1.1 per cent in F2020 to 5.4 per cent in F2023, early signs of private capex gaining momentum are being seen. On the flip side, private consumption is still relatively weak, tracking at just 3.5 per cent in the December quarter, below the pre-Covid 2017-18 average of 6.5 per cent. Morgan Stanley said policymakers' concerted policy push on supply-side reforms in recent years has meant that real government fixed capex growth inflected higher from F2020. Government fixed capex as a percentage of GDP rose from a trough of 3.6 per cent in F2019 to 4.0 per cent in F2021, again picking up ahead of private capex. "A capex-led growth cycle can extend expansion, as rising investment to GDP ratios drive capital deepening and boost productivity growth. The deployment of surplus labor as capex creates employment opportunities can lead to higher income and savings in an economy and ensure the current account balance remains in a manageable range, even as investment to GDP rises," it said adding the public capex-led nature of the present cycle in India plays an even more important role for the sustainability of the overall capex cycle. Infrastructure projects tend to face long gestation periods but generate large positive externalities. "In that sense, we believe it is important for the public sector to undertake such spending to ensure a clearer runway for private capex to take off by eliminating supply-side bottlenecks ahead of time," it added.

India's economic boom feels like 2003-07: Morgan Stanley

In a rather dampened <keyword id="19915531" type="General" weightage="20" keywordseo="forecast" source="keywords">forecast</keyword> for the Indian economy, <keyword id="19908266" type="General" weightage="20" keywordseo="ICRA" source="keywords" meta.keywordsubtype="org" meta.entityname="ICRA" meta.hostid="261" meta.entityid="ICRA">ICRA</keyword> has forecast a sharp <keyword id="20637625" type="General" weightage="20" keywordseo="slowdown" source="keywords">slowdown</keyword> in India's <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword>. The credit rating agency has projected a year-on-year expansion of 6.0% in <keyword id="22106354" type="General" weightage="20" keywordseo="Q1-FY2025" source="keywords">Q1 FY2025</keyword> — the lowest in the last six quarters. In Q4 FY2024, India recorded an impressive 7.8%. The Reserve Bank of India had expected the growth momentum to continue this financial year as well. Earlier this month, the RBI governor had projected a 7.1% growth in Q1, while the growth rate for the entire financial year FY2024-25 was projected to be at 7.2%. The central bank had attributed this potential robust growth to improved agricultural activity, sustained buoyancy in services activity, healthy balance sheets of banks and corporates, thrust on capex by the government, visible signs of pick up in private investment, and improving prospects of global trade. However, RBI’s growth projections for this financial year were slightly moderated due to lower-than-anticipated corporate profitability, general government expenditure, and core industries output. As per ICRA, the sharp drop in GDP growth is primarily due to parliamentary elections and a contraction in government capital expenditure weakening urban consumer confidence. Another main cause could be the weakening urban consumer confidence, which reported a surprising downtick in the May and July 2024 rounds of the Central Bank’s Consumer Confidence Survey. “The lingering impact of last year’s unfavourable monsoon and an uneven start to the 2024 monsoon prevented a broader improvement in rural sentiment. Lower volume growth combined with diminishing gains from commodity prices weighed upon the profitability of some of the industrial sectors. The heat wave also affected footfalls in various service sectors, even as it provided a significant boost to electricity demand,” said Aditi Nayar, Chief Economist at ICRA. Despite the Q1 slowdown, ICRA expects economic activity to pick up in the latter half of FY2025, projecting an overall GDP growth of 6.8% for the full year, with a potential to exceed 7% in the second half. The agency expects decelerated growth in Gross Value Added (GVA) as well, easing to 5.7% in Q1 FY2025 from 6.3% in the previous quarter. This slowdown is primarily attributed to a decline in industrial growth, which is predicted to moderate to 6.4% from 8.4%, along with slight reductions in the services sector's growth and a modest improvement in agricultural GVA. The difference between GDP and GVA growth is expected to narrow to around 30 basis points (bps) in Q1 FY2025, down from 148 bps in the previous quarter, due to lower growth in net indirect taxes amid a rise in government subsidies. ICRA's analysis indicates that industrial GVA growth is likely to moderate in Q1 FY2025, with a slowdown in manufacturing and construction offset by growth in electricity, mining, and quarrying. Additionally, a contraction in government and state capital expenditure, along with a significant drop in new project announcements, has contributed to the overall slowdown. Manufacturing profit margins have also been under pressure due to rising global commodity prices and narrowing deflation in input costs, which, combined with slower growth in manufacturing output, suggests a deceleration in manufacturing GVA growth. In the agricultural sector, GVA growth is projected to be modest at 1.0% in Q1 FY2025, amidst declining output from most rabi and summer crops and a deficient rainfall in June 2024. With growing concerns around inflation and unemployment in India and across the world, the latest forecast could further fuel the fears around recession and slowdown in major economies. However, a much clearer picture will emerge with the actual quarterly estimates of GDP for Q1 from the National Statistical Office (NSO) next week. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/digital-initiatives-to-triple-indian-retail-borrowing-to-usd-2-5-trillion-by-2030-sp-global/articleshow/112263945.cms" data-type="tilCustomLink" target="_blank">Digital initiatives to triple Indian retail borrowing to USD 2.5 trillion by 2030: S&amp;P Global</a>

ICRA forecasts slowdown in India's economy: GDP growth expected to hit six-quarter low in Q1 FY2025

Global brokerage firm <keyword id="19977638" type="General" weightage="20" keywordseo="Morgan-Stanley" source="keywords" meta.keywordsubtype="org" meta.entityname="Morgan Stanley" meta.hostid="261" meta.entityid="Morgan Stanley">Morgan Stanley</keyword> expects <keyword id="19956758" type="General" weightage="20" keywordseo="Finance-Minister" source="keywords">Finance Minister</keyword> <keyword id="19916618" type="General" weightage="20" keywordseo="Nirmala-Sitharaman" source="keywords">Nirmala Sitharaman</keyword>'s upcoming <keyword id="19936553" type="General" weightage="100" keywordseo="Budget" source="keywords">Budget</keyword> to focus on the government's <keyword id="20634687" type="General" weightage="20" keywordseo="road-map" source="keywords">road map</keyword> for '<keyword id="19916816" type="General" weightage="20" keywordseo="Viksit-Bharat" source="keywords">Viksit Bharat</keyword>' by 2047 and spell out the <keyword id="22362494" type="General" weightage="20" keywordseo="medium-term-plan" source="keywords">medium-term plan</keyword> for <keyword id="20101140" type="General" weightage="20" keywordseo="fiscal-consolidation" source="keywords">fiscal consolidation</keyword>. "With fiscal prudence guiding the overall fiscal policy stance, we expect the focus to remain on <keyword id="22362493" type="General" weightage="20" keywordseo="capex-expenditure" source="keywords">capex expenditure</keyword> over revenue expenditure and targeted social sector spending with a focus on improving access to physical, social and digital infrastructure," said Morgan Stanley's research report on Wednesday. Sitharaman is scheduled to present the full Budget for fiscal 2024-25 on July 23, which will be the first major policy document of the new government. The brokerage firm expects the central government's fiscal deficit target to be retained at 5.1 per cent of GDP in 2024-25 in line with the interim budget (against 5.6 per cent of GDP in 2023-24) and to be on track to attain the target of 4.5 per cent of GDP by the next financial year. "The fiscal headroom has improved with a larger-than-expected transfer of surplus from the RBI, which, in our view, will help to maintain the momentum on capex expenditure and increase targeted welfare spending. In this context, we see the possibility of a slightly lower fiscal deficit target (tad below 5.1 per cent of GDP), given the support from tax and non-tax revenues," it said. It also expects the Budget to provide focus on the government's road map for 'Viksit Bharat' (developed nation) by 2047. In addition, the budget could also give a road map for a medium-term plan for fiscal consolidation beyond 2025-26, it added. The report said the impact of the Budget on the stock market has been on a secular decline, albeit actual performance is a function of pre-budget expectations (as measured by market performance ahead of the budget). As of now, the market seems to be approaching the Budget with exuberance and could be dealing with both volatility and a correction post-budget, if history is a guide, it said.

Morgan Stanley expects Budget to focus on road map for 'Viksit Bharat'

New Delhi: The <keyword id="20072894" type="General" weightage="20" keywordseo="rural-economy" source="keywords">Rural economy</keyword> of <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword> has emerged as a significant driver of <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword>, outpacing urban areas largely due to increased <keyword id="20155204" type="General" weightage="20" keywordseo="government-spending" source="keywords">government spending</keyword> in the recent quarters, highlighted a report by <keyword id="20548750" type="General" weightage="100" keywordseo="Anand-Rathi" source="keywords" meta.keywordsubtype="org" meta.entityname="Anand Rathi" meta.hostid="153" meta.entityid="Anand Rathi">Anand Rathi</keyword>, a financial service company. "<keyword id="20109648" type="General" weightage="20" keywordseo="rural-india" source="keywords">Rural India</keyword> continues to outpace urban areas in growth, largely due to a significant rise in government spending in rural regions in the last quarter," said the report. For the coming months, the report stated that the growth trend in the rural economy is expected to continue, although a moderation in growth may occur. It also added that the favourable monsoon conditions and improved sowing data are anticipated to sustain the upward trajectory in <keyword id="19931574" type="General" weightage="20" keywordseo="rural-demand" source="keywords">rural demand</keyword>, providing a buffer against potential economic uncertainties. "We expect this growth to moderate following the elections, favourable monsoon conditions and improved sowing data should sustain the upward trend in rural demand". The report also highlighted that the government's ambitious capital expenditure plans, amounting to Rs 11.1 trillion, are expected to stimulate infrastructure development, further enhancing rural economic prospects The rural economy plays a crucial role in the development of the country because a majority of the population still resides in rural areas. As per the Economic Survey of 2022-2023 around 65 per cent of India's population lived in rural areas in 2021. The report also highlighted that India stands out among emerging economies due to its strong GDP growth. Last year, India grew by more than 8 per cent, and the <keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords" meta.keywordsubtype="org" meta.entityname="RBI" meta.hostid="153" meta.entityid="RBI">RBI</keyword> expects a 7.2 per cent growth rate for FY25. The financial outlook is positive, with efforts to cut the fiscal deficit to 4.5 per cent. The report also noted that India's credit rating may improve because of the strong tax revenue and a large dividend from the RBI which will lead to a lower fiscal deficit than expected. "The fiscal outlook appears promising, with continued focus on reducing the fiscal deficit toward the 4.5 per cent target. Strong tax collections and a substantial RBI dividend may enable the fiscal deficit to come in lower than expected, which could potentially lead to an improved sovereign rating" said the report.

Rural economy is driving India's growth, Govt capex in infra will stimulate it: Anand Rathi report

July is abuzz with news of the upcoming union budget, which Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> will present on July 23, 2024. But you couldn't care less, because you’ve already decided that you’ll tune it all out, as soon as our beloved Nirmala Tai starts her budget presentations in the parliament. We get it, having spent less than three decades on this planet, we GenZers have already had a tough time understanding the complexities of the modern world affecting our daily life. When it comes to our national finances, we just can’t seem to make any sense of the words spoken, and the general vibe of complicated terms like <keyword id="19942084" type="General" weightage="20" keywordseo="Fiscal-Deficit" source="keywords">fiscal deficit</keyword> and <keyword id="20018917" type="General" weightage="20" keywordseo="Capital-Expenditure" source="keywords">capital expenditure</keyword> is extremely off-putting! So, why bother? Don’t worry, we have got you covered. As we step into an unforgiving adult world, it's time to tune in, as the Union Budget often has direct implications on your personal finances. To help you start, here’s your very own budget glossary, which will let you decode all budget-related mumbo-jumbo, the <keyword id="20246469" type="General" weightage="20" keywordseo="GenZ" source="keywords">GenZ</keyword> way. A: Annual Financial Statement Think of this as a simple breakdown of how much money the government has received and spent over three time periods — the current year, the previous year, and the budget (upcoming) year. This is required under Article 112 of the Indian Constitution. It has three parts: <ul><li>The consolidated fund of India, consisting of revenue received by the government as direct and indirect taxes, and loans</li><li>Contingency fund of India for emergencies, or disaster management</li><li>Public Account of India — our money that the government receives under various schemes like PPF, small savings and more </li></ul>B: <keyword id="20313429" type="General" weightage="20" keywordseo="Budget-Estimates" source="keywords">Budget Estimates</keyword> Say you set aside Rs 25,000 this month from your salary, to buy an uber-cool smartwatch. But you find a sweet steal deal on Amazon and manage to grab it for just Rs 20,000. The Rs 25,000 you set aside from your monthly budget was an estimate. In the same way, the government sets aside a specific sum for every project or scheme based on its estimates, but in the end, the actual expenses may vary. C: Capital Expenditure See the government allocating funds left, right and centre for building highways, improving rail connectivity, or developing other infrastructures? That's capital expenditure, or capex. The idea of undertaking capex is to build something for the long term, something which keeps contributing to the economy’s growth, long after its creation. D: Divestments Divesting means to sell off and let go of one’s stakeholding or ownership in a company or enterprise. The government generally divests its shares in various public undertakings to raise funds. Remember the much-touted IPO of Life Insurance Corporation of India (LIC) LIC’s IPO in May 2022? That was the government divesting 3.5% of its share in the insurance behemoth. E: Economic Survey This is a snapshot (and a pretty long one) of all the major economic developments that have taken place in the country during a particular financial year. It is usually released a day before the full budget, highlighting the performance of various government schemes, trends seen in various sectors of the economy, the policy initiatives taken by the government, and where the economy is going in the near future. F: Fiscal Deficit As daunting as it sounds, what if I tell you that most of us are perennially in a state of fiscal deficit? Surprised? It's simply when your spending exceeds your earnings. So, it gives you an estimate of how much you need to borrow, to tide over. Turns out, the government isn't faring great either, given that its fiscal deficit, or the difference between its revenue and expenditure currently stands at a staggering Rs 16,85,494 crores, or about 5.1% of India’s <keyword id="19904293" type="General" weightage="20" keywordseo="GDP" source="keywords">GDP</keyword>. G: GDP Gross Domestic Product is the collective monetary value of all the goods produced and services rendered in the country, during a particular period. In other words, it is the combined total of the economic output that is generated by 141.72 crore Indians like us, expressed monetarily. As of 2024, India’s GDP stood at $3.9 trillion. GDP is a measure of how healthy and strong an economy is. Some of the world’s biggest economies, like China and the US, have a GDP of $18.5 trillion and $28.7 trillion, respectively. G: <keyword id="20411624" type="General" weightage="20" keywordseo="Gender-Budgeting" source="keywords">Gender budgeting</keyword> When achieving gender equality, and addressing challenges women face by way of allocating resources and formulating policies accordingly becomes key to preparing a budget, it's known as gender-based budgeting. Such a budget ensures that distribution of public resources between men and women is not heavily skewed towards the former. In 2023-24, India’s gender budget swelled 4.3% to Rs 2.23 trillion, which is about 4.9% of the overall budget. H: <keyword id="21458145" type="General" weightage="20" keywordseo="Household-Income" source="keywords">Household Income</keyword> The total money earned by everyone in your home makes for your household income. So, if you are a family of 4, where your younger sister is studying, and you, along with your parents earn a total of say Rs 25,00,000 per annum, that is your household income. As of 2022-23, India’s average household income stood at Rs 3.6 lakh/annum. O: Outcome of Budget This is a statement of the outcomes achieved by various government departments with the budget allocated to them last year. It answers questions like was the money spent on purposes it was sanctioned for? What was the output achieved? Think of this as a report card, detailing your progress, or money spent during the year, and is indicative of what more needs to be done to achieve the desired results. R: Revised estimates Say are saving up Rs 70,000 for your buying the latest iPhone. But a few months down, you realize that the price point has changed as the release date approaches, and it is likely to cost about Rs 85,000 now. You see, your initial estimate was Rs 70,000, but then, you revised your estimated requirement to Rs 85,000. The government works no differently. 6-months after the budget presentation, the government assesses if the money granted to scheme A is sufficient, or does it need more funds. Are there any other schemes that need more fund allocation? The new, revised estimates then become the benchmark of functioning, against which actual expenditures are compared. S: Subsidy This is a sum that the government gives to an industry or business, with the objective to keep its prices for the general public low. The government pitches in to pay a part of production costs, so that the public does not end up bearing the entire burden of the cost. Remember the recently discontinued FAME (Faster Adoption and Manufacturing of Electric Vehicles) subsidy on electric vehicles (EV) schemes, which boosted EV adoption amongst Indians. Imagine your elder brother or sister funds 40% of your much awaited Goa trip, without wanting anything in return, for the simple purpose of you having fun! That's them subsidizing your travel! V: Vote on Account Remember Nirmala Tai presented an interim budget this year in February, given that elections were due in May? In an election year, the incumbent government does not present a full fledged budget, because who knows if they’ll be voted back to power or not? So, to tide over the next few months before a new government is brought back to power, the government seeks vote on account, which is basically permission or grant needed to fund expenditures for the next few months. Z: Zero-based budgeting The term refers to a budgeting method in which all expenses must be justified for each new period, starting from a "zero base." Think of it like starting with a blank piece of paper every time you make a plan for how to spend your money. Instead of just changing what you spent last year, you think carefully about every rupee you need and why you need it. In 1986, the Indian government implemented ZBB as a system for determining the Expenditure Budget, making it compulsory for all ministries. However, implementation and application of this approach have remained inconsistent in the later years. So, it's time to listen to Tai with rapt attention, and flaunt your newfound budget dictionary to those still afraid of endless budget jargons!

Budget A-Z, for the GenZ: A fun and handy guide for major terms around upcoming Union Budget

In response to higher-than-expected tax revenue and a record surplus transfer from the Reserve Bank of India (RBI), the Indian government is considering an 8-10% increase in <keyword id="20018917" type="General" weightage="20" keywordseo="capital-expenditure" source="keywords">capital expenditure</keyword> (capex) for the fiscal year 2025, according to Pantomath Group's quarterly report, "Market Kaleidoscope: Quarterly Market Insights." This adjustment could raise the capex from the previously allocated Rs 11.11 lakh crore, aiming to bolster infrastructure and economic growth. This fiscal boost comes as India reaches a historic financial milestone. The total market capitalization of all stocks listed on the Bombay Stock Exchange (<keyword id="19895774" type="General" weightage="20" keywordseo="BSE" source="keywords">BSE</keyword>) briefly surpassed $5 trillion for the first time, placing India among global giants such as the US, China, Japan, and Hong Kong. India's primary market is set for a dynamic period, with 55 companies planning to raise over Rs 68,000 crore through Initial Public Offerings (IPOs). The first half of FY2025 has already seen 35 mainboard IPOs, collectively raising around Rs 32,000 crore with an average subscription rate of 61 times. The Indian market maintained a positive outlook in the first quarter of FY2025, driven by strong Q4FY24 earnings, favorable economic data, and positive global cues. Despite early June volatility following the 2024 <keyword id="19895394" type="General" weightage="20" keywordseo="lok-sabha" source="keywords">Lok Sabha</keyword> election results, market sentiment improved with the BJP securing 272 seats and a total of 292 seats for the NDA with allied support. This political stability under Prime Minister Narendra Modi's leadership is expected to promote long-term economic growth, with a focus on infrastructure, electric mobility, startup support, power distribution, digital privacy, and healthcare initiatives. Corporate India's performance in the March quarter of FY2024 met expectations, showing double-digit growth in net profit and single-digit revenue increases. Non-lending companies experienced moderate operating margin expansion due to favorable commodity prices and cost controls. The peaking interest rates and continuity of <keyword id="19978691" type="General" weightage="20" keywordseo="government-policies" source="keywords">government policies</keyword> are anticipated to support healthy corporate growth in FY2025. <h2>Growth to continue</h2>The government's push for increased <keyword id="20068449" type="General" weightage="20" keywordseo="ethanol-production" source="keywords">ethanol production</keyword> targets a 20% blending by 2026, benefiting ethanol-heavy sugar companies and promoting biofuel goals. The real estate market is projected to grow significantly, requiring Rs 14 lakh crore in debt financing from 2024 to 2026. This growth will positively impact the banking and financial sectors. Major telecom operators have raised tariffs post-election, potentially improving sector financials and paving the way for sector re-rating. Major cement players are expanding through acquisitions, with an expected 6-7% compounded growth and market dominance by the top five players by March 2025. FMCG Companies expect recovery in rural business due to factors like a normal monsoon, robust crop yields, and government measures, maintaining robust rural demand. The potential roll-out of the FAME 3 Scheme to support <keyword id="19963112" type="General" weightage="20" keywordseo="electric-vehicle-sales" source="keywords">electric vehicle sales</keyword> is anticipated, with a budgetary allocation of around Rs 10,000 crore. Sectors such as auto, cement, defence, railways, consumer durables, energy, and banking are expected to outperform. Lagging sectors like IT and specialty chemicals offer value-buying opportunities at lower levels. The structural bull market for Indian equity is supported by strong domestic fundamentals and government reforms, with a positive medium- to long-term market outlook. Globally, the US market showed resilience, except for the Dow Jones. The Federal Reserve maintained interest rates at 5.25-5.50%, awaiting inflation to move towards the 2% target before considering rate cuts. The US GDP grew at 1.4% annually in Q1 2024, with mixed economic indicators highlighting both strengths and challenges. The Indian <keyword id="19926041" type="General" weightage="20" keywordseo="IPO-market" source="keywords">IPO market</keyword> has seen significant growth, with a surge in companies seeking to list shares and a rise in capital raised. The first half of 2025 saw strong retail investor participation, reflecting confidence in India's growth prospects. Mahavir Lunawat, Managing Director, Pantomath Capital Advisors Private Limited, said, "Favourable market conditions, high liquidity, a conducive growth environment with stable interest rates, and benign inflation have facilitated a boom in the IPO market. The IPO market will experience a stronger pull post-budget. India is set to become the new equity funding frontier for global corporations." He further added. "We are on the brink of sustained, long-term momentum in the IPO market, with this year potentially becoming the best for IPOs. India's solid macroeconomic environment and promising growth prospects create an ideal backdrop for this vibrant IPO market. Additionally, there is robust participation from both domestic institutional investors and retail investors." With the Indian government's potential capex increase and the robust primary market activity, the <keyword id="19948184" type="General" weightage="100" keywordseo="Indian-economy" source="keywords">Indian economy</keyword> is poised for sustained growth. The upcoming period is expected to see heightened market activity, further IPOs, and economic stability, creating a conducive environment for investment and development.

India may boost FY25 capex by 8-10% amid surging revenues and record RBI surplus, says Market Kaleidoscope report

<ul class="summary-list"><li>Stocks were mostly flat on Thursday after a deep rout on Wednesday.</li><li>The Nasdaq and the S&amp;P 500 are coming off their worst single-day drops since 2022.</li></ul>US stocks were little changed on Thursday, looking to erase some of the deep losses incurred in Wednesday's session. Traders were assessing tech weakness and hotter-than-expected GDP data for the second quarter.The Nasdaq and S&amp;P 500 are looking to recover from their worst single days since 2022, which saw them slip 3.6% and 2.3%, respectively.Investors' top concern is slowing tech earnings growth after Tesla and Alphabet both reported disappointing results on Tuesday. Following a period of stellar growth and stock gains, markets are assessing whether the latest sell-off is full-on correction or merely a soft reset."There are a cocktail of reasons affecting different parts of the market ranging from cost and profitability of AI investments, weakening consumer outlook, trade tariffs and sanctions on sales to China and the anticipation of a new rate cutting cycle from the Federal Reserve," Mike Owens, senior sales trader at Saxo, said Thursday."Some of the equity sell off feels completely logical, investors can crystallize tech stock profits and still lock in over 4% yield on government bonds rather than risk losing 5-6% a day on some of the favoured equity names."Tech bulls see the sell-off as a short-lived blip, arguing that the market is still in the earliest stages of an AI capex boom that will continue to drive fresh gains."Patience will be required on the AI spending payback as we have discussed on Microsoft, Google, Meta, Tesla, Amazon, Apple and many other tech names," Wedbush Securities' Dan Ives wrote Thursday.Here's where US indexes stood shortly after the opening bell on Thursday:<ul><li><a target="_blank" href="https://markets.businessinsider.com/index/s&amp;p_500?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">S&amp;P 500</a>: 5,424.92, down less than 0.1%</li><li><a target="_blank" href="https://markets.businessinsider.com/index/dow_jones?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Dow Jones Industrial Average</a>: 39,973.61, up 0.3% (120 points)</li><li><a target="_blank" href="https://markets.businessinsider.com/index/nasdaq_composite?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Nasdaq composite</a>: 17,278.95, down 0.4%</li></ul>Meanwhile, investors are digesting second-quarter GDP data, which showed the US economy grew by 2.8%. That's much higher than estimates of 2.1% and higher than the first quarter's revised reading of 1.4%."The US economy is much stronger than people realize and to the extent that markets were worried about a growth slowdown, they should breathe a sigh of relief after this morning's GDP number," Chris Zaccarelli, CIO of Independent Advisor Alliance, said."The 2.8% growth in the economy above and beyond inflation is very impressive, and the recent pullback in stocks will likely prove to be a buying opportunity."The data could reset rate-cut bets as the Fed deals with a hotter economy and less wiggle room to slash interest rates multiple times in the last few months of the year.Markets still see an 85% chance the Fed cuts rates at the September meeting, and strong odds of cuts at the November and December meetings, according to the CME FedWatch Tool.Next up on Friday, traders will be assessing the Fed's favorite inflation gauge. Personal consumption expenditures are expected to show inflation rose 2.5% last month.Here's what else is going on today:<ul><li><a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-signals-flash-outlook-healthy-bull-rally-more-upside-2024-7">There are four bullish signals</a> pointing to more gains ahead for the stock market, Bank of America said.</li><li>There's a <a target="_blank" class="" href="https://www.businessinsider.com/stock-market-outlook-the-big-rotation-trade-is-from-cash-to-stocks-2024-7">big rotation from cash to stocks</a> — and it could help push the S&amp;P 500 up 17% by the end of the year, according to UBS.</li><li>The stock market is approaching <a target="_blank" class="" href="https://www.businessinsider.com/stock-market-outlook-q2-gdp-pce-earnings-drive-stocks-higher-2024-7">two catalysts that could help spark the next leg of the bull run</a>.</li><li><a target="_blank" class="" href="https://www.businessinsider.com/fed-rate-cut-outlook-inflation-housing-job-market-unemployment-economy-2024-7">The Fed is going to cut rates only once in 2024</a> as shelter inflation is too high and the job market remains too hot, Vanguard said.</li></ul>In commodities, bonds, and crypto:Oil futures were down. <a target="_blank" href="https://markets.businessinsider.com/commodities/oil-price">West Texas Intermediate</a> crude oil dipped 0.7% to $77.06 a barrel. <a target="_blank" href="https://markets.businessinsider.com/commodities/oil-price">Brent crude</a>, the international benchmark, was down 0.9% to $81 a barrel.<ul><li><a target="_blank" href="https://markets.businessinsider.com/commodities/gold-price">Gold</a> dropped 2% to $2,363.90 an ounce.</li><li>The 10-year Treasury yield dropped six basis points to 4.219%.</li><li><a target="_blank" href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin </a>fell 4% to $64,303.</li></ul>

Stock market today: Stocks waffle after sell-off as traders mull tech weakness and GDP data     

New Delhi, <keyword id="19955404" type="General" weightage="20" keywordseo="finance" source="keywords">Finance</keyword> Secretary <keyword id="20317960" type="General" weightage="20" keywordseo="t-v-somanathan" source="keywords">T V Somanathan</keyword> has said the government's resolve to bring down the fiscal deficit by 70 basis points to 5.1 per cent in 2024-25 is ambitious but achievable in view of the tax buoyancy and expenditure management. Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> in the interim Budget presented on Thursday refrained from announcing any populist measures but significantly trimmed the fiscal deficit to 5.1 per cent of the Gross Domestic Product (GDP) next fiscal and 4.5 per cent in FY26. "So it is ambitious but it is also realistic. There are three pillars on which this is based. One is we have assumed growth in tax revenue about 11.5 per cent. I think that's a very realistic assumption," Somanathan told PTI Videos in an interview. Besides, he said, the government has projected a slight increase in non-tax revenue from a high base during the current financial year. On the expenditure side, he said, "<keyword id="19951996" type="General" weightage="20" keywordseo="capex" source="keywords">Capex</keyword> has increased 11.1 per cent... the revenue expenditure we believe is realistically projected. We have been helped by the fact that some of our subsidies have not grown and whether it is food or fertiliser. Both of them are either stagnant or slightly declined. <keyword id="20090941" type="General" weightage="20" keywordseo="fertilizer" source="keywords">Fertilizer</keyword> is assisted by decline in commodity prices globally." The government has projected the fertiliser subsidy of Rs 1.64 lakh crore for the next financial year as against Rs 1.88 lakh crore allocated for the current fiscal. Similarly, food subsidy outgo will come down to Rs 2.05 lakh crore compared to Rs 2.12 lakh crore for the current fiscal. "On the basis of three parts, reasonable revenue growth and reasonable increase in non-tax revenue that is tight control over avoidable expenditure and an optimal balanced increase in capital expenditure we are quite confident that we will achieve this (fiscal deficit target of 5.1 per cent of GDP)," he said. In absolute terms, the fiscal deficit would be Rs 16,85,494 crore against Rs 17,34,773 crore for the current fiscal. For the Budget calculation purposes, the government projected nominal GDP growth of 10.5 per cent for the next financial year against the 11 per cent estimated for the current fiscal. The nominal GDP for BE 2024-25 has been projected at Rs 3,27,71,808 crore, assuming 10.5 per cent growth over the estimated nominal GDP of Rs 2,96,57,745 crore, as per the First Advance Estimates of FY24. To meet the fiscal deficit, the gap between revenue receipt and expenditure, the government raises funds by issuing bonds in the market. The gross and net market borrowings through dated securities during 2024-25 are estimated at Rs 14.13 lakh and Rs 11.75 lakh crore, respectively. Dismissing criticism on capital expenditure (capex), Somanathan said, "There is an increase of 11.1 per cent over a very high base. So this is an increase of more than Rs 1 lakh crore... Earlier, we had a small base but now we have a large base so it can only be a small increment." Capital expenditure of Rs 11.11 lakh crore cannot be done by signing a cheque, he said, adding that it requires action on the ground because there are issues of permission, land acquisition, and construction. "So it is a very realistic and balanced provision, which is what the economy needs right now," he said.

Fiscal deficit target of 5.1% ambitious but achievable: Finance Secretary

<ul><li><keyword id="2887509" type="General" weightage="80" keywordseo="polycab" source="Orion">Polycab</keyword> has given multibagger returns in 2023, as it zoomed by 117%.</li><li>It’s a leader in the wire &amp; cables market with 22-24% organized market share.</li><li>Jefferies says that the stock is a good play on India capex. </li></ul>Mumbai-based wire and cable company has been amongst the top gainers in the last few sessions, as the benchmark indices went on a bull run? What’s making people rush in to buy midcap stock, while the economy presents a robust picture. Polycab was added to MSCI’s domestic index in late November. This move will trigger fund buying in the stock, which will support its stock price at its heights. In spite of giving multibagger returns of 117% this year, it’s one of those few midcap stocks that’s not run up ahead of its target price set by analysts (see table). There is more juice left in the stock as the wire and cable maker set a target to achieve ₹20,000 crore annual revenues by FY26. Its revenues for FY23 were at ₹14,107 crore. “The company is on track to achieving this milestone well before time but indicated that revisions to the target, if any, will be made only at the end of FY24. Polycab is also nearing its goal of 10% exports in the topline, reaching 9.3% in Q2FY24,” said a report by BobCaps. Target price of Polycab <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Brokerage </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> Target Price </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Jefferies </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹6,220 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">BobCaps </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹6,100 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Centrum </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹5,675 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Axis Securities </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹5,509 </td></tr></tbody></table> Demand’s on the move The company’s revenues rose by 33% in the first half of the financial year, the company expects to maintain the momentum in the second half too. All thanks to favourable demand conditions for its core wires and cables business due government’s infrastructure push as well as construction activity in the real estate sector. “We expect Polycab to register 19% revenue compounded annual growth rate (CAGR) over FY23-26. Volume growth prospects and margin profile for cables &amp; wires remains strong led by rising industrial and infra capex,” said a report by Centrum. Its high-margin B2C business of fans and lighting, however, has been growing slower, at around 8% in Q4FY24 as compared to its core business. “Management believes the brand repositioning will bolster sales traction, deepen the company’s pan-India presence and particularly help the fast-moving electrical goods (FMEG) business. A proxy play on India capex Jefferies also believes that Polycab is a good play on India capex. As India’s capex increases, its business will grow. That’s because the leader in the Indian C&amp;W industry, with a 22-24% share in the organized market. “On the private side, average industry capacity utilization stands at 70-75%, which could entail fresh capacity adds across many sectors. On the public side, 2023 budgetary allocation has been directionally positive for capex and infra,” says Jefferies. More data like heightened industrial activity, and India’s GDP projected to grow at 7% in FY24, will all add to its appeal.

This multibagger midcap stock is a proxy play on India capex

<ul><li>Manufacturing, mining and services sectors contributed to <keyword id="44910" type="General" weightage="20" keywordseo="gdp-growth" source="Orion">GDP growth</keyword> in Q2.</li><li>The GVA in the manufacturing sector showed a growth of 13.9% in the second quarter.</li><li>The output of eight key infrastructure sectors jumped 12.1% in October 2023. </li></ul>India's economy grew 7.6% in the September quarter of this fiscal and remained the fastest-growing large economy, mainly due to better performance by manufacturing, mining and services sectors, the government data showed on Thursday. The gross domestic product (GDP) expanded by 6.2% in the July-September quarter of 2022-23. India remained the fastest-growing major economy, as China posted a 4.9% growth in July-September 2023. “The 7.6% GDP growth in the September quarter has far exceeded the RBI’s 6.5% estimate for the period, ensuring that India remains on the growth path despite multiple global headwinds arising from economic and geo-political uncertainties,” said Vivek Rathi, National Director Research, Knight Frank India. Manufacturing picks up pace, agriculture slows The gross value added (GVA) in the manufacturing sector showed a growth of 13.9% in the second quarter of the current fiscal compared to a contraction of 3.8% in the year-ago period. “Manufacturing and construction were the clear leaders with growth of 13.9% and 13% respectively. In the case of manufacturing, high profit growth contributed to the buoyancy while construction was up due to housing as well as government capex,” said Madan Sabnavis, chief economist at Bank of Baroda. As per the data, the output (GVA) in the 'mining and quarrying' accelerated to 10% in the second quarter against a contraction of 0.1% a year ago. Electricity, gas, water supply and other utility services' grew by 10.1% from 6.1%. “Double digit growth in the industry sector, especially in manufacturing and construction is suggesting that businesses ramped up production to meet the pent-up demand just before the festivals,” said Rumki Majumdar, Economist, Deloitte India. According to the <keyword id="7734679" type="General" weightage="50" keywordseo="national-statistical-office" source="Orion">National Statistical Office</keyword> (NSO) data, the agriculture sector GVA growth decelerated to 1.2% in the September 2023 quarter from 2.5% a year ago. This was expected due to seasonal effect, say economists. The construction sector recorded a growth of 13.3% year-on-year in the second quarter compared to 5.7%. The expansion in financial, real estate and professional services' GVA was 6%, down from 7.1% in the year-ago quarter. “As a derived demand, the upturn in the capex cycle and the strengthening domestic profile of consumers should prove to be strong drivers of India's real estate market. The continuation of the real estate upcycles, coupled with the increased focus on infrastructure development will support the sustained growth of the construction sector,” said Rathi. Meanwhile, the output of eight key infrastructure sectors jumped 12.1% in October 2023 against 0.7% expansion in the year-ago period on account of a sharp uptick in production of coal, steel, cement and electricity, according to the official data. The government's fiscal deficit at the end of October touched 45% of the full-year budget estimate, according to data released by the Controller General of Accounts (CGA) on Thursday. “Personal consumption growth lost momentum and grew only 3.1% YoY. However, it could be a possibility that consumers postponed their spending for the upcoming festive months and may have reallocated funds for investments. Higher consumer spending may get reflected in the October-December quarter,” said Majumdar. (With PTI inputs)

India's GDP grows 7.6% in September quarter, beats RBI estimates

<ul><li>Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> on Thursday presented the Interim Budget 2024-25.</li><li>This budget outlines expenditures and revenues till the formation of the next government.</li><li>Here are the top highlights and major announcements of the Interim Budget 2024-25.</li></ul> Finance Minister Nirmala Sitharaman while presenting the Interim Budget 2024-25 at <keyword id="19895397" type="General" weightage="20" keywordseo="parliament" source="keywords">Parliament</keyword> on Thursday, February 1 announced that the FY25 capex outlay has been increased by 11.1% to ₹11.11 lakh crore. The FY25 capex outlay is now at 3.4% of the GDP. Fiscal deficit, the gap between the government’s revenue and expenses, is expected to be 5.8% of gross domestic product, said the FM. “The gross market borrowing for the financial year ending March 2025 will be ₹14.3 lakh crore (less than the borrowing in the current financial year).” The FM began her speech by giving a summation of the Narendra Modi government's performance in the past ten years. "The Indian economy has witnessed positive transformation in the last 10 years. Our development steps have covered all elements of inclusivity," she said. This is the final budget of the second term of the Narendra Modi government before the country heads to elections later this summer. Sitharaman stressed on the government's aim to make India developed -- Viksit Bharat – by 2047. The government has tried to provide inclusive development and growth, both socially and geographically, she said in the opening minutes of her sixth budget speech as the country’s finance minister. It is to be noted that this Vote on Account or an Interim Budget is only for the next three months as the next government after the election will come out with a comprehensive budget for the financial year 2024-25 later. In other words, this budget outlines expenditures and revenues till the formation of the next government. Key announcements by Finance Minister Nirmala Sitharaman: <ol><li>No relief for taxpayers: Same tax slabs to continue, says FM. “I propose to retain the same tax rates for direct and indirect taxes.”</li><li>FY25 divestment target at ₹50,000 crore. The FY24 target has been curbed to ₹30,000 crore</li><li>Gross market borrowing for FY ending March 2025 will be ₹14.3 lakh crore.</li><li>FY25 capex outlay increased by 11.1% to ₹11.11 lakh crore. The FY25 capex outlay is now at 3.4% of GDP.</li><li>The revised estimate of the fiscal deficit is 5.8% of GDP. The FY25 fiscal deficit target is set at 5.1%.</li><li>The FY25 revenue deficit is set at 2% versus FY24 revised estimate of 2.8%</li><li>The FDI during 2014 to 2023 was $596 billion. India is negotiating bilateral treaties with foreign partners. FM adds that FDI is now “First Develop India”.</li><li>Three major economic railway corridors announced to boost GDP. This includes an energy mineral and cement corridor, port connectivity corridor and high traffic density corridor.</li><li>40,000 rail bogies to be converted to Vande Bharat standards. Airports have doubled to 149 in the last decade.</li><li>Boost for tourism: Projects for enhancing tourism revenue will be taken up, especially for islands, including Lakshawdeep.</li><li>FM says the government has assisted 25 crore people to escape from multidimensional poverty.</li><li>Free ration: Worries of food have been alleviated as 80 crore people are provided with ration.</li><li>Direct benefit of ₹34 lakh crore via Jan Dhan has led to savings of ₹2.7 lakh crore for the government.</li><li>The PM PM SVANidhi scheme has supported over 78 lakh vendors. Out of this, 2.3 lakh vendors have received loans more than two times.</li><li>11.8 crore farmers have been assisted under the PM Kisan Yojna.</li><li>₹30 crore Mudra loans have been given to women entrepreneurs in the last ten years.</li><li>Average real income of people has risen by 50%.</li><li>India-Middle East-Europe Economic corridor is a game changer for India and others.</li><li>Artisanal support: PM Vishwakarma Yojana provides end-to-end support to artisans and crafts people engaged in 18 trades.</li><li>GDP new definition: FM Sitharaman has said that the government is focussed on GDP (governance, development and performance)</li><li>Real estate boost: Government close to achieving the target of three crore houses under the PM Awas Yojana Grameen. Additional two crore houses to be built in five years.</li><li>Sustainability &amp; free electricity: Rooftop solarisation scheme announced to help one crore houses, enabling free electricity and selling of surplus energy. First three hundred units for solar homes.</li><li>Nari Shakti: FM says that female enrolment in higher education is up by 28% in 10 years in STEM courses. Free healthcare under Ayushman Bharat to be extended to Asha workers and Anganwadi workers.</li><li>Target for Lakhpati Didi scheme enhanced from 2 crore to 3 crore.</li></ol>

You Searched For "capex to GDP" and got 11 results

India's economic boom feels like 2003-07: Morgan Stanley

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Rural economy is driving India's growth, Govt capex in infra will stimulate it: Anand Rathi report

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India may boost FY25 capex by 8-10% amid surging revenues and record RBI surplus, says Market Kaleidoscope report

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Stock market today: Stocks waffle after sell-off as traders mull tech weakness and GDP data

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Fiscal deficit target of 5.1% ambitious but achievable: Finance Secretary

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This multibagger midcap stock is a proxy play on India capex

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India's GDP grows 7.6% in September quarter, beats RBI estimates

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Interim Budget 2024: FY25 capex hiked 11%; no change in tax slab, says FM Sitharaman

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