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<div class="KonaFilter image-container display-table float_right"><div><div class="image">Punit Paranjpe/AFPIndian stockbrokers monitor share prices on the National Stock Exchange (NSE) terminal at a brokerage firm in Mumbai on July 3, 2014.</div></div></div>Indian equities climbed to a fresh high Monday for the second time in less than a week as parliament opened ahead of a budget expected to see the announcement of long-term reforms.
The Bombay Stock Exchange's key benchmark index, the Sensex, climbed 0.6 percent to 26,116.73 after reaching a high of 25,981.51 points on Friday.
"People are looking at the budget as the start point of a continuous reform process," said Harendra Kumar, head of brokerage Elara Capital in Mumbai.
Economists expect the budget to contain a credible outline of steps to steer India from a subsidy-laden, bureaucratic culture to a more business-friendly investment climate.
Since winning a landslide election in May, Prime Minister Narendra Modi has announced some tough, long-pending measures such as a rail fare hike.
While there has been a public outcry, India's financial markets have reacted positively to Modi's attempts to start overhauling an economy saddled with slow growth and weak public finances.
The Sensex has risen more than eight percent since Modi took office in June and more than 23 percent in 2014 as it became increasingly likely that his right-wing Bharatiya Janata Party would emerge victorious in the elections.
Still, analysts say Modi will struggle to shrink a yawning fiscal deficit and add that he faces the challenge of spiraling inflation as food prices soar on the back of a weak monsoon.
"We expect the main policy push to materialize only next year once the administration is firmly established and has dealt with near-term challenges such as poor rains," said HSBC in a note last week.
"Once adopted, it will also take some time before the reforms yield their expected growth dividend," it added.
Growth has slowed from near double-digits a few years ago to 4.7 percent in 2013, marking the second straight year of sub-five percent expansion, hit by high interest rates, falling investment and wage-eroding inflation.
<div class="nc_footer">
Copyright (2014) AFP. All rights reserved.
</div>

India Stocks Hit New High

<ul><li>The ₹600 crore initial public offering (IPO) of MTAR Technologies is set to hit the capital markets on March 3.</li><li>The company is backed by Mathew Cyriac, the former co-head of private equity firm Blackstone, who is the nominee director of the company.</li><li>It makes a wide range of products that meet the country’s nuclear, defence, and space sector's varied requirements.</li><li> ISRO, NPCIL, DRDO, Bloom Energy, Rafael are some of the clients.</li></ul>The ₹600 crore initial public offering (IPO) of defence components maker MTAR Technologies is set to hit the capital markets on March 3. The Hyderabad-based company has fixed the price band of the issue at ₹574-575 per share. The issue will remain open for subscription till March 5 and comprises a fresh issue of 21.48 lakh equity shares by the company and an offer for sale (OFS) of 82.24 lakh equity shares by promoters and shareholders. The company is backed by Mathew Cyriac, the former co-head of private equity firm Blackstone, who is the nominee director of the company. Incorporated in 1999, MTAR Technologies develops and manufactures components and equipment for the defence, aerospace and nuclear energy sectors. It provides a wide range of complex product portfolios that meet the Indian nuclear, defence, and space sector's varied requirements. Indian Space Research Organisation (ISRO), Nuclear Power Corporation of India (NPCIL), Defence Research and Development Organisation (DRDO), Bloom Energy, Rafael Advanced Defense Systems are some of the esteem clients. MTAR opens next week <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Particulars </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Issue details </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Opens on </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">March 3 </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Closes on </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">March 5 </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Price band </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹574 to ₹575 per share </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Minimum bid </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">26 equity shares </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Reservation for qualified institutional buyers </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">50% </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Reservation for non-institutional buyers </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">15% </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Reservation for retail investors </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">35% </td></tr></tbody></table> The company has also raised ₹100 crore in a pre-IPO fundraising from SBI Mutual Fund and Axis Mutual Fund. It will be using the proceeds to repay the debt of ₹63 crore and ₹95 crore will be utilised to fund working capital requirements in the next two years. As of December 31, the company’s total debt stood at ₹148.86 crore. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/as-per-rbi-governor-indias-digital-currency-is-in-progress-what-is-digital-currency-how-its-different-from-notes-and-coins/articleshow/81207129.cms">RBI's digital currency to be revealed 'very shortly' – governor says issues are still being sorted out internally</a><a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/as-per-rbi-governor-indias-digital-currency-is-in-progress-what-is-digital-currency-how-its-different-from-notes-and-coins/articleshow/81207129.cms"></a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/carl-peis-nothing-ropes-in-former-samsung-executive-manu-sharma-to-lead-its-india-operations/articleshow/81206446.cms">Carl Pei's Nothing ropes in former Samsung executive Manu Sharma to lead its India operations</a>

The ₹600 crore IPO of defence components maker MTAR is slated for next week — price band set at ₹574-575 per share

<keyword id="3658" type="COUNTRY" weightage="60" keywordseo="India">India</keyword>'s new central bank governor marked his first policy meeting Friday with a bold decision to hike interest rates, wrong-footing analysts and leading to sharp falls on the stock market.
Reserve Bank of India (RBI) chief Raghuram Rajan, who had warned he was prepared to be unpopular, ordered a rise in the benchmark interest rate from 7.25 to 7.50 percent at a mid-quarter policy review in India's financial centre Mumbai.
The Bombay Stock Exchange Sensex index fell 2.55 percent or 526.71 points afterwards to 20,119.93 points and the rupee fell to 62.41 against the dollar from its previous close of 61.77.
"Bringing down inflation to more tolerable levels warrants raising the repo rate by 25 basis points immediately," Rajan said in a statement.
Rajan had been widely forecast by economists to keep rates on hold despite annual inflation hitting an unexpected six-month high of 6.1 percent this week.
While businesses and the government would like a rate cut to help revive sluggish growth, this would risk pushing inflation higher and further weakening the rupee, which hit record lows in the weeks before Rajan took charge on September 4.
Rajan did however relax some exceptional liquidity tightening measures that had been introduced by the RBI in July to try and help stem the rupee's freefall.
The "daily CRR", the amount banks must deposit with the central bank, was reduced from 99 to 95 percent, while the marginal standing facility -- used to lend to commercial banks when there is a shortage of funds in the market -- was cut by 75 basis points.
"Now things are back to normal, he is using the policy rate to target inflation and that will allow the rupee to do what it likes," Daniel Martin, Asia Economist at Capital Economics, told AFP.
Nicknamed "The Guv", Rajan stepped up to the post faced with the unenviable task of propping up a weak rupee, reviving slowing economic growth and curbing rising inflation.
"Wholesale Price Index inflation will be higher than initially projected over the rest of the year," he said in Friday's statement.
"What is equally worrisome is that inflation at the retail level... has been high for a number of years, entrenching inflation expectations at elevated levels and eroding consumer and business confidence."
Huge expectations have been riding on the former International Monetary Fund chief economist who famously predicted the 2008 global financial crisis years in advance.
He has been lionised by India's media, and one top columnist has dubbed him the "Poster Boy of Banking" whose "chiselled features are as sharp as his brain".
But on his first day in office, Rajan said he may have to take unpopular steps to tackle what some economists have called India's worst economic crisis in decades.
He almost immediately announced a string of measures to liberalise financial markets and support the currency. His efforts to swell foreign exchange coffers have helped the rupee bounce back, reaching around 62 against the dollar, from 67 when he took charge.
Easing global concerns over the US Federal Reserve's stimulus plan, attacks on Syria and rising oil prices have also aided the rupee's recovery.
The Indian economy has gone dramatically downhill since the "Indian Summer" of the last decade, when annual growth rates regularly topped eight and nine percent.
It grew by five percent last year, its slowest pace in a decade, and some private economists forecast expansion this year at under four percent.
Meanwhile, the Congress-led government has become mired in graft scandals and policy paralysis that have sunk its popularity and sent foreign investors fleeing.
India's public finances are also in trouble with the current account deficit -- the broadest measure of trade -- hitting a record high last year.
<div class="nc_footer">
Copyright (2013) AFP. All rights reserved.
</div>

India's New Central Banker Made A Shock Rate Hike, And The Stock Market Tanked

<keyword id="6358777" type="General" weightage="20" keywordseo="new-delhi" source="Orion">New Delhi</keyword>, March 14 (IANS) <keyword id="53343" type="General" weightage="20" keywordseo="ruchi-soya" source="Orion">Ruchi Soya</keyword> shares hit the 20 per cent upper circuit on Monday after the diversified FMCG company announced it will launch its follow-on public offer (<keyword id="46435" type="General" weightage="20" keywordseo="fpo" source="Orion">FPO</keyword>) worth Rs 4,300 crore on March 24. A follow-on offering is an issuance of additional shares made by a company after an initial public offering. The FPO issue will close on March 28. In order to comply with market regulator SEBI's requirement of a minimum public shareholding of 25 per cent in a listed business, the company is issuing the additional public offering. Entire proceeds from the issue will be used for furthering the company's business by repayment of certain outstanding loans, meeting its incremental working capital requirements and other general corporate purposes. Ruchi Soya's ‘Ruchi Gold' brand is the market leader in branded palm oil and the company is also the pioneer of soya foods in <keyword id="3658" type="General" weightage="20" keywordseo="india" source="Orion">India</keyword> under the brand name ‘Nutrela'. At 1.25 p.m., the shares of the firm were locked in the upper circuit at Rs 963.75. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/you-may-have-to-shell-out-more-for-your-morning-coffee-and-noodles/articleshow/90200235.cms">You may have to shell out more for your morning coffee and noodles</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/bharatpe-will-now-offer-gold-loans-for-merchant-partners/articleshow/90199544.cms">BharatPe will now offer gold loans for merchant partners</a>

Ruchi Soya shares hit 20% upper circuit prior to the launch of its ₹4,300 crore FPO

<ul><li>Amazon and Walmart lost over $50 billion in market value on Friday</li><li>The new rules in India may hurt Amazon and Walmart's international revenue even more</li><li>Amazon's international sales growth halved in the quarter-ended December</li></ul> India's new rules for online retail kicked in on Friday and that led to a massive <a href="https://economictimes.indiatimes.com/industry/services/retail/amazon-walmart-lose-over-50-billion-in-market-value-after-e-tail-policy-change/articleshow/67805566.cms" data-type="tilCustomLink" target="_blank">sell-off</a> in two blue-chip stocks halfway around the world, in US. Nasdaq-listed Amazon’s shares fell by 5.38% and Walmart’s stock lost 2.06% on the New York Stock Exchange (NYSE). Together, the damage was worth over $50 billion in the market value two stocks. The fact that Amazon's growth is broadly slowing - though still growing - speaks to how incremental e-commerce growth is becoming "somewhat more difficult and expensive," Morgan Stanley analysts <a href="https://www.businessinsider.in/Amazon-is-about-to-look-cheap-Analysts-are-doubling-down-on-their-bullish-calls-even-as-the-companys-growth-slows/articleshow/67798248.cms" data-type="tilCustomLink" target="_blank">said</a>. In other words, the margin of profit on every penny of additional revenue may be smaller than it is now. One of the fears on Wall Street is that both companies Amazon and Walmart, which bought the Indian e-tail major Flipkart in 2018, will lose business in one of the world's largest consumer markets, India. The Narendra Modi government changed the rules in <a href="https://in.reuters.com/article/india-ecommerce/india-tightens-e-commerce-rules-likely-to-hit-amazon-flipkart-idINKCN1OQ09D" data-type="tilCustomLink" target="_blank">December 2018 </a>for foreign players in India's online marketplace, curbing them from offering consumers ‘deep discounts’ or sell their own brands through their respective platforms. The fall in Amazon's share price was worse than that of Walmart because the latest earnings report showed that world's largest e-tailer is <a href="https://economictimes.indiatimes.com/industry/services/retail/amazon-walmart-lose-over-50-billion-in-market-value-after-e-tail-policy-change/articleshow/67805566.cms" data-type="tilCustomLink" target="_blank">already</a> witnessing a sharp slowdown in its international sales. In the three months ending December 2018, the growth in Amazon's revenue from markets outside the US nearly halved to 15% compared to the same time last year. The new rules in India could further eat into Amazon's profit. India changed its policy after complaints from India's small traders who fear that the American giants could squeeze out the small corner shops and dominate Indian retail. India's home-grown retailers accused Amazon and Walmart of unfair bias towards affiliate vendors and predatory pricing. However, as Business Insider <a href="https://www.businessinsider.in/amazon-walmart-owned-flipkart-set-back-by-new-e-commerce-rules-that-help-mukesh-ambanis-reliance-retail/articleshow/67751026.cms" data-type="tilCustomLink" target="_blank">explained</a> recently, the biggest beneficiary of the new policy may not be a broke Snapdeal or the now-jaded Shopclues. It is likely to be India’s <a href="https://www.businessinsider.in/e-commerce-wars-amazons-jeff-bezos-vs-mukesh-ambani-in-india/articleshow/67620116.cms">largest retail chain operator</a> Reliance Retail, owned by Mukesh Ambani — the richest man, not only in India, but in Asia. It is to be seen how Donald Tump's White House reacts to the change in policy in India that hurts two America's marquee companies. In a world where are shopping less almost everyday, a market like India with a population of over a billion is an attractive spot. The India Brand Equity Foundation (IB estimates that online retail alone will be a $73 billion market in less than three years, more than double the estimated size in 2018. 
 
 
 
 
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 However, allowing foreign retailers an unchecked ride has been a political hot potato in India because still 90% of India's retail market is small, unorganised traders. Still, online retail has grown into a massive opportunity with improving internet access in the world's fastest growing economy, India. As of now, only 3% of the county's retail market is online. 
 
 
 
 
 <div type="image" title="Donut chart." msid="67808798" hostid="261"></div>









 Amazon has <a href="https://www.businessinsider.in/amazon-takes-the-fight-to-walmart-by-investing-another-27-billion-in-india/articleshow/65404423.cms">invested over $4.7 billion</a> in India over the last six years, primarily because it identified the potential of the Indian market. For the same reason, <a href="https://www.businessinsider.in/indian-unicorn-flipkarts-board-approves-15-billion-deal-with-walmart/articleshow/64027810.cms">Walmart bought Flipkart</a> in 2018 for a whopping sum of $15 billion, paying a heavy premium for joining the game late. Now, Asia's richest man Mukesh Ambani is also joining the race and he has a level playing field, thanks to the new government rules, to compete with the two American behemoths with equally deep pocket, if not more. Will this lead to a diplomatic standoff between the Indian and the American government? Tussle over trade barriers are anyway the flavour of the season. SEE ALSO: <h1 style="margin-top: 0px; margin-bottom: 10px; padding-bottom: 20px; border-bottom: 1px solid rgb(238, 238, 238); font-variant-numeric: normal; font-variant-east-asian: normal; font-stretch: normal; font-size: 28px; line-height: 1.2em; font-family: LabGrotesque-Black, Helvetica, Arial, sans-serif; vertical-align: baseline; color: rgb(17, 21, 22); background-color: rgb(255, 255, 255);"><a href="https://www.businessinsider.in/amazon-walmart-owned-flipkart-set-back-by-new-e-commerce-rules-that-help-mukesh-ambanis-reliance-retail/articleshow/67751026.cms" data-type="tilCustomLink" target="_blank">Mukesh Ambani may be the surprise winner from India's new rules hurting Amazon and Walmart</a> </h1>

The sale on Amazon and Walmart stocks in US may worsen as new India's e-commerce rules kick in

<keyword id="163934" type="ORGANIZATION" weightage="20" keywordseo="National-Stock-Exchange-of-India">National Stock Exchange of India</keyword> Limited (<keyword id="6354646" type="UNKNOWN" weightage="20" keywordseo="nse">NSE</keyword>) on Thursday said the number of new investor registrations crossed 50 lakh in less than <keyword id="6402111" type="UNKNOWN" weightage="20" keywordseo="Four-months">four months</keyword> of <keyword id="10103883" type="UNKNOWN" weightage="20" keywordseo="financial-year-2021-22">financial year 2021-22</keyword>. New investor registrations witnessed a 2.5 times growth in four months of FY22, compared to the corresponding period of the previous fiscal. "From the geographical presence point of view, 36 per cent new investors registered are from north Indian states, While west Indian states accounts for 30 per cent, southern Indian states accounts for 22 per cent and the remaining 12 per cent are from the east Indian states," the NSE said in a note. "Another interesting trend is that, 53 per cent of new investors registered are from states beyond top 5 ranked states." The NSE's overall registered investor base has now crossed 4.5 crore. SEE ALSO <a href="https://www.businessinsider.in/stock-market/news/windlas-biotech-to-raise-395-402-crore-through-public-listing-price-band-fixed-at-448-460/articleshow/84854594.cms">Windlas Biotech to raise ₹395-402 crore through public listing, price band fixed at ₹448-460</a> <a href="https://www.businessinsider.in/tech/mobile/news/googles-sundar-pichai-has-teased-the-whitechapel-chipset/articleshow/84853916.cms">Google teases Whitechapel chipset that may power Google Pixel 6 devices</a>

New investor registrations on NSE grew 2.5 times to cross 50 lakh mark

<ul><li><keyword id="151330" type="COMPANY" weightage="20" keywordseo="Bank-Nifty">Bank Nifty</keyword>, the index of India's top banking stocks, is down 7% for the week hours before the trading on Friday concluded.</li><li>IndusInd Bank topped the list of weekly losers with a cut of nearly 20%.</li><li>Fitch estimates that a total of ₹5.5 trillion, about 5.7% of India's total outstanding loans, may witness defaults due to the economic stress dealt by the COVID-19 pandemic. </li><li>The Reserve Bank of India brought the interest rates down for the fifth time in a year to 4% now, the lowest since 2000.</li></ul>Bank Nifty, the index of India's top banking stocks, is down 7% for the week hours before the trading on Friday concluded. IndusInd Bank topped the list of weekly losers with a cut of nearly 20%. Shareholders of Indian banks are dumping their stock fearing a fresh surge in loan defaults as ₹2 in every ₹5 is lent to sectors like <a href="https://www.businessinsider.in/business/news/from-spicejet-to-oyo-to-mahindra-all-want-msme-tag-for-partners/articleshow/75821961.cms" data-type="tilCustomLink" target="_blank">tourism, hotels, and restaurants</a>, which are part of the medium-to-high-risk segments in the post-COVID world. The sell-off in banking stocks escalated on Friday (May 22) despite <a href="https://www.businessinsider.in/personal-finance/news/interest-payments-on-home-loans-car-loans-and-others-extended-by-another-three-months-by-rbi/articleshow/75884387.cms" data-type="tilCustomLink" target="_blank">the fifth cut in benchmark interest rates</a> in a year by the Reserve Bank of India. The <keyword id="43352" type="PERSON" weightage="20" keywordseo="Repo-rate">repo rate</keyword>, the interest that the central bank charges for lending money to banks, is now at 4%, the lowest since 2000. <div type="image" title="interest rates" msid="75884429" hostid="261" caption="&amp;lt;p&amp;gt;The benchmark interest rates in India have never been as low as 4% since the turn of the century.&amp;lt;/p&amp;gt;"></div> Not just that, the government also announced <a href="https://www.businessinsider.in/finance/news/india-puts-a-pause-on-new-bankruptcy-cases-for-a-year-and-other-changes-that-will-cap-the-rise-in-bad-loans/articleshow/75785508.cms" data-type="tilCustomLink" target="_blank">a pause on classifying loan defaults as bad loans</a>, and initiating new insolvency cases, for the next one year due to the debilitating impact of COVID-19 pandemic on the economy. However, none of these measures were good enough for the markets. <div type="Article" hostid="261" msid="75883216" title="DMart's quarterly sales may fall 25% but the shares are already up 35% ⁠— the retailer is now bigger than Maruti, Nestle and HCL Tech" mstype="2" mssubtype="0"></div> These are the top losers on the Bank Nifty this week: <table style="width: 188pt;"> </colgroup> <tbody><tr> <td class="xl63" style="height:15.0pt;width:95pt">Stock </td> <td class="xl63" style="border-left-width: initial; border-left-style: none; width: 93pt;">This week</td> </tr> <tr> <td class="xl63" style="height: 15pt; border-top-width: initial; border-top-style: none;">IndusInd Bank</td> <td class="xl64" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">-19.19%</td> </tr> <tr> <td class="xl63" style="height: 15pt; border-top-width: initial; border-top-style: none;">Federal Bank</td> <td class="xl64" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">-14.63%</td> </tr> <tr> <td class="xl63" style="height: 15pt; border-top-width: initial; border-top-style: none;">Axis Bank</td> <td class="xl64" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">-13.28%</td> </tr> <tr> <td class="xl63" style="height: 15pt; border-top-width: initial; border-top-style: none;">RBL Bank</td> <td class="xl64" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">-11.29%</td> </tr> <tr> <td class="xl63" style="height: 15pt; border-top-width: initial; border-top-style: none;">Bank of Baroda</td><td class="xl64" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">-9.98%</td></tr></tbody></table> The stocks look cheap as the Bank Nifty has already lost over 46% this year so far, but as ICICI Securities put it in a report dated May 13, "valuations are tempting but the risks outweigh rewards." Indian banks had barely cleaned up the massive pile of unpaid loans from the country’s corporates. The total non-performing assets (NPA) in India was estimated at over ₹9 lakh crore at the end of September 2019. The coronavirus pandemic is spiralling into an economic crisis that may bring a fresh wave of defauts ⁠— this time from the small borrowers. Fitch estimates that <a href="https://www.indiainfoline.com/article/news-top-story/banking-sector-beginning-new-npa-cycle-in-aftermath-of-covid-19-ind-ra-120052200246_1.html" data-type="tilCustomLink" target="_blank">a total of ₹5.5 trillion, about 5.7% of India's total outstanding loans,</a> may witness defaults due to the economic stress dealt by the COVID-19 pandemic. The report also added that every government-owned bank in India will need an additional capital of ₹30,000 crore to ₹55,000 crore. In an exclusive chat with <a href="https://twitter.com/BiIndia/status/1248562052337033216">Business Insider on April 10</a>, Vijay Shekhar Sharma, the billionaire founder of Alibaba-backed Paytm, said this will be the ‘biggest nightmare’ for India in 2020. With the <keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword> extending the <keyword id="117489" type="PERSON" weightage="20" keywordseo="moratorium">moratorium</keyword> on loan repayments till August 31, it is likely that more borrowers may take the option. <div type="image" title="moratorium" msid="75885416" hostid="261" caption="&amp;lt;p&amp;gt;If more borrowers opt to defer loan repayments, it will hurt banks&amp;#39; earnings in the short term. They may earn interest on the prolonging of the loan tenure.&amp;lt;/p&amp;gt;"></div> Moreover, the chiefs of major lenders like Axis Bank and <a href="https://www.businessinsider.in/business/news/kotak-mahindra-bank-q4-profit-down-4-pc-to-rs-1952-cr/articleshow/75712873.cms" data-type="tilCustomLink" target="_blank">Kotak Mahindra Bank</a> have already said that they will be more cautious while making loans hereon, and that will have an impact on future earnings of the banks too. Even the corporate lobby says that the interest rate cuts are good, but not good enough. "...a new phenomenon is visible," ASSOCHAM Secretary General Mr Deepak Sood said. "Along with the risk aversion by the banks to lend, even the borrowers are apprehensive about increasing debts on their balance sheets in the face of a grave economic situation... Under such circumstances, restructuring of debts on a wider scale and a willingness to share the grave consequences of the global pandemic are essential." All in all, the business environment for banks seems to fraught with risks and investors don't have the appetite for it. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/personal-finance/news/interest-payments-on-home-loans-car-loans-and-others-extended-by-another-three-months-by-rbi/articleshow/75884387.cms?upache=2">No EMI payments for six months as RBI extends moratorium on loans repayments till August 31</a> <a href="https://www.businessinsider.in/finance/news/yes-bank-share-price-net-loss-and-drop-in-deposits-post-q4-earnings/articleshow/75590798.cms" data-type="tilCustomLink" target="_blank">Yes Bank fears more deposits may disappear when COVID-19 moratorium ends and people start repaying loans</a> <a href="https://www.businessinsider.in/business/corporates/news/axis-bank-q4-earnings-show-bad-loans-ease-but-ceo-amitabh-chaudhry-maintains-caution/articleshow/75429938.cms" data-type="tilCustomLink" target="_blank">Axis Bank CEO says lending will be 'cautious' despite easing stress from bad loans in the latest fourth quarter</a>

India's banking stocks are down 7% this week despite a rate cut by RBI and a pause on new bad loans and bankruptcies

<ul><li><keyword id="4761491" type="PERSON" weightage="20" keywordseo="TCS-Share-Price">TCS share price</keyword> dipped to ₹1506.05 when markets opened today morning.</li><li>The overall market crash was so massive that it triggered the circuit breaker limit halting trade for 45 minutes.</li><li>This is the first time in seven years that TCS stock has dipped below ₹1600. The last time was in July 2013. </li><li>Over the last three months, TCS' value has dipped by ₹2 lakh crore ($27 billion). </li></ul>The stock of Tata Consultancy Services (TCS) hit a seven-year low as markets opened to a massive crash today morning. The company's share price dipped to ₹1506 as a massive global selloff affected Indian stock markets too. TCS' value has gone down from ₹8.3 lakh crore in December to ₹6.3 lakh crore in the last three months — a dip of 24.3% resulting in market cap loss of ₹2 lakh crore ($27 billion). 
 
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 The last time the company's share price went below ₹1600 was in July 2013. IT stocks in India were already bearish amid a global economic slowdown. Things took a turn for the worse as India locked down borders and suspended most active visas. TCS wasn't the only stock to crash in earning trading hours. In what is being called the Coronacrash, Asian markets — including Indonesia, South Korea, Thailand and the Philippines — halted trading as stocks plummeted the minute markets opened. In India, the <a href="https://www.businessinsider.in/india/news/trading-halted-for-45-mins-as-sensex-hits-lower-circuit-for-the-first-time-in-12-years/articleshow/74605048.cms">circuit breaker limit</a> was used for the first time in 12 years. It was triggered after Nifty50 crashed 10%. Trading was suspended for 45 minutes before markets reopened. However, TCS continues to be volatile. Amidst this melee, TCS temporarily recouped its position as India's most valued company back from <a href="https://www.businessinsider.in/business/news/heres-how-mukesh-ambani-lost-5-8-billion-in-a-day/articleshow/74572111.cms">Reliance Industries</a> which faced the double whammy of coronavirus and crude oil price crash yesterday. However, it was back to being in second place after markets closed yesterday, March 13. Even ₹4,500 crore couldn't fight the effects of the coronavirus The massive dip in TCS value comes after the company met on March 11 and declared an interim dividend of ₹12 per share — a total payout of ₹4,503 crore. In fact, the announcement of dividends did nothing to slow the stock's downward trajectory this week. 
 
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 It's not just stocks in India but markets all over the world that continue to remain volatile amid the coronavirus outbreak. The New York Stock Exchange (<a href="https://www.businessinsider.in/stock-market/news/the-new-york-stock-exchange-is-preparing-to-close-its-trading-floor-as-coronavirus-sweeps-through-new-york/articleshow/74599617.cms">NYSE</a>) may close its trading floor in the coming week to keep the Covid-19 virus from spreading. The chaos in overseas markets has an undeniable effect on IT stocks. Any further upheaval in US markets, like closing down the trading floor, could have a negative impact on IT stocks like TCS in India. The prolonged pandemic will have an effect on new client acquisitions and Kotak Securities corrected the revenue of IT companies by 2-4%. “In addition to and partly as a consequence of Covid-19, client health has started deteriorating across many verticals. Specifically, sharp rate cuts impact the banking vertical. We expected moderate improvement in spends among US banking clients at the beginning of the year. However, subsequent turn of events has all but eliminated this possibility,” the report said. TCS is only one of 783 stocks on the National Stock Exchange (NSE) to have hit its 52-week low this week. Yesterday, NSE and BSE saw the largest single-day fall of over 2,919 points since the 2008 financial crisis. See also: <a href="https://www.businessinsider.in/science/health/news/coronavirus-recovery-rate-at-54-as-doctors-race-to-find-a-cure/articleshow/74589618.cms">Coronavirus recovery rate at 54% as doctors race to find a cure</a> <a href="https://www.businessinsider.in/india/news/coronavirus-travel-restrictions-affect-everything-from-the-ipl-to-nris-on-vacation/articleshow/74591642.cms">Coronavirus travel restrictions affect everything from the IPL to NRIs on vacation</a> <a href="https://www.businessinsider.in/india/news/coronavirus-rattles-the-supply-chain-in-indias-largest-electronics-market-hitting-mobile-accessories-more-than-new-phones/articleshow/74484914.cms">Coronavirus rattles the supply chain in India’s largest electronics market, hitting mobile accessories more than new phones</a>

'Corona crash' wipes over ₹2 lakh crore from TCS share value in just 3 months

<ul class="summary-list"><li>India's stock market is poised to more than double in value to $10 trillion by 2030, Jefferies says.</li><li>Jefferies analysts also predicted the Indian economy would surpass Japan's and Germany's by 2027.</li></ul>India's stock market is poised to skyrocket, more than doubling in value to $10 trillion by 2030, thanks to the country's surging economy and persistent reforms, analysts at Jefferies wrote in a note published Thursday.With a value of $4.3 trillion, India's equity market is the world's fifth-largest, and Indian stocks have managed to consistently yield 10% annual returns over a 20-year period.Even after that run of stunning equity returns, the Jefferies analysts said investors in the country's stock market could still expect returns of 8% to 10% in the next five to seven years."Assuming market returns in line with the last 15-20 year history and new listings, India will become nearly a U$10trn market by 2030 - impossible for large global investors to ignore," the analysts wrote.India <a href="https://www.businessinsider.com/india-china-economy-emerging-stock-markets-xi-jinping-narendra-modi-2024-2">has emerged as a hot spot</a> for global capital inflows in recent years, especially as its longtime rival China struggles to keep investors from fleeing economic turmoil in the country.China's flailing economy, its <a href="https://markets.businessinsider.com/news/stocks/china-stock-market-crash-rescue-plan-ban-selling-support-measures-2024-2?_gl=1*nyfnkq*_ga*MTIzMDA5Njk4OS4xNzA3ODc2NDgz*_ga_E21CV80ZCZ*MTcwODYyMTgxMC4yNi4xLjE3MDg2MjIzMjQuNTMuMC4w">cratering stock market</a>, and a never-ending property crisis have driven foreign investors to shift their focus to India, helping push the country's stock market 31% higher last year.Meanwhile, India's financial-system reforms, favorable geopolitical dynamics, a growing entrepreneurial landscape, and the country's emphasis on services exports are all boosting its prospects for strong growth and stock-market returns. India's gross domestic product has seen a 7% compound annual growth rate in the past decade."Over the next 4 years, India's GDP will likely touch US$5trn making it the 3rd largest economy by 2027, overtaking Japan and Germany, being the fastest growing large economy with the tailwinds of demographics (consistent labor supply), improving institutional strength and improvement in Governance," the note said.Correction: February 23, 2024 — An earlier version of this story misstated the year by which Jefferies analysts expect the Indian stock market to reach $10 trillion in value. It's 2030, not 2023.

India's stock market will soar to $10 trillion by 2030 and the country's growth is impossible for investors to ignore, Jefferies says

<ul class="summary-list"><li><keyword id="657946" type="PERSON" weightage="60" keywordseo="Millennials">Millennials</keyword> in <keyword id="3658" type="COUNTRY" weightage="60" keywordseo="India">India</keyword> are driving the country's <keyword id="6357440" type="DEFINITION" weightage="60" keywordseo="Stock-Market">stock market</keyword>, <a href="https://www.bloomberg.com/news/articles/2021-03-23/millions-of-millennials-are-piling-into-india-s-stock-market">Bloomberg reported</a>.</li><li>They are likelier to take risks than their elders, departing from the asset investments typical in India.</li><li>Worldwide, young investors are shifting investing trends - and economies along with them.</li></ul>Millennials in India might be changing the country's stock market. Driven by quarantine boredom, many 20- and 30-something Indians have turned to stock trading during the pandemic, <a href="https://www.bloomberg.com/news/articles/2021-03-23/millions-of-millennials-are-piling-into-india-s-stock-market">reported Bloomberg</a>. The stock market rally and rise of trading apps and social media has lured these young investors, Bloomberg wrote, many of whom are <keyword id="176171" type="PERSON" weightage="60" keywordseo="day-trading">day trading</keyword> for the first time.The influx of young investors is a similar story around the world, but an especially positive sign for India's economic development, as active investor accounts increased to a record 10.4 million in 2020. Only 3.7% of the country's 1.36 billion people invest in equities, per Bloomberg, compared to 12.7% in China and 55% in the US."India could easily equal China's market cap in the next five to 10 years because going forward, growth in India's market will probably be faster," emerging-market investor Mark Mobius told Bloomberg. "China, because of its size, will probably grow more slowly."It also signals that internet adoption is extending to areas of the country beyond the big cities of Mumbai and New Delhi. Securities firm Angel Broking told Bloomberg that more than 50% of its new customers in its fourth quarter were from "smaller cities and towns."Indian millennials are more likely to take market risks, a departure from other investors' traditional investments in bank deposits and physical assets like real estate and gold, the latter of which served as an "insurance policy and a retirement plan in a country that lacks robust social welfare systems or widespread access to formal credit," Bloomberg wrote.This appetite for risk-taking is common in other <keyword id="31671" type="CITY" weightage="60" keywordseo="markets">markets</keyword>' experience of millennial investing, though, pointing to a more volatile <keyword id="34412" type="ORGANIZATION" weightage="100" keywordseo="economy">economy</keyword> as younger participants join the stock market.<h2>Millennials are driving big investing trends</h2>Worldwide, the bored and young fueled a <a href="https://www.businessinsider.com/millennials-gen-z-pandemic-investments-spending-toys-vintage-clothes-animals-2020-12">big shift in investing</a> in 2020.<keyword id="6354947" type="UNKNOWN" weightage="60" keywordseo="bitcoin">Bitcoin</keyword> was buzzing, <a href="https://www.businessinsider.com/bitcoin-an-all-time-high-still-uncertain-investment-millennials-2020-12">surpassing its previous peak</a> from December 2017, a year when it had <a href="https://www.businessinsider.com/bitcoin-price-in-2017-review-2017-12">a "wild run</a>," rising by more than 1,300% and <a href="https://www.businessinsider.com/cryptocurrency-bitcoin-ethereum-ico-mania-going-mainstream-2017-8?curator=TechREDEF">going mainstream</a> before tumbling the next year as it and other <a href="https://www.businessinsider.com/bitcoin-price-cryptocurrencies-ether-litecoin-bitcoin-cash-2018-9">cryptocurrencies slumped</a>. But <a href="https://markets.businessinsider.com/currencies/news/bitcoin-surges-past-15000-hits-highest-level-in-two-years-2020-11-1029772298">substantial millennial interest</a> brought the hype alive again. <a href="https://markets.businessinsider.com/currencies/news/world-biggest-crypto-fund-manager-michael-sonnenshein-bitcoin-money-evolution-2020-11-1029826836">The conditions of the pandemic</a> and resulting search for <a href="https://www.coindesk.com/dbs-bitcoin-crypto-pandemic">an investing hedge</a> against potential inflation, more widespread availability on <a href="https://newsroom.paypal-corp.com/2020-10-21-PayPal-Launches-New-Service-Enabling-Users-to-Buy-Hold-and-Sell-Cryptocurrency">PayPal</a> and<a href="https://cash.app/help/us/en-us/1016-bitcoin"> Square</a>, and new Wall Street regulators, could be contributing to its rally.Stock-trading startup <keyword id="1268253" type="PERSON" weightage="60" keywordseo="Robinhood">Robinhood</keyword> also saw explosive growth during the pandemic thanks to a new generation of novice traders flocking to the stock, options, and cryptocurrency platform, <a href="https://www.businessinsider.com/robinhood-ipo-soliciting-advisers-2021-bloomberg-report-2020-11">Insider's Graham Rapier reported</a>. The free-trading investing app, whose <a href="https://www.npr.org/2020/08/11/895054084/millions-turn-to-stock-trading-during-pandemic-but-some-see-trouble-for-the-youn">average user</a> is 33 years old, <a href="https://www.businessinsider.com/what-founders-can-learn-from-robinhoods-success-trap-profits-mission-2020-7">added 3 million users</a> to its current total of 13 million this year alone. The company even raised <a href="https://www.nytimes.com/live/2020/08/17/business/stock-market-today-coronavirus">$200 million in funding</a> in December.But the boom hasn't been entirely positive: It's <a href="https://www.businessinsider.com/robinhood-hackers-accessed-2000-trading-accounts-bloomberg-2020-10">triggered outages and angry customers</a>, and amateur traders have <a href="https://www.businessinsider.com/what-founders-can-learn-from-robinhoods-success-trap-profits-mission-2020-7">lost thousands of dollars</a> through high-volume day trades.More recently, a group of day-trading Redditors from The WallStreetBets forum used the platform to incite <a href="https://www.businessinsider.com/whats-a-day-trader-retail-gamestop-reddit-change-wall-street-2021-1">frenzied trading in the shares of GameStop</a> in response to hedge funds "shorting" the stock. Their trades sent <keyword id="363661" type="COMPANY" weightage="60" keywordseo="GameStop">GameStop</keyword> soaring, causing <a href="https://markets.businessinsider.com/news/stocks/short-sellers-sitting-on-19-billion-of-losses-on-gamestop-data-shows-2021-1-1030020684">an estimated $19 billion</a> of losses for short sellers in the company as of January 29.As the young come into both money and access to day trading, their investment trends are ultimately shaping economies across the globe, from the US to India.

Indian millennials are taking to the stock market, as the bored and young start driving markets worldwide

<ul><li>Indian regulations are far more stringent, well designed, and keep investors’ interest as a priority compared to the US’s capital market regulations.</li><li>On Indian exchanges, you can short stocks for intraday without borrowing from SLB platform. But such positions can’t be held overnight</li><li>Unlike in India, where SLB is relatively new and not active, it is a huge market in the US. Many large short-only hedge funds identify and short companies that aren’t doing well without using F&amp;O, simply shorting the stocks directly.</li></ul>I guess you have read the headlines from the US on how retail traders are causing a “short squeeze” in stocks like <keyword id="363661" type="COMPANY" weightage="20" keywordseo="GameStop">GameStop</keyword>, AMC entertainment, etc. If you haven’t, check this article by <a href="https://finshots.in/archive/gamestop-reddit-retail-investors/">Finshots</a> that explains this well. We have been getting a lot of questions around shorting, and if a short squeeze of this scale can happen in stocks listed on Indian exchanges. It cannot, and below, I explain why. Quick intro to Stock lending &amp; borrowing (SLB) Many people who invest in the markets think that the only way to profit is buying stocks that have the potential to grow with an expectation that if the companies do well, the prices will also go up. This buying of stocks is also called going “long stocks”. While most of us invest or go long stocks, there is a small community of active traders who do the opposite. They identify stocks that are not doing well and bet that the stock prices will go down. The trade is to first sell a stock at the current price (yes, sell a stock without owning it) and then buy it back at a lower price, when it falls, and pocket the difference. You sell a stock that you don’t own by borrowing the stock from someone and then selling it in the market. When the price goes down, you buy it back and then return the stock to the lender and profit. Of course, you can lose money if the stock price goes up instead of down as you would have to buy it back at a higher price. Someone will lend you the stock because the borrower will pay a fee for that and in the process, the lender earns an additional income from their stock holding. Of course, a lender will lend the stocks only if their intention is to hold it for the long term and not sell it within the period for which the stock is lent. This mechanism of lending and borrowing stocks is called Stock Lending and Borrowing or SLB. It was introduced in India in 2008 and activity on the SLB platform only started picking up in 2018 when the regulator permitted rollover of stocks lent upto 12 months (minimum 1+11 months). Shorting on Indian exchanges On Indian exchanges, you can short stocks for intraday without borrowing from SLB platform. But such positions can’t be held overnight as you would be required to deliver the stocks for short positions held into the next trading day. While there are many short trades in stocks taken on an intraday basis, almost all overnight short positions are done using futures and options and not SLB, where traders bet on indices or stocks going down. Here are a few reasons: F&amp;O was introduced in 2001, so it had almost a 12-year head start to SLB, which started seeing the first bit of activity in 2013. Leverage (the ability to trade for more than the capital in hand) is inherently available with F&amp;O as a product. Also, with options, you have the flexibility to set up various trading strategies, and not just naked shorting like with SLB. Until recently, all F&amp;O contracts were cash-settled, which meant that they were simpler to trade than SLB where securities have to move between various accounts. In the exchange business, liquidity chases liquidity. F&amp;O contracts have a lot more liquidity than SLB, so by default, traders prefer to trade where the liquidity is higher as the impact costs tend to be much lower. But that said, there are a few benefits of trading on the SLB platform as well. In F&amp;O you can trade only in multiples of minimum lot size, but in SLB you could borrow and sell as low as a single share of a company. There are around 140 stocks that trade on F&amp;O, but the SLB platform has almost 350 stocks. So if you had to short stocks which are not on F&amp;O, the only option is SLB. F&amp;O contracts have a maximum validity of 3 months. You would have to bear a rollover cost (exit existing and enter the next 3-month contract). In stock F&amp;O contracts, the 3rd-month contract usually never has any trading volume, so you would need to roll over a contract almost every 2 months, which would be very expensive for long term short positions. In SLB, if you find a borrower who is willing to lend, you can borrow and sell stocks and hold a short position for upto 12 months without worrying about rollover costs. Lenders can earn an additional income on their long term portfolio and is an added incentive to participate. Because of these reasons, one might assume that there should be enough interest in the SLB platform to see activity. But there have been a few deterrents. Firstly, the lender’s income is qualified as “income from other sources”, so people lending will have to file using ITR3 and may need audits. Whenever there is a corporate action like rights and bonus issues, there is a forced closeout of the position. Finally, the product is complex in terms of back-end operations compared to F&amp;O, and brokerage firms still don’t have systems to scale this. At <keyword id="759851" type="COMPANY" weightage="20" keywordseo="Zerodha">Zerodha</keyword>, we are working on offering the SLB platform to all our customers in the next few months. Shorting on US stock exchanges Unlike in India, where SLB is relatively new and not active, it is a huge market in the US. Many large short-only hedge funds identify and short companies that aren’t doing well without using F&amp;O, simply shorting the stocks directly. I had written this post a couple of years back, comparing Indian brokerage industry to the US. Here is an excerpt from that post that talks about differences in how security lending works in the US compared to India. How there is an incentive for brokers to lend securities, which has helped grow that market. Securities Lending The structure of our depository system, like our payments system, is a newer and advanced system as compared to the US. This is mainly because India didn’t have a legacy when we went online in the 1990s. We have depositories like NSDL and CDSL where we hold demat accounts that remain unaffected even if a brokerage firm goes into trouble. In the US all securities are essentially held in book or street name with the respective brokers, what they call a “books and records system”. This means the securities are all held by brokers. This also allows the brokerage firm in the US to lend these securities to people looking to short stocks or borrow for various trading strategies and earn an additional source of income (Unlike India, borrowing stocks to short is extremely popular in the US). The earning potential for these stocks held by the broker is typically based on the number of people wanting to short the stock. For example, early this year, when Marijuana stocks were moving wildly, there were periods of time where one could earn as much as 100% or more annualized returns just by lending these stocks. Regulations in the US mandate the brokerages to share some of the lending fees with the person who owns the stock, but the entire thing is quite opaque to the customer. Most never get to know how much was earned. In India, brokers can’t lend securities as they sit in the clients’ demat accounts with the depositories. Also, with the new set of regulations that came out on the 1st of Oct 2019, even securities bought by a customer that are unpaid for, cannot be pledged. Also, India does not have an SLB platform where clients can participate directly, and know the exact lending fees being earned. Shorting stocks – India vs the US Indian regulations are far more stringent, well designed, and keep investors’ interest as a priority compared to the US’s capital market regulations. This is also because of fewer legacy issues compared to the <keyword id="123399" type="ORGANIZATION" weightage="20" keywordseo="US-markets">US markets</keyword>. While some of the exchanges are quite old, all our capital market regulations are quite new and were created after the 1991 capital market reforms. Another reason for lax regulations in the US is the existence of powerful lobbies. A short squeeze or a stock going up forcing shorts to cover their positions by buying back stock which adds even more momentum on the way up can happen to any stock where shorting is allowed. But what we see in some of the stocks like Gamestop, AMC, are glaring loopholes left open by the US regulators. In some of these stocks, the total quantity of stocks shorted (stocks borrowed and sold + using derivatives) is much more than the free float or the total number of shares held publicly. Allowing such large speculative positions is quite ridiculous and a recipe for disaster. While everyone is celebrating retail traders winning over a large hedge fund in this case, it rarely ever plays out this way. Most commonly, retail ends up losing money when there is excessive speculation. In India, we have something called market-wide position limit (MWPL) where the maximum net position allowed in any stock is 20% of free float, both in F&amp;O and in SLB. The maximum allowed per client is 5% of open interest or 1% of total free float. Such position limits ensure that the chances of anomalies that can cause crazy spikes up or down, like what we are currently seeing in some US stocks, reduces significantly. But that said, a lower maximum position limit also comes with its own issues. There have been allegations in India that groups of traders move stocks to ban period (no new positions possible to be added) by buying deep OTM options at very low costs on certain low free float stocks. With no new positions allowed, any spike in the underlying stock price might exacerbate the move by forcing those stuck in a position to cover their shorts, causing a spike in the stock prices. The 5% OI on individual holdings makes this tougher to execute, and there are regulations to punish people who act in concert. Should shorting a stock be allowed at all? This is a philosophical question, and there are both for and against arguments to be made. I am for it because it enables better price discovery of a stock. There have been many occasions where short-sellers have identified potential frauds and ensured that such stock prices don’t go up. Additionally, those who hold short positions usually come to the rescue when there is a free fall in price, and there is no demand to buy a stock. A short position profit-booking by buying back the stock tends to add some support to the fall, reducing volatility. The flipside with shorting is that promoters of listed businesses have to also keep a much closer watch on the stock price. Apart from large short traders, it is possible to have competitors of a company trying to hurt the business by attempting to force the stock price down.

You Searched For "new stocks in india" and got 11 results

India Stocks Hit New High

Agence France Presse

The ₹600 crore IPO of defence components maker MTAR is slated for next week — price band set at ₹574-575 per share

Navdeep Yadav

India's New Central Banker Made A Shock Rate Hike, And The Stock Market Tanked

Salil Panchal, AFP

Ruchi Soya shares hit 20% upper circuit prior to the launch of its ₹4,300 crore FPO

IANS

The sale on Amazon and Walmart stocks in US may worsen as new India's e-commerce rules kick in

Sriram Iyer

New investor registrations on NSE grew 2.5 times to cross 50 lakh mark

IANS

India's banking stocks are down 7% this week despite a rate cut by RBI and a pause on new bad loans and bankruptcies

Sriram Iyer

'Corona crash' wipes over ₹2 lakh crore from TCS share value in just 3 months

Prabhjote Gill

India's stock market will soar to $10 trillion by 2030 and the country's growth is impossible for investors to ignore, Jefferies says

Yuheng Zhan

Indian millennials are taking to the stock market, as the bored and young start driving markets worldwide

Hillary Hoffower

The founder of India’s largest broking firm argues that Gamestop-like chaos would never happen in India

Nithin Kamath

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