At the Global Fintech Fest, Prime Minister Modi highlighted the transformative impact of India’s fintech revolution on the quality of life and its role in democratising financial services. Meanwhile, at the CNBC-TV18 Banking Transformation Summit, RBI Deputy Governor Swaminathan emphasised that while protecting financial stability, the central bank’s measures, including business restrictions, are carefully considered.
In corporate news, quick commerce firm Zepto has reached a valuation of $5 billion following a $340 million funding round. Co-founder Aadit Palicha shared with CNBC-TV18 that the company is eyeing an IPO within the next 12 to 24 months.
Additionally, the Centre has approved Singapore Airlines’ 49% foreign direct investment in Air India, facilitating the merger of Vistara into the Maharajah. Vistara will cease its operations from November 12, and passengers can book flights only up to November 11. In other news, SEBI has tightened eligibility criteria for stocks entering or exiting the F&O segment.
1. India’s GDP grows 6.7% in Q1 of FY25
India’s economic activity slowed in the first quarter of 2024-25, with GDP growth recorded at 6.7%, a decline from 8.2% in the same period last year, according to the National Statistical Office (NSO).
This figure fell short of both a CNBC-TV18 poll prediction of 6.4% and the Reserve Bank of India’s forecast of 7.1%.
The agriculture sector saw a growth drop to 2%, down from 3.7% in the previous year, while the manufacturing sector experienced an increase to 7% compared to 5% last year.
Despite this slowdown, India remains the fastest-growing major economy, with China’s GDP growth at 4.7% for the same quarter. Aditi Nayar, Chief Economist at ICRA, noted that the decline in GDP growth is not alarming, attributing the higher-than-expected growth in Gross Value Added (GVA) to sectors like construction, public administration, defense, and agriculture, which saw significant contributions.
2. Sensex, Nifty gain in 12-day streak; BSE mcap hits record high of ₹464 lakh crore
The Nifty 50 and Sensex extended their winning streak to 12 consecutive days, marking their longest in over three decades, with BSE-listed companies’ market capitalisation reaching a record ₹464 lakh crore ($5.54 trillion).
The Nifty closed at 25,263, while the Sensex reached 82,636. The Nifty Pharma index set a new record, with stocks like Cipla, Divi’s Laboratories, and Lupin seeing significant gains.
Vodafone Idea, Dixon Technologies, and OFSS faced declines due to MSCI adjustments, while Bajaj Finance and Bajaj Finserv rose over 1%. Paytm surged 11% on strong volumes, and Bharti Airtel gained 2% following positive brokerage reports.
The market recorded its largest weekly increase in two months, with 37 of the 50 Nifty stocks gaining. The Midcap index rose 0.6%, underperforming compared to benchmark indices, while the Nifty Bank index increased nearly 1%. Overall, market breadth favoured advances with a 3:2 advance-decline ratio.
3. GFF 2024 | PM Modi calls for urgent action against cyber fraud
Speaking at the Global Fintech Fest in Mumbai, Prime Minister Narendra Modi emphasised the urgent need to combat cyber fraud and promote digital literacy.
He highlighted that since April 2021, cybercriminals have stolen over ₹10,300 crore from India, with daily complaints exceeding 5,000, many linked to organised gangs from China, Cambodia, and Myanmar.
In the first four months of 2024 alone, Indians lost ₹1,750 crore to cyber fraud, predominantly financial crimes.
Modi announced a ₹1 lakh crore fund to support research and development, calling for stronger regulatory actions to protect fintech companies from rapid cyber threats. He stressed that while financial crises develop slowly, cyber fraud can quickly undermine the sector.
Modi also pointed to recent legislative efforts, including data protection laws, as vital for securing digital transactions. He reiterated the necessity for significant measures to stop fraud and enhance digital literacy to safeguard India’s fintech landscape.
4. Protecting stability, not stifling growth: Swaminathan on RBI’s regulatory approach
At the CNBC-TV18 Banking Transformation Summit, RBI Deputy Governor Swaminathan Janakiraman emphasised the importance of vigilance, good governance, and digital transformation for the resilience of India’s financial sector.
While acknowledging the current strength of the banking system, he warned against complacency and highlighted the need for continuous improvement and cautious risk management. Swaminathan pointed out that the period of growth is an ideal time to strengthen institutions, even if it requires difficult decisions.
He discussed recent regulatory measures like Early Credit Loss provisioning and Liquidity Coverage Ratio rules aimed at ensuring long-term stability. Addressing the digital transformation in finance, he noted the potential benefits of the RBI’s Unified Lending Interface but cautioned about the risks associated with digital lending, including the visibility of lenders to borrowers.
He concluded by expressing optimism that the Indian financial sector would emerge stronger from challenges, urging stakeholders to recognise the intent behind regulations to protect the financial system.
5. Investors rewarding us for executing a very difficult business model well, says Zepto CEO
Aadit Palicha, Co-Founder and CEO of Zepto, credits the growing investor confidence in their quick commerce platform to strong execution of a challenging business model.
Following a recent $340 million fundraising round, Zepto’s valuation has surged to $5 billion, up from $3.6 billion just two months earlier. The company plans to use these funds to double its dark stores and expand into new markets, projecting sales to exceed ₹5,000 crore in FY24 as it prepares for an IPO. Palicha anticipates filing for the IPO by late 2025 or early 2026, focusing on building operational excellence rather than immediate profitability.
He noted that investor discussions have become more insightful, reflecting a deeper understanding of the business mechanics. Palicha emphasised that the success of Zepto and similar companies hinges on effective execution, which has shifted initial skepticism about the business model to growing confidence in its viability.
6. Vistara-Air India merger gets one step closer post FDI nod for Singapore Airlines
Singapore Airlines announced that the Indian government has approved foreign direct investment for the merger of Vistara, its joint venture with Tata, into Air India, expected to complete by the end of 2024.
Vistara will operate independently until November 11, 2024, after which its flights will be integrated under the Air India brand. Additionally, Vistara’s Club program will merge with Air India’s Flying Returns, with points transferred at a 1:1 ratio, remaining valid for one year post-migration.
7. Crunching Numbers | How Indians paid taxes in 2022-23
In the 2022-23 fiscal year, personal income tax collections in India surpassed corporate tax collections, revealing intriguing insights from the income tax department.
Approximately 19 individuals reported salaries between ₹100 crore and ₹500 crore, while 68 earned between ₹50 crore and ₹100 crore. Expanding the income scope, 23 individuals disclosed earnings over ₹500 crore, and 262 reported incomes in the ₹100 crore to ₹500 crore range.
The largest taxpayer group, over 20 million individuals, earned between ₹5.5 lakh and ₹9.5 lakh annually, averaging ₹6.99 lakh. Nearly 12 million individuals fell within the ₹5.5 lakh to ₹9.5 lakh salary bracket, with an average salary of ₹7.24 lakh.
In terms of rental income, three individuals earned between ₹25 crore and ₹50 crore, while 32 earned between ₹10 crore and ₹25 crore. Additionally, 14 individuals reported long-term capital gains exceeding ₹500 crore, indicating strong investment interest despite risks. The data does not disclose individual names.
8. Sebi tightens eligibility criteria for stocks to enter/exit F&O segment
Markets regulator, the Securities and Exchange Board of India (SEBI), has introduced stringent eligibility criteria for the entry and exit of stocks in the derivatives (Futures & Options) segment.
The revised guidelines, effective immediately, aim to ensure that only high-quality stocks with sufficient market depth are traded in this segment, thereby minimising risks such as market manipulation and increased volatility.
9. IMD forecasts heavy rains in several states over weekend; orange alert issued in Gujarat
The India Meteorological Department (IMD) has forecast very heavy rainfall across several regions, including Saurashtra, Kutch, Odisha, Telangana, East Rajasthan, Mahe, and Gujarat.
Gujarat has faced significant rainfall, leading to severe waterlogging, with an orange alert issued for districts like Porbandar and Jamnagar. New Delhi experienced heavy rains on August 29, causing temperatures to drop to 28.8 degrees Celsius.
The IMD predicts widespread light to moderate rainfall in West and Central India, with isolated heavy rainfall expected in various areas over the coming days. In East and Northeast India, states like Assam and Meghalaya will see light to moderate rainfall, with extremely heavy rainfall anticipated in Odisha.
South Peninsular India can expect widespread rainfall in Coastal Karnataka and Kerala, while Northwest India will experience scattered rainfall in Jammu and Kashmir, Himachal Pradesh, and East Rajasthan. The forecast indicates continued rainfall and potential flooding in affected areas.
10. CEA Nageswaran: Banking sector shouldn’t kill the goose that lays the golden eggs by over-lending on personal loans
India’s Chief Economic Advisor (CEA), V Anantha Nageswaran, cautioned the banking sector against excessive lending in personal or consumer loans, warning that it could have a long-term negative impact. Speaking at the CNBC-TV18 Banking Transformation Summit on Friday, Nageswaran emphasised the importance of prudent lending practices to ensure the sector’s stability.
