The lockdown that crippled the entire logistics, delivery and supply chain network to near zero, was enough to deal a body blow to India's fastest growing unicorn whose very business model saw a severe disruption, like several other firms and sectors.
While weather forecasters remain divided on how the monsoons will play out in India over the next few months, analysts believe the news at the current juncture - at best - can trigger a knee-jerk reaction in the markets. They believe it is too early to say whether the sub-par monsoon on account of El Nino can seriously dent the market sentiment in the short-to-medium term. "These are just initial forecasts and we will have another round / status update from the weather forecasters a month down the line.
Fitch reaffirmed India's rating at 'BBB-' with a Stable Outlook saying the rating balances a still strong medium-term growth outlook compared with similar category peers and relative external resilience stemming from solid foreign-reserve buffers against high public debt, a weak financial sector and some lagging structural factors, including governance indicators and GDP per capita.
'Those who come from outside are surprised at the relatively small strength of the RBI supervisory cadre, relative to the needs of the country and the needs of the financial sector.'
How much will the banks' bad assets grow in March? It could be anywhere between Rs 1.2 trillion and Rs 2 trillion, observes Tamal Bandyopadhyay.
'The probability of another negative year in 2019 is low.'
In all, RBI has cut interest rates by 110 bps this year. But this has not yet led to a boost in economic activity. While the growth rate has slowed to a five-year low, consumer confidence is waning and foreign direct investment has plateaued.
Gold prices fell to a 5-year low of less than $1,100/ounce.
Historically, overall credit has grown at 1.6 times GDP growth
The Reserve Bank of India (RBI) has clarified that loans which have remained standard without any defaults as of March 1, 2020, will be eligible for restructuring under the pandemic-related resolution framework issued in August.
Digital services work best when the seller designs a system where default options are designed to help the buyer, says Debashis Basu.
Due to tax associations with the fiscal-ending, April is a month of SIP renewal. So, the April numbers will be important and may perhaps, mark a change in retail attitude.
In India, it is not easy to fight it out with the large banks which are nimble-footed and technology-savvy and are continuously innovating on the retail turf with newer products for customer acquisition.
Only six sectors are likely to report good set of numbers in Q4 FY15.
A fall presents an opportunity to buy rate-sensitive stocks.
It takes a longer time to avail of these loans, owing to tight due-diligence process of banks.
The first stage of the inclusion strategy was focussed on opening bank accounts, logically seen as creating the last-mile channels for financial access.
'The real estate sector has been badly bruised because it has become too reliant on funding from NBFCs, including housing finance companies. 'When the NBFC industry was rocked late last year by a large default, the real estate sector was hit hard. 'An intricate web of links between rural incomes, construction activity and shadow banks are fuelling the economic slowdown', says Pranjul Bhandari.
The RBI panel has also recommended a government-sponsored 'fund of funds' of Rs 10,000 crore to support the venture capital and private equity firms investing in the MSME sector.
The Financial Stability and Development Council meeting on Tuesday started with an air of tension in the room. An official present described the participants' body language as "tetchy". However, once presentations and discussions begun, the mood considerably eased.
As the government plans to take sector-specific steps to tackle the slump, Finance minister Nirmala Sitharaman will soon hold talks with representatives from various sectors to get and take steps so that the confidence of those sectors can be restored.
If you have an active trading account or have consumer loans or thinking of taking out a loan, consider investing in NBFCs, says Devangshu Datta
Kumaraswamy predicted that the political instability would continue in the state.
'Investors should reduce cash gradually and look for value investing.'
'One way of doing this could be offering credit guarantee to the banks, say 10 per cent, for fresh loans given to micro, small and medium enterprises,' observes Tamal Bandyopadhyay.
Ajay Piramal bets highly on infrastructure, realty
Nifty, which has struggled around 8550-8560 levels managed to blast past this resistance and close above the psychological mark of 8600.
Due to the prevailing uncertainty, the risk of loans going bad has certainly increased. This may result in lenders following risk-based pricing more diligently, notes Naveen Kukreja, CEO, Paisabazaar.com
Corporate leaders said a stable government at the Centre will help boost infrastructure spend, address agricultural distress, and encouraging employment.
The biggest challenge with public sector banks is the processing time, which is why starting early helps.
An NBFC must actively manage its collateral positions, differentiating between encumbered and unencumbered assets, and monitor such assets so that they can be mobilised in a timely manner, central bank says in circular.
The move comes within months of a crisis at JPMorgan Asset Management Company.
This is one of the many such cases that helped to create an acute fear psychosis among public sector bankers, reveals Tamal Bandyopadhyay in his fascinating new book Pandemonium: The Great Indian Banking Tragedy.
The economic slowdown has made it difficult for companies to record financial closure of a few awarded projects.
It will be the first to go, in what has become an overcrowded segment since India first allowed futures trading in commodities in 2003.
Moody's said the government will face challenges in achieving its deficit target for the fiscal year ending March 2021, amid persistent structural and cyclical headwinds to growth.
NBFCs are mainly dependent on funding their operation from their own cash flows.
The purchase or construction of houses by large numbers of people can add meaningfully to India's economic growth, points out Neelkanth Mishra.
Amid tax treaty uncertainties, India's share of the number of investments made by global companies through Mauritius has almost halved in the past two years even as Africa's share has surged significantly.
In a soon to be published book, 'Of Counsel: The Challenges of the Modi-Jaitley Economy,' former chief economic advisor Arvind Subramanian says though RBI has a good reputation, it does not mean it's always right, as for years, the RBI was unable to grasp the seriousness of the loan repayment problems or identify the prolonged frauds of Nirav Modi and the likes.
