MPC’s Surprise Pause, Year’s Best IPO And Birla’s Warning: Weekly Wrap
Pedestrians walk near the Bombay Stock Exchange (BSE), center, in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

MPC’s Surprise Pause, Year’s Best IPO And Birla’s Warning: Weekly Wrap

The RBI’s Monetary Policy Committee surprised by keeping the key interest rates unchanged, Ujjivan Small Finance Bank’s initial public became the most subscribed IPO of 2019, and Kumar Mangalam Birla warned that Vodafone Idea may shut if the government doesn’t offer relief. Here’s what happened in the business world and the markets between Dec. 2 and 6.

MPC Decision: Key Highlights

India’s Monetary Policy Committee unexpectedly kept the benchmark repo rate unchanged at 5.15 percent. All 34 economists surveyed by Bloomberg as of Wednesday had forecast cut, with the majority expecting a quarter-point reduction and the rest pegging it between 15 and 50 basis points.

Key highlights:

  • MPC left repo rate unchanged at 5.15 percent.
  • MPC left reverse repo rate unchanged at 4.9 percent.
  • All MPC members voted to keep rates unchanged.
  • MPC maintained monetary policy stance at “accomodative as long as it is necessary”.

Read these to get up to speed:

  • RBI tightens norms for urban cooperative banks.
  • RBI raises peer-to-peer lending limit fivefold.
  • RBI fully aware of the vulnerabilities in NBFC sector, says Shaktikanta Das
  • Monetary Policy: The cost of inflation targeting.

Catch all the coverage on monetary policy here.

Ujjivan Small Finance Bank: Best India IPO Of 2019

The initial public offering of Ujjivan Small Finance Bank was subscribed 166 times on the last day of the share sale, exchange data showed on Wednesday, with non-institutional investors driving demand.

In the process, it overtook Indian Railway Catering And Tourism Corporation Ltd. as the most subscribed IPO of 2019, according to data on the National Stock Exchange.

Birla Warns Of Vodafone Idea Shutdown

Aditya Birla Group Chairman Kumar Mangalam Birla warned of a Vodafone Idea shutdown if the government doesn’t provide relief on the liability it faces on past statutory dues following a Supreme Court order, PTI reported.

“If we are not getting anything then I think it is end of story for Vodafone Idea,” the news agency quoted Birla as saying at the HT Leadership Summit on Friday.

Sensex Halts Longest Stretch Of Weekly Gains

India’s equity benchmark—the S&P BSE Sensex—halted its five-week gaining streak, their longest stretch of weekly gains since the first week of April.

The 31-share index fell 0.82 percent this week to close at 0.82 percent. The broader NSE Nifty 50 fell 0.8 percent during the period to end at 11,921.50.

Nine out of 11 sectoral gauges compiled by the NSE declined, led by the NSE Nifty PSU Bank index’s 7.8 percent fall. The NSE Nifty IT Index was the top sectoral gainer, up 1.9 percent.

How The Broader Markets Performed

The broader markets represented by the NSE Nifty 500 Index fell 0.9 percent this week, led by the declines in Omaxe Ltd., Dish TV India Ltd. and Yes Bank Ltd.

How Currencies Peroformed

The Indian rupee registered its best run in 12 weeks. The home currency appreciated 0.74 percent to end at 71.20, becoming the best performer in Asia.

Key Events To Watch Next Week

  • Dec. 12: Manpower survey for first quarter.
  • Dec. 12: India to report CPI inflation data for November
  • Dec. 12: India to report industrial production data for October.
  • Dec 12-15: India to report trade balance data for November.
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