India’s Banking System Faces Deepest Liquidity Deficit in 15-Year

For the first time since April 2010, India’s banking system has recorded a cash deficit of ₹3.3 lakh crore. This deficit, as measured by banks’ borrowings from the Reserve Bank of India (RBI), highlights a sharp contraction in systemic liquidity, raising concerns about borrowing costs and overall financial stability.

Key Reasons Behind the Liquidity Crunch

  1. Foreign Exchange Market Interventions:
    RBI’s active involvement in stabilising the rupee has drained liquidity. Recent forex market volatility has necessitated significant intervention, affecting cash flow in the banking system.
  2. Tax and GST Outflows:
    With periodic outflows due to tax payments and Goods and Services Tax (GST) settlements, substantial cash is temporarily locked out of circulation, tightening liquidity further.
  3. Capital Flow Volatility:
    Prolonged outflows by foreign investors have added to the liquidity strain. This has been compounded by rising global oil prices, which have further pressured the rupee and depleted reserves.
  4. Just-In-Time (JIT) Implementation:
    Movements in government cash balances under the JIT framework have impacted systemic liquidity, amplifying the current deficit.

RBI’s Response and Challenges Ahead

To address the liquidity deficit, the RBI has resorted to injecting funds into the system. Between December 16, 2024, and January 15, 2025, the central bank infused ₹11.5 lakh crore through Variable Rate Repo (VRR) operations with short maturities of 1 to 7 days. Despite these efforts, liquidity pressures persist.

Implications of Lower Liquidity

  • Higher Borrowing Costs:
    Banks facing liquidity shortages may transfer higher borrowing costs to consumers, potentially leading to increased lending rates.
  • Economic Growth Concerns:
    While some expect a rate cut in the RBI’s upcoming February meeting to spur growth, a liquidity surplus is critical for passing on the benefits of reduced interest rates.

The Rupee’s Performance and Its Impact

The rupee has faced consistent pressure due to extended foreign outflows and a surge in global oil prices. On January 14, the rupee hit an all-time low of ₹86.70 against the US dollar, losing 2.5% of its value in three months. Defending the currency has led to substantial spending of foreign reserves, sparking debate about the long-term sustainability of this approach.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Who Will Lead SEBI Next? FinMin Invites Applications for Chairperson Role with ₹5.62 Lakh Monthly Salary

The Ministry of Finance has initiated the search for a new Chairperson for the Securities and Exchange Board of India (SEBI), with the current Chairperson, Madhabi Puri Buch, completing her term on February 28, 2025. This marks a significant leadership transition for India’s market regulator, responsible for safeguarding investor interests and regulating securities markets.

Eligibility Criteria for SEBI Chairperson

The advertisement released by the Department of Economic Affairs outlines stringent eligibility requirements to ensure only the most qualified candidates apply. The Ministry seeks individuals with:

  • Integrity, ability, and standing.
  • Expertise in securities markets or specialisation in fields such as law, finance, economics, accountancy, administration, or related disciplines.
  • Independence from financial or other interests that might prejudice their functions as Chairperson.

The role requires a leader who can effectively navigate the complexities of India’s evolving financial ecosystem.

Appointment Process

The Financial Sector Regulatory Appointments Search Committee (FSRASC) will oversee the selection process. While the committee will review formal applications, it may also consider individuals who have not applied directly. This inclusive approach ensures a wider pool of talent for this critical position.

Tenure and Compensation

The selected Chairperson will serve a maximum tenure of 5 years or until reaching 65 years of age, whichever is earlier. The appointee may choose between:

  • Pay equivalent to a Secretary to the Government of India, or
  • A consolidated salary of ₹5,62,500 per month, excluding housing and vehicle benefits.

This flexibility reflects the Government’s efforts to attract highly qualified candidates.

Leadership Legacy at SEBI

Madhabi Puri Buch, the outgoing Chairperson, made history as the first woman to lead SEBI. Her tenure began on March 2, 2022, and she brought a wealth of experience from her prior role as a Whole-Time Member of SEBI (2017–2022).

Notably, the usual tenure for a SEBI Chairperson is 3-year. However, exceptions have been made, as seen with UK Sinha and Ajay Tyagi, who served 6 and 5 years, respectively.

Conclusion

This invitation for applications underscores the Government’s commitment to appointing a leader capable of steering SEBI through India’s dynamic financial markets. The selected Chairperson will have the responsibility of upholding SEBI’s mandate to protect investor interests and ensure market integrity and applications open till February 17. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

DeepSeek Impact: Is a Chinese AI Start-up Shaking the Market?

The US stock futures took a sharp hit early on Monday, January 27, reflecting a possible turbulent start for global markets. Nasdaq futures tumbled by nearly 400 points, with the Dow Jones futures following suit, down close to 200 points. This development is casting a shadow on the Indian stock market, particularly the Nifty 50, ahead of its January expiry and the Union Budget this weekend.

The Role of DeepSeek in Market Sentiment

The steep sell-off has been linked to DeepSeek, a Chinese AI start-up that has quickly made waves in the tech world. Emerging as the most downloaded free app on the iOS App Store, DeepSeek is being hailed as a formidable competitor to ChatGPT. With speculation around ChatGPT’s potential transition to a for-profit model, DeepSeek’s free alternative has attracted significant attention, prompting fears of a bubble burst in the US AI sector.

Cost Efficiency Redefining AI Development

DeepSeek has turned heads not only for its capabilities but also for the economics of its development. While ChatGPT’s training required 10,000 Nvidia GPUs and an estimated cost of $100 million to $1 billion, DeepSeek claims to have built a comparable model in just two months for $5.58 million, using only 2,000 GPUs. This stark contrast has raised eyebrows across the tech industry, potentially pressuring valuations of AI-centric companies like Nvidia, which enjoyed a massive 135% rally in 2024.

Potential Impact on US Tech Stocks

The emergence of DeepSeek has sparked broader concerns over the valuations of US tech companies heavily invested in AI. Nvidia, a key player in providing GPUs for AI development, is expected to remain under scrutiny. With market participants questioning whether DeepSeek could trigger a revaluation of AI technology costs, the tech-heavy Nasdaq is bearing the brunt of the sell-off.

The Bigger Picture: Global Market Implications

Beyond the Nasdaq, the ripple effects of this development are being felt in global markets. The Dow Jones snapped a 4-day winning streak last Friday and has continued its decline. Closer to home, the Nifty 50 index follows suit, as investor sentiment remains cautious ahead of critical domestic events like the Union Budget.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

AMFI and AMII Sign MoU to Enhance Mutual Fund Ecosystems in India and Indonesia

In a significant move to enhance bilateral financial cooperation, the Association of Mutual Funds in India (AMFI) and the Asosiasi Manajer Investasi Indonesia (AMII), the Indonesian Investment Managers Association, recently inked a Memorandum of Understanding (MoU). This collaboration aims to strengthen mutual fund sectors in both nations by sharing expertise, advancing industry standards, and fostering investor education and financial literacy.

A Platform for Knowledge Sharing and Growth

This partnership establishes a structured platform for India and Indonesia to exchange best practices, regulatory insights, and strategies. It will focus on strengthening their respective mutual fund industries while fostering a globally integrated and transparent ecosystem.

The key areas covered under this MoU include:

  • Regulatory Reforms: Enhancing frameworks to ensure compliance and stability.
  • Governance Standards: Promoting ethical practices and accountability.
  • Investor Protection: Developing robust mechanisms to safeguard investor interests.
  • Data Analytics and Research: Leveraging data to drive informed decisions.
  • Product Innovation: Encouraging the creation of diverse investment solutions.
  • Risk Management: Implementing strategies to mitigate financial risks effectively.

Promoting the Global South’s Economic Leadership

The collaboration aligns with India’s vision of leading the Global South by fostering economic partnerships among emerging markets. Navneet Munot, Chairman of AMFI, remarked that this partnership underscores the importance of strong capital markets and a thriving asset management industry.

The delegation, comprising 12 CEOs from Indonesia’s mutual fund sector, joined the Indonesian President on his state visit to India. The discussions during the visit revolved around opportunities in the mutual fund industry and strategies for creating sustainable, globally competitive markets.

Learning from Each Other

Hanif Mantiq, Chairman of AMII, highlighted the value of this collaboration in learning from each other’s regulatory frameworks and governance structures. This exchange aims to ensure greater security and innovation for investors in both countries.

The MoU is expected to serve as a model for enhancing financial ties between other emerging markets, showcasing the potential of shared expertise and mutual growth.

Key Highlights from the Round Table

As part of the event, AMFI hosted a Round Table for the visiting Indonesian delegation. Key discussions included:

  • India’s Economic Growth Story: Insights into the drivers of India’s robust economic performance.
  • Opportunities in the Mutual Fund Sector: Highlighting the potential for growth and innovation.
  • Technology’s Role in Capital Markets: Emphasising the transformative impact of digital tools.
  • Opportunities at GIFT City: Exploring India’s leadership in global financial innovation and governance.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Ceigall India Ltd Declared Lowest Bidder for NHAI Project in Punjab

Infrastructure construction company Ceigall India Ltd has been named the lowest bidder by the National Highways Authority of India (NHAI) for a major project in Punjab. The project, which involves the development of a six-lane greenfield southern Ludhiana Bypass, is an integral part of the Ludhiana-Ajmer Economic Corridor. Ceigall India’s bid for the project, estimated to cost ₹864.97 crore by the NHAI, stands at ₹923 crore.

Details of the Ludhiana Bypass Project

The Ludhiana Bypass project, located in Punjab, spans from NH-44 near Rajgarh village to the Delhi-Katra Expressway (NE-5) near Ballowal village. It is set to be executed under the hybrid annuity model, a financing method that combines both annuity payments and equity investments. Although the project was initially awarded to Ceigall India in June 2022 for ₹702 crore, it was later revoked due to the unavailability of the construction site. This time, Ceigall India’s bid price has risen to ₹923 crore, reflecting updated project estimates and conditions.

Ceigall India’s Legacy in Infrastructure Construction

Ceigall India, a leading player in infrastructure construction, has built a strong reputation over the years. The company has expertise in executing specialised structural works such as elevated roads, flyovers, bridges, railway overbridges, tunnels, highways, expressways, and runways. Over the last two decades, Ceigall India has evolved from a small construction firm into a prominent EPC (engineering, procurement, and construction) contractor, renowned for its design and construction of major road and highway projects.

The company’s operations are broadly divided into EPC and hybrid annuity model (HAM) projects, which span ten states in India, further demonstrating its extensive reach and capabilities in the infrastructure sector.

Ceigall India Share Performance

As of January 27, 2025, at 2:00 PM, Ceigall India shares are trading at ₹305.15 per share, down 3.78% from the previous closing price. Over the last month, the stock has fallen by 12.50%.

Conclusion

Ceigall India’s successful bid for the Ludhiana Bypass project marks another significant achievement for the company, underscoring its growing influence in India’s infrastructure sector. 


Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

KEC International Bags ₹1,445 Crore T&D Contracts

KEC International Ltd, a global leader in infrastructure EPC under the RPG Group, has announced major order wins in the T&D sector. These achievements highlight its growing role in supporting India’s energy and infrastructure development.

About The Order

KEC International Ltd, a leading infrastructure company under the RPG Group, has announced new orders worth ₹1,445 crore in the T&D sector. These projects include a major assignment in the ± 800 kV HVDC segment and a 400 kV transmission line, both awarded by Power Grid Corporation of India Limited (PGCIL).  

These new orders strengthen KEC’s position as a key player in India’s power infrastructure development. The company continues to expand its expertise in the T&D sector, contributing to the country’s growing energy needs.  

Strategic Growth in the HVDC Segment

Vimal Kejriwal, MD and CEO of KEC International, expressed excitement about the new orders and the company’s growing success in the HVDC sector including a terminal station project for a private client.

 He noted that rising power demand and the government’s focus on renewable energy create strong opportunities for the T&D business. With these orders, KEC’s total order intake this year has crossed ₹22,000 crores, showing over 70% growth compared to last year.

About KEC International

KEC International is a leading global player in the infrastructure EPC space, with expertise in power transmission and distribution, civil infrastructure, transportation, renewables, oil and gas pipelines and cables. The company operates in more than 30 countries and has a presence in over 110 countries, handling projects across various sectors. KEC is known for its contribution to large-scale infrastructure development and is recognized as the flagship company of the RPG Group.

About RPG Enterprises

Established in 1979, RPG Enterprises is one of India’s rapidly expanding business conglomerates with a turnover of $4.8 billion. The group operates across multiple industries, including infrastructure, tyres, pharmaceuticals, IT and speciality businesses. It is also exploring innovation-led technology solutions to drive growth in emerging sectors. This diversified approach has solidified RPG Enterprises’ position as a leader in India’s business landscape.

KEC Stock Performance 

As of January 27, 2025, at 10:35 AM, With a market capitalisation of ₹208.04 billion, KEC’s shares are trading at ₹783.90 per share, down 6.00% from the previous closing price. Over the last month, the stock has fallen by 32.15% and over the past year, it has declined by 34.71%. The stock has a 52-week high and 52-week low of ₹1,313.25 per share and ₹611 per share, respectively.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Jubilant Ingrevia Unveils New Facility in Gujarat

Jubilant Ingrevia Limited has launched a new cGMP-compliant manufacturing facility in Bharuch, Gujarat, aimed at producing nutraceuticals and dietary ingredients. This facility will help the company expand its reach in food, nutrition, cosmetics and infant nutrition markets worldwide.

New cGMP Facility for Niacinamide in Gujarat

Jubilant Ingrevia Limited has opened a new facility in Bharuch, Gujarat, to produce nutraceuticals and dietary ingredients for people. This facility is an addition to their USFDA-approved plant, which already supplies to the U.S., Europe, Japan and other regions. With a capacity of 5,000 metric tonnes, the new plant will make high-quality products for top global brands in food, nutrition and cosmetics. It also plans to supply food-grade Niacin for the infant nutrition market.  

Advancing in Vitamin B3 Production

The new facility will help Jubilant Ingrevia become a stronger global leader in producing Niacinamide (Vitamin B3). It will focus on making high-quality products with high bio-content, targeting profitable markets like skincare, hair care and infant nutrition. This gives the company a competitive edge by reducing dependence on lower-margin products and supporting customers who prefer sustainable and eco-friendly options.  

Commitment to Sustainability and Green Technology

The facility is part of Jubilant Ingrevia’s eco-friendly and fully integrated supply chain in the Nutrition & Health Ingredients business. Its sustainable production methods attract global brands looking for high-quality, environmentally friendly products. The company is already in talks with major international clients about starting to supply these products.  

About Jubilant Ingrevia Limited

Jubilant Ingrevia Limited is a global leader in Life Sciences and Specialty Chemicals with over 40 years of experience. They manufacture a wide range of products, including Vitamin B3, etc. and serve industries like pharmaceuticals, agrochemicals and consumer goods. The company operates 50 plants across India, employs over 2,300 people, and has been recognised for innovation, sustainability and 4IR technologies. 

Jubilant Ingrevia Stock Performance 

As of January 27, 2025, at 12:00 PM, With a market capitalisation of ₹107.11 billion, Jubilant Ingrevia’s shares are trading at ₹676.95 per share, down 1.87% from the previous closing price. Over the last month, the stock has fallen by 15.47% and over the past year, it has declined by 17.79%. The stock has a 52-week high and 52-week low of ₹885 per share and ₹420 per share, respectively.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Unified Pension Scheme: A New Era for Government Employees With Assured Payout

On 25th January 2025, the Finance Ministry announced the implementation of the Unified Pension Scheme (UPS), a significant reform aimed at providing an assured pension to central government employees. This scheme, effective from 1st April 2025, will apply to employees under the National Pension System (NPS) who opt for it. The UPS promises a more secure retirement benefit, offering a pension of 50% of the last 12 months’ average basic pay, subject to certain conditions.

Details of UPS With Assured Payouts

The UPS guarantees a pension of 50% of an employee’s average basic pay for the last 12 months before superannuation, provided the employee has completed a minimum of 25 years of service. If the employee has a shorter qualifying service period, they will receive a proportionate payout. The UPS will also offer a minimum assured payout of ₹10,000 per month for those retiring after 10 or more years of service.

Additionally, employees will have the option to choose between the UPS and the existing NPS. The scheme, once operational, will benefit around 23 lakh government employees, providing a more predictable and assured pension compared to the market returns-based payout under the NPS. The full implementation of the scheme will commence on 1st April 2025.

Family Payout and Dearness Relief

In the unfortunate event of the pensioner’s death after superannuation, the family will receive 60% of the original payout, which will be given to the legally wedded spouse. Furthermore, both the assured payout and the family payout will be eligible for Dearness Relief, calculated in the same manner as the Dearness Allowance for serving employees.

For employees opting for UPS, their accumulated corpus under NPS will be transferred to the new scheme. The government’s contribution will also increase, rising from the current 14% to 18.5%, offering more substantial financial support for future retirees. Importantly, the UPS aims to provide a reliable and consistent pension, contrasting with the volatility associated with market-based pensions under NPS.

Conclusion

The Unified Pension Scheme represents a significant shift towards providing government employees with a guaranteed retirement benefit. With a higher contribution from the government and assured payouts, it seeks to address the limitations of the existing National Pension System.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

SEBI Launches ‘Dharohar’ to Preserve Indian Securities Market Legacy

On the occasion of India’s 76th Republic Day, the Securities and Exchange Board of India (SEBI) unveiled “Dharohar – Milestones in the Indian Securities Market,” a comprehensive digital knowledge repository. The platform celebrates the long-standing history of organised trading in India, spanning over 150 years. It aims to preserve and showcase the evolution of the securities market while fostering greater awareness and understanding among various stakeholders.

A Comprehensive Repository for All Stakeholders

“Dharohar” offers an extensive archive of over 3,000 assets, including articles, regulations, interviews with prominent figures, historical newspaper clippings, share certificates, infographics, videos, and committee reports. Designed as an interactive platform, the repository features a timeline of significant milestones and 3D galleries, providing an engaging experience for a wide audience. Students, researchers, investors, journalists, market participants, and the general public can explore the history, diverse products, participants, and institutions of the market.

Collaborative Efforts Behind Dharohar

The creation of “Dharohar” is a result of collaborative efforts involving numerous contributors. SEBI acknowledged the support and expertise of individuals, institutions, members of the Monitoring and Advisory Committee of Project Dharohar, former chairpersons, whole-time members, employees, scripophilists, industry leaders, and associations. Their collective efforts have enriched the repository with historical and cultural significance.

SEBI has also emphasised that Dharohar will continue to grow, with new additions being made regularly. This ensures that the platform remains dynamic and increasingly valuable for users. By preserving the history of the securities market, SEBI has taken a significant step towards promoting financial literacy and creating a deeper connection between stakeholders and the market.

Conclusion

“Dharohar” serves as a testament to the Indian securities market’s remarkable journey and its impact on the nation’s financial ecosystem. By offering valuable insights and engaging resources, the repository is a significant step towards promoting financial literacy and preserving the market’s historical milestones.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

NFO Alert: UTI Nifty India Manufacturing Index Fund

The UTI Nifty India Manufacturing Index Fund – Regular Plan, offered by UTI Mutual Fund, is an open-ended equity scheme designed to track the Nifty India Manufacturing TRI, a benchmark index that represents companies in India’s manufacturing sector. The fund aims to deliver returns that align with the performance of the index, subject to tracking errors.

Fund Details

The new fund offer (NFO) opens on 28th January 2025 and closes on 10th February 2025. The scheme requires a minimum investment of ₹1,000. There is no lock-in period and no exit load, allowing investors the flexibility to redeem their investments at any time without additional costs.

Investment Objective

The fund’s strategy focuses on investing in the securities that make up the Nifty India Manufacturing TRI. By following a passive investment approach, it seeks to replicate the index’s performance before expenses. The fund emphasizes minimizing tracking errors and aims to provide an option for investors looking to gain exposure to the manufacturing sector.

Risk Category and Benchmark

This scheme is categorized as Very High Risk on the Riskometer. Investors should be aware that equity investments, particularly those focused on specific themes such as manufacturing, carry significant market risk.

The performance of the fund is benchmarked against the Nifty India Manufacturing TRI, which captures the growth of India’s manufacturing sector.

Management and Support

The fund is managed by Sharwan Kumar Goyal, an equity fund manager with over 18 years of experience in passive and quantitative strategies. 

The fund’s operations are supported by KFin Technologies Ltd., which serves as the registrar and transfer agent.

Curious about your SBI SIP returns? Get accurate estimates of your investment growth using our SBI SIP Calculator and stay ahead of your financial goals.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.