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RBI cuts its lending rate to banks by 0.35 per cent, GDP growth from 7 per cent to 6.9 percent 

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RBI

[vc_row][vc_column][vc_column_text]The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) headed by Governor Shaktikanta Das today (Wednesday, Aug 7) cut the key interest rate for the fourth time in a row, reducing the policy repo rate by 35 basis points – or 0.35 per cent, from 5.75 per cent to 5.40 per cent – citing economic slowdown and NBFC liquidity crisis.

In the earlier three policies, it has reduced repo rate by 25 basis points each.

The repo rate is the key interest rate at which it lends short-term funds to commercial banks. One basis point is one-hundredth of a percentage point.

With the current rate cut, RBI has reduced 110 bps so far this year. The move, bringing down the repo rate to the lowest in over nine years is intended to spur economic growth. The repo rate cut is expected to bring down equated monthly instalments (EMI) for home and other loan borrowers.

With today’s rate cut the Reserve Bank of India has become the most dovish Asian central bank, according to analysts.

Almost 80 per cent of 66 economists surveyed by news agency Reuters had expected the RBI to cut its benchmark repo rate by 25 bps. Three respondents predicted a 50 bps cut and the remaining 10 forecast the rate would be left unchanged.

The decision of the Monetary Policy Committee to cut repo rate was unanimous, with four members voting to cut rate by 35 basis points and the rest voting for a 25-basis-points reduction.

The central bank lowered the reverse repo rate, at which it borrows money from commercial lenders, to 5.15% from 5.50%. The MPC has maintained its policy stance as accommodative meaning that it is in favour of lowering the interest rates.

The RBI also cut gross domestic product (GDP) growth target for current financial year to 6.9 per cent from 7 per cent in the June policy. 

The range of GDP growth is projected at 5.8-6.6 per cent for first half of 2019-20, and 7.3-7.5 per cent for second half “with risks tilted to the downside”, the RBI said in its third bi-monthly policy statement of the current financial year.

On the inflation front, the RBI said it remained within the targeted band. It projected consumer inflation at 3.1 per cent in the second quarter, and 3.5-3.7 per cent in the second half of the current financial year, both below its medium-term goal of 4 per cent.

The last time the RBI made so many back-to-back cuts was after the global financial crisis over a decade ago, when most major central banks were desperate to revive economic growth.

The RBI noted that global economic activity has slowed down since the previous monetary policy meeting in June, owing to trade tensions among leading economies. It also noted that economic activity remained weakened in major emerging market economies. China, Russia and Brazil, among others, saw subdued activity, the RBI said.[/vc_column_text][/vc_column][/vc_row]

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Adani, Torrent compete to purchase Gujarat Titans from CVC Capital

The probable sale of the Gujarat Titans, with the lock-in period coming to a close, will therefore be a defining moment in the changing face of IPL investments.

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The Adani Group and Torrent Group are currently negotiating a deal with private equity firm CVC Capital Partners to offload a controlling stake in the Indian Premier League franchise Gujarat Titans. According to sources, close to the development, reports say CVC Capital Partners will be looking to sell a majority interest while retaining a minority share in the franchise.

This becomes important because it is aligned with the end of the lock-in period by the Board of Control for Cricket in India (BCCI), which restricts any new teams from selling stakes until February 2025. The three-year-old franchise Gujarat Titans is reportedly worth $1 billion to $1.5 billion. CVC Capital Partners had paid ₹5,625 crore for the franchise in 2021.

A source close to the development pointed out that IPL franchises have attracted many investors’ interest since the league has proved an asset with a good reputation for money-making capabilities and cash flows. This growing interest of investors embodies the financial value and stability that come with the IPL franchises.

Gautam Adani, who owns teams in the Women’s Premier League and UAE-based International League T20, is understood to be one of the serious buyers. In 2023, Adani’s group won the Ahmedabad franchise in the WPL with a bid of Rs1,289 crore, the highest offer. His interests in this potential deal signal his commitment to expanding his footprint in the cricketing world.

Arvinder Singh, COO of Gujarat Titans, exuded confidence in the financial future of the franchise. He said the team was confident of turning profitable in the next media rights cycle, referring to even the original ten IPL franchises that took four to five years to turn profitable. He added confidently that the Gujarat Titans would not only turn profitable but significantly enhance in brand value.
 
This surging interest of investors in it is evidence of the growing financial attractiveness of IPL franchises, driven by healthy revenue streams and an increasing global footprint. The probable sale of the Gujarat Titans, with the lock-in period coming to a close, will therefore be a defining moment in the changing face of IPL investments.

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PayTm share price slips 2 per cent over SEBI warning

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Paytm

The share price of PayTm fell by nearly 2 per cent on Tuesday following a warning from the the Securities and Exchange Board of India (SEBI).

PayTm’s parent One 97 Communication had got SEBI’s administrative warning letter on some transactions involving the PayTm Payments Bank during fiscal year 2021-2022. The bourses reacted strongly leading to PayTm shares falling by 1.88% to Rs 460.80 per share on the Bombay Stock Exchange.

SEBI said it had noted the violation with concern and said these matters are being viewed very seriously. The regulator warned the company to exercise caution going forward and improve compliance to rules to prevent similar incidents in the future.

The markets regulator added that failure to comply with rules may force it to invoke enforcement actions as per the law.

In its response to SEBI, PayTm said in a media release that it has always followed listing regulations, as well as any change to these rules over time. The company said it would keep up its commitment to maintain and follow high standards of compliance. Paytm said it intends to provide an adequate response to SEBI on this matter.

PayTm said it has always followed Regulation 23 along with Regulation 4(1)(h) of the SEBI Listing Regulations, without including any change made to these rules over time. Paytm added that the letter from  SEBI has no influence on its finances, operations or other activities in any way.

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Zomato, Swiggy hike platform fee by 6% 

After the hike, the platform fee would be Rs 6 per order from an earlier Rs 5 per order.

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The food delivery majors, Zomato and Swiggy, have recently increased their platform fee by 6 per cent for food orders initially in Delhi and Bengaluru.

The food giant is currently charging in the national capital and IT hub, Bengaluru, the platform fee is distinct from delivery fee, goods and services GST, handling charge and restaurant charges.

After the hike, the platform fee would be Rs 6 per order from an earlier Rs 5 per order. Gradually, the higher platform fee is expected to roll out to other cities as well.

Notably, this fee is applicable universally to all food orders, irrespective of customer enrollment in loyalty programmes offered by both food giants. The charges directly contribute to the companies’ revenue streams and cost management efforts. The platform fee goes to the food aggregators to apparently control costs and increase revenues.

In April, they charged Rs 5 per order, but now it’s been increased by Rs 6 per order. That’s a 20% increase in fees for food delivery. This change in their strategy to adjust the price in a market as they expand their services.

Increase in platform fees, impacting how much customers pay for their food deliveries across the board. When customers order food using the app, they will notice different charges, besides the platform fees. These include delivery fees, handling fees, GST (Goods and Services Tax), and charges from the restaurant.

The charges earned by the platform, directly go to the food delivery app, helping to manage all expenses and boost their wages. The food delivery platform aimed to make between Rs 1.25 to Rs 1.5 crore per day through the fee, the app charges.

In August last year, Zomato introduced platform fees of Rs 2 per order for the first time. In October, they raised their platform fees from Rs 2 to Rs 3 in most and in major cities. Additionally,  Zomato is a quick commerce platform.

According to reports, Zomato stock reached its highest price of Rs 232 on the Bombay Stock Exchange. This achievement has made Zomato founder and CEO, Deepinder Goyal, a billionaire. The company has experienced a strong upward trend over the past years, driven largely by the expansion and success of its quick commerce subsidiary in Blinkit.

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