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<ul><li><keyword id="19895995" type="General" weightage="20" keywordseo="hdfc-bank" source="keywords">HDFC Bank</keyword>’s loan to deposit ratio (<keyword id="20235896" type="General" weightage="20" keywordseo="ldr" source="keywords">LDR</keyword>) went up to a tight 110% versus its pre-merger LDR of around 85%.</li><li>There is chatter that the RBI intends to bring LDR to around 75%, which may stress other banks as well.</li><li>If it happens, margins will be stressed, and cause aggressive deposit mobilization that will cause de-rating of the sector, say analysts. </li></ul><keyword id="19896378" type="General" weightage="20" keywordseo="hdfc" source="keywords">HDFC</keyword> Bank opened 2.5% lower on Thursday, after a sharp 9% plunge on Wednesday as its third quarter earnings report shocked the street. The bank, which reported its second earnings report after merger with parent HDFC, saw its loan to deposit ratio (LDR) go up to a tight 110%. Its pre-merger LDR was anywhere between 85-89%. The Reserve Bank of India is generally comfortable if banks maintain their LDRs between 70-75%. By this, India’s largest private bank will have the highest LDR. The market fears that it might not be the only one. “HDFC Bank results showed heightened levels of credit/deposit (CD) ratio beyond RBI’s comfort levels. This is the case with most other banks as well. Thus, the markets expect either margin pressure, in case banks go in for aggressive deposit mobilization, a slowdown in lending growth, or both. This development can lead to some de-rating of the sector,” said <keyword id="19958485" type="General" weightage="20" keywordseo="naveen-kulkarni" source="keywords">Naveen Kulkarni</keyword>, chief investment officer at Axis Securities. As of Thursday morning, Bank Nifty slipped by 0.8% or 384 points. Eight out of 12 of the banking index’s constituents opened in the red with Federal Bank, PNB and IndusInd Bank falling over 1%. The stress of deposit growth HDFC Bank, analysts say, will have to grow its deposit growth rate at 3-4% higher than credit growth to help improve its LDR to pre-merger levels. In the third quarter, its gross loan growth came in at 4.9% sequentially, while deposits grew at 1.9%. The management said that it plans to bring it back, but it will happen over 3-4 years. “Management has been replacing non-retail deposits with retail to granularize the deposit base and avoid the fiercer price competition in the non-retail space. System liquidity also declined in Q3 which led to more intense market deposit competition that the bank had chosen not to participate in,” said a report by CreditSights. In the meanwhile it has plans to grow its unsecured loans in the range of high-teens in spite of RBI’s recent crackdown as they now make up for 22% of its loan book, after the merger. To be able to chase this growth without a fast ramp up in deposit growth, might stress net interest margins (NIMs). They came in flat for the quarter. “The lower liquidity coverage ratio (LCR) and slower deposit growth may limit net interest margin NIM expansion going forward. The reported NIMs of 3.6% (for interest earning assets) came below expectations. The lower LCR, CDR bottleneck and slower deposit growth may squeeze NIMs going forward,” said <keyword id="20080833" type="General" weightage="20" keywordseo="ajit-kabi" source="keywords">Ajit Kabi</keyword>, research analyst at LKP Securities.

Banks continue to spook markets after HDFC Bank’s LDR shock in Q3

<keyword id="20226501" type="General" weightage="20" keywordseo="benchmark-sensex" source="keywords">Benchmark Sensex</keyword> nosedived 1,628 points or 2.23 per cent on Wednesday, marking its biggest single-day slide in more than one-and-a-half years following an intense sell-off in banking, metal and oil shares triggered by weak global trends. The 30-share <keyword id="19895774" type="General" weightage="20" keywordseo="bse" source="keywords">BSE</keyword> Sensex plunged 1,628.01 points or 2.23 per cent to settle at 71,500.76 with 24 of its constituents ending in the red. During the day, it plummeted 1,699.47 points or 2.32 per cent to a low of 71,429.30. The <keyword id="19896381" type="General" weightage="20" keywordseo="nifty" source="keywords">Nifty</keyword> tanked 460.35 points or 2.09 per cent to settle at 21,571.95, falling for the second day in a row. Key stock indices suffered their worst single-day losses in percentage terms since June 13, 2022. The heavy fall in the markets comes on the back of a recent record-breaking rally. The BSE benchmark hit its all-time high of 73,427.59 on Tuesday, and the Nifty also reached its lifetime peak of 22,124.15 on the previous day. Investors became poorer by Rs 4.59 lakh crore on Wednesday due to a sharp fall in the equity markets where the BSE Sensex plummeted 1,628 points, dragged by bank stocks and weak global trends. Extending its previous day's decline, the 30-share BSE Sensex tanked 1,628.01 points or 2.23 per cent to settle at 71,500.76. During the day, it nosedived 1,699.47 points or 2.32 per cent to 71,429.30. The market capitalisation of BSE-listed companies eroded by Rs 4,59,327.64 crore to Rs 3,70,35,933.18 crore. In two days of market fall, investors' wealth fell by Rs 5,73,576.83 crore. Among the Sensex firms, <keyword id="19895995" type="General" weightage="20" keywordseo="hdfc-bank" source="keywords">HDFC Bank</keyword> fell over 8 per cent after its December quarter earnings failed to cheer investors. “Markets went into a tailspin led by banking stocks as HDFC Bank faltered sharply on worries of a drop in total deposits in the December quarter over the preceding quarter. The fall in banking had a rub-off effect on rate-sensitive sectors as automobile and realty stocks too witnessed frenzied selling. India's stock market valuations are expensively valued compared to other global stock indices and investors would wait for more positive cues now to extend their equity exposure. There are challenges in the near term such as persisting conflict in the middle east and worries over delay in US Fed rate cut, which could dampen investors' sentiment going ahead," said <keyword id="20226500" type="General" weightage="20" keywordseo="prashanth-tapse" source="keywords">Prashanth Tapse</keyword>, Senior VP (Research), Mehta Equities Ltd. HDFC Bank on Tuesday reported a 2.65 per cent rise in consolidated net profit of Rs 17,258 crore for the October-December period against Rs 16,811 crore in the preceding September quarter. Tata Steel, Kotak Mahindra Bank, Axis Bank, ICICI Bank, JSW Steel, Bajaj Finserv, Maruti, IndusInd Bank and State Bank of India were among the other major laggards. HCL Technologies, Infosys, Tech Mahindra, Tata Consultancy Services, Nestle and Larsen &amp; Toubro were the gainers. "A nosedive correction in banking stocks, along with concerns over delays in US FED rate cuts, impacted market sentiments. Given the elevated valuations, coupled with the fact that optimism regarding earnings and GDP growth for FY24 is already reflected in the market, triggered the correction," said <keyword id="19969359" type="General" weightage="20" keywordseo="vinod-nair" source="keywords">Vinod Nair</keyword>, Head of Research, Geojit Financial Services. In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong settled lower. European markets were also trading with sharp cuts. The US markets ended in negative territory on Tuesday. "Today's market fall is led by banks on the back of HDFC Bank results, showing heightened levels of credit/deposit (CD) ratio beyond RBI's comfort levels. This is the case with most other banks as well. Thus, the markets expect either margin pressure, in case banks go in for aggressive deposit mobilization, a slowdown in lending growth, or both. This development can lead to some de-rating of the sector. "After the significant up move we have witnessed recently, markets are taking a breather, especially since market valuations are higher than historical multiples," said <keyword id="19958485" type="General" weightage="20" keywordseo="naveen-kulkarni" source="keywords">Naveen Kulkarni</keyword>, Chief Investment Officer, Axis Securities PMS. Snapping its five-day winning run, the BSE benchmark declined 199.17 points, or 0.27 per cent, to settle at 73,128.77 on Tuesday. The Nifty ended lower by 65.15 points, or 0.29 per cent, at 22,032.30. "Today, the benchmark indices witnessed a sharp selloff, the nifty ends 454 points lower while the Sensex was down by 1614 points. Among Sectors, all the major sectoral indices were traded in the red but bank nifty and financial indices corrected sharply, both the indices shed over 4 percent. Technically, after a gap down open, the market witnessed intraday recovery but due to consistent selling pressure at higher levels, it again corrected sharply. A reversal formation on daily charts and bearish texture on intraday charts indicating weak sentiment is likely to continue in the near future. We are of the view that, the current market texture is weak but oversold hence, we could see pullback rally if the nifty succeeds to trade above 20 day <keyword id="20226499" type="General" weightage="20" keywordseo="sma" source="keywords">SMA</keyword>. For traders now, 21650/71850 or 20 day SMA (Simple Moving Average) would be the key level to watch out. Below the same, the weak sentiment is likely to continue. Below which, the index could slip till 21465-21400/71200-71000. On the other side, above 20 day SMA or 21650/71850 the market could bounce back till 21725-21750/72000-72100," said Kotak Securities. Global oil benchmark Brent crude declined 1.84 per cent to USD 76.85 a barrel. Foreign Institutional Investors (FIIs) bought equities worth Rs 656.57 crore on Tuesday, according to exchange data. With inputs from PTI. SEE ALSO:<a href="https://www.businessinsider.in/tech/mobile/news/apple-beats-samsung-for-the-first-time-since-2010-tops-global-smartphone-shipments/articleshow/106922358.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/apple-beats-samsung-for-the-first-time-since-2010-tops-global-smartphone-shipments/articleshow/106922358.cms" target="_blank">Apple beats Samsung for the first time since 2010, tops global smartphone shipments</a><a href="https://www.businessinsider.in/business/auto/news/tatas-punch-is-indias-most-affordable-electric-suv-and-comes-with-a-range-of-421-km/slidelist/106923825.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/auto/news/tatas-punch-is-indias-most-affordable-electric-suv-and-comes-with-a-range-of-421-km/slidelist/106923825.cms" target="_blank">Tata Punch EV is India’s most affordable electric SUV and comes with a range of 421 km</a> <a href="https://www.businessinsider.in/business/auto/news/ather-450s-vs-ola-s1-x-electric-scooter-price-range-and-features-compared/articleshow/106721416.cms">The EV scooter battle – Ather 450S vs Ola S1 X+ after the former slashes price</a>

Stock markets in free-fall: Sensex tanks 1,628 pts on sharp losses in banking, oil shares

Defending champions <keyword id="19906065" type="General" weightage="20" keywordseo="Chennai-Super-Kings" source="keywords" meta.keywordsubtype="org" meta.entityname="Chennai Super Kings" meta.hostid="261" meta.entityid="Chennai Super Kings">Chennai Super Kings</keyword> (CSK) will host the <keyword id="19920572" type="General" weightage="20" keywordseo="Lucknow-Super-Giants" source="keywords" meta.keywordsubtype="org" meta.entityname="Lucknow Super Giants" meta.hostid="261" meta.entityid="Lucknow Super Giants">Lucknow Super Giants</keyword> (LSG) in their reverse fixture of the <keyword id="19911541" type="General" weightage="20" keywordseo="IPL-2024" source="keywords">IPL 2024</keyword> on Tuesday. LSG are fifth with four wins in seven games while CSK are fourth with similar number wins. In their last encounter last week, LSG registered an eight-wicket win over the defending champions CSK. The two teams have met four times in the tournament so far of which one match was washed out. CSK v LSG head-to-head 4- Lucknow Super Giants: 2 Chennai Super Kings: 1 Abandoned: 1 CSK v LSG match time: The match starts at 7:30 PM IST (2:00 PM GMT) with the toss taking place half an hour before the match i.e., 7:00 PM (1:30 PM GMT) CSK v LSG match venue: MA Chidambaram Stadium, Chennai Live broadcast of CSK v LSG match on television in India: CSK v LSG match will be broadcast live via Star Sports Network. Live stream in India: The live streaming of CSK v LSG will be available on JioCinema. Squads: Chennai Super Kings: Ajinkya Rahane, Rachin Ravindra, Ruturaj Gaikwad(c), Ravindra Jadeja, Shivam Dube, Sameer Rizvi, Moeen Ali, MS Dhoni(w), Deepak Chahar, Tushar Deshpande, Mustafizur Rahman, Matheesha Pathirana, Shardul Thakur, Shaik Rasheed, Nishant Sindhu, Mitchell Santner, Daryl Mitchell, Aravelly Avanish, Maheesh Theekshana, RS Hangargekar, Simarjeet Singh, Mukesh Choudhary, Prashant Solanki, Ajay Jadav Mandal, Richard Gleeson Lucknow Super Giants: Quinton de Kock, KL Rahul(w/c), Nicholas Pooran, Marcus Stoinis, Deepak Hooda, Ayush Badoni, Krunal Pandya, Matt Henry, Ravi Bishnoi, Mohsin Khan, Yash Thakur, Arshin Kulkarni, Krishnappa Gowtham, Yudhvir Singh Charak, Manimaran Siddharth, Arshad Khan, Prerak Mankad, Amit Mishra, Kyle Mayers, Shamar Joseph, Ashton Turner, Naveen-ul-Haq, Devdutt Padikkal, Mayank Yadav SEE ALSO:<a href="https://www.businessinsider.in/stock-market/news/vodafone-idea-fpo-allotment-how-to-check-allotment-gmp-and-more/articleshow/109504341.cms" target="_blank"></a> <a href="https://www.businessinsider.in/stock-market/news/vodafone-idea-fpo-allotment-how-to-check-allotment-gmp-and-more/articleshow/109504341.cms" target="_blank">Vodafone Idea FPO allotment – How to check allotment, GMP and more</a><a href="https://www.businessinsider.in/tech/mobile/news/google-pixel-8a-may-be-more-expensive-than-its-predecessor-as-per-a-new-leak/articleshow/109499394.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/google-pixel-8a-may-be-more-expensive-than-its-predecessor-as-per-a-new-leak/articleshow/109499394.cms" target="_blank">Google Pixel 8a may be more expensive than its predecessor, as per a new leak</a><a href="https://www.businessinsider.in/sports/webstories/at-17-indian-chess-prodigy-d-gukesh-becomes-youngest-challenger-for-world-championship/slidelist/109492021.cms" target="_blank"></a> <a href="https://www.businessinsider.in/sports/webstories/at-17-indian-chess-prodigy-d-gukesh-becomes-youngest-challenger-for-world-championship/slidelist/109492021.cms" target="_blank">At 17, Indian chess prodigy D Gukesh becomes youngest challenger for World Championship</a>

IPL 2024: CSK v LSG overall head-to-head; When and where to watch

New Delhi, The market capitalisation of BSE-listed firms hit a fresh all-time high of Rs 294.49 lakh crore in Wednesday's morning trade as the benchmark Sensex reached its lifetime peak of 63,588.31. The 30-share BSE benchmark advanced 260.61 points or 0.41 per cent to hit its all-time high of 63,588.31 in morning trade. On December 1 last year, the Sensex hit its intra-day record peak of 63,583.07. The optimistic trend in equities helped the market capitalisation (mcap) of BSE-listed firms reach an all-time peak of Rs 2,94,49,069.63 crore in morning trade. Buying in index majors <keyword id="6652791" type="General" weightage="20" keywordseo="hdfc-twins" source="Orion">HDFC twins</keyword> and Reliance Industries helped the markets to trade firm. "Sensex touched the all-time high mark, and Nifty 50 is a few points away from the all-time high level. "The Indian market has seen a solid rally in the last couple of months, especially in the mid- and small-cap space, led by positive FII flows, robust economic growth versus other EM countries, strong earnings outlook, robust demand across the sector, the banking sector in better shape, and private capex cycle expectations," Naveen Kulkarni, Chief Investment Officer at Axis Securities PMS, said. Kulkarni further added that the Indian economy stands at a sweet spot of growth and remains the land of stability against the backdrop of a volatile global economy. From the Sensex pack, <keyword id="6368906" type="General" weightage="20" keywordseo="power-grid" source="Orion">Power Grid</keyword>, HDFC Bank, HDFC, Larsen &amp; Toubro, Reliance Industries, Wipro, Hindustan Unilever, and UltraTech Cement were the major gainers. Tata Motors, Tata Steel, Maruti, Axis Bank, ICICI Bank, and Asian Paints were among the laggards. In Asian markets, Tokyo quoted in the green, while Seoul, Shanghai, and Hong Kong were trading lower. The US markets ended lower on Tuesday. Global oil benchmark Brent crude climbed 0.46 per cent to USD 76.24 a barrel. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,942.62 crore on Tuesday, according to exchange data. The 30-share BSE benchmark settled higher by 159.40 points or 0.25 per cent at 63,327.70 on Tuesday. The Nifty advanced 61.25 points or 0.33 per cent to end at 18,816.70.

Mcap of BSE-listed firms reach fresh record high of Rs 294.49 lakh crore in morning trade;  Power Grid, HDFC twins, L&T top gainers

<ul><li><keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword>’s pause could be a prolonged one as the path of monetary policy remains fraught with risks. </li><li>Surprise rate hikes by the Bank of Australia and Bank of Canada in June, after a pause suggests central banks are not yet done with the hike cycle. </li><li>Market expects RBI to review its stance again in August, if monsoon is normal and risks to commodity prices abate. </li></ul>The road ahead for monetary policy continues to remain fraught with risks. As expected, the rate setting committee of the Reserve Bank of India held on to benchmark rates yet again at its June review, but there is no change in its stance. The Reserve Bank of India <keyword id="6375120" type="General" weightage="20" keywordseo="monetary-policy-committee" source="Orion">Monetary Policy Committee</keyword> retained the <keyword id="43352" type="General" weightage="20" keywordseo="repo-rate" source="Orion">repo rate</keyword>, or the lending rate of the central bank, at 6.5%, but this is not a pivot. This is the second straight policy in which rate has been held showing that the rate hike cycle may have peaked for now. Markets were penciling in a rate cut towards the end of this year, as the inflation print in April came in at 4.7%. “Being in the inflation tolerance band is not enough. Our goal is to bring inflation to 4%,” <keyword id="64190" type="General" weightage="20" keywordseo="rbi-governor" source="Orion">RBI Governor</keyword> Shaktikanta Das said on Thursday. Fixed income experts and economists believe that all expectations of a rate cut are off the table for now, as risks to both growth and inflation remain elevated. Economists were unanimous in their expectations ahead of the policy statement on a pause. However, the surprise rate hikes announced by the Bank of Australia and Bank of Canada in June have spooked markets. Bank of Australia too has hiked rates in June to 4.1% this month while Bank of Canada benchmark hiked rates to 4.75% hours before RBI’s announcement. Economists are of the view that the RBI too is keeping the door open for further hikes, given that risks to inflation are not yet over. It is noteworthy that the pause in rate hike comes after the benchmark rate was hiked by 250 basis points since May 2022 and a breather was only taken in the April policy this year. Like many other developed economies, the central bank’s prolonged pause is now a certainty. Rate Cut Hopes Delayed Further Even though RBI has lowered its inflation projection for FY24 at 5.1% from the earlier estimates of 5.2%, the risks are still elevated. “We will keep Arjuna’s eye on inflation,” said Das. He added, “MPC will remain vigilant and will take further policy action as and when required to keep inflation expectations anchored and bring inflation down to 4%” Economists are interpreting this as a prolonged pause. Says Lakshmi Iyer, CEO-Investment &amp; Strategy, Kotak Investment Advisors, “Given global macro headwinds still visible, the members did not feel appropriate to change their stance. It looks like the market wait for rate cuts just got longer, as we saw Canada policy makers announce a surprise rate hike. Key incoming data dependency will continue to be the order of the day. Policy maker guard rails remain. Bonds may continue its sideways movement and continue to track global bond yields specifically US treasuries.” India may be in a sweet spot, but since global central banks are still hawkish and clearly not done with the hikes, RBI has chosen to retain the pause for now. Economists expect that the MPC will take a call in August 2023, the RBI will have enough data on El Nino and its potential impact on inflation before it decides on any rate cut. BY August, the Fed funds there will be clarity on the path of the US Fed’s fund rate too. If both these factors remain benign, then the <keyword id="3929464" type="General" weightage="20" keywordseo="rbi-mpc" source="Orion">RBI MPC</keyword> could look at changing its stance to “neutral” in August. Market participants are unanimous on the possibility of a prolonged pause. Naveen Kulkarni, Chief Investment Officer, Axis Securities PMS, expects an extended pause on interest rates from the regulator in the near future. While the inflation is expected to hover above the tolerance limit in FY24, the RBI has marginally reduced its inflation forecast to 5.1% vs 5.2% in the previous policy. Growth And Inflation Are Evenly Balanced For Now India’s economy exited FY23 with GDP growth of 7.2%, which was better than estimates. This combined with retail inflation dipping to an 18-month low, both growth and inflation appear to be evenly balanced. While rural demand continues to be weak, the recent hikes in MSP and normal monsoon could come to the rescue. However, there still may be some spillover risks to inflation. Keeping the risks in mind, the RBI has kept its growth projection for the current financial year (FY24) unchanged at 6.5%. This comes at the backdrop of the World Bank revising India’s GDP forecast downwards by 30 bps earlier in the week. The Indian economy and financial sector stand out as strong and resilient, and domestic macroeconomic fundamentals are strengthening. Rural demand is on a revival path,” said Das adding, “GDP growth in 2022-23 turned out to be stronger than anticipated and is holding up well. Highlights financial stability concerns, impact of rate hikes.”

It’s a pause, not a pivot by RBI: Rate cut hopes pushed out for now

<ul><li>The Indian government recently announced a wheat export ban, flip-flopping on its stance the week before.</li><li>It added curbs on sugar exports and exempted import duties on palm oil, which could cool down the rising prices of raw materials of packaged food products.</li><li>This could provide some much-needed relief to FMCG companies like <keyword id="44863" type="General" weightage="100" keywordseo="hul" source="Orion">HUL</keyword>, <keyword id="6357073" type="General" weightage="80" keywordseo="itc" source="Orion">ITC</keyword> and <keyword id="6359432" type="General" weightage="80" keywordseo="britannia" source="Orion">Britannia</keyword>, among others, say experts.</li></ul>The Indian government seems to be determined to tame inflation with <a href="https://www.businessinsider.in/india/news/how-the-indian-government-is-softening-the-inflation-blow-with-export-bans-duty-cuts-and-subsidies/articleshow/91786486.cms">intervention</a>s like <a href="https://www.businessinsider.in/international/news/not-just-india-many-countries-are-protecting-their-wheat-to-keep-daily-bread-affordable/articleshow/91733019.cms">wheat export ban</a>, <a href="https://www.businessinsider.in/stock-market/news/shree-renuka-balrampur-chini-dalmia-sugar-shares-plunge-on-export-curb-reports/articleshow/91766919.cms">restrictions on sugar exports</a> and waiver of import duties on <a href="https://www.businessinsider.in/retail/news/biscuits-ghee-and-hair-oil-to-get-cheaper-after-government-duty-cut-but-after-three-months/articleshow/91784809.cms">palm oil</a> and more. Apart from lightening the load on grocery bills, the moves can aid FMCG giants like <keyword id="6365619" type="General" weightage="80" keywordseo="hindustan-unilever" source="Orion">Hindustan Unilever</keyword>, Britannia, <keyword id="75190" type="General" weightage="50" keywordseo="nestle" source="Orion">Nestle</keyword> and <keyword id="99744" type="General" weightage="80" keywordseo="godrej-consumer" source="Orion">Godrej Consumer</keyword>. Runaway inflation has been eating into the profits of FMCG giants, leaving the of India’s largest consumer goods company HUL <a href="https://www.businessinsider.in/business/corporates/news/the-big-boss-of-indias-largest-consumer-company-is-worried-about-stagflation-and-unprecedented-inflation/articleshow/91251341.cms">worried</a> about something worse – stagflation. While inflation is a phenomenon in which prices of goods and services increase, stagflation takes inflation and combines it with slow economic growth and high unemployment. Picture high prices of everything and consider that your incomes fail to keep up with this – you are essentially making less money than before. <div type="Article" hostid="261" msid="91251341" title="The big boss of India's largest consumer company is worried about stagflation and unprecedented inflation" mstype="2" mssubtype="0"></div> <cmsannotation type="cmsannotation" annotationid="Packaged food companies like Nestle and Britannia get a respite" comment="subhead" text="Packaged food companies like Nestle and Britannia get a respite">Packaged food companies like Nestle and Britannia get a respite</cmsannotation> Analysts, though, have welcomed the government’s decision, saying it will bring a much-needed respite to packaged food companies like Nestle and Britannia. Wheat, sugar and palm oil account for 40-60% of the total cost of raw materials involved in making biscuits, noodles, bread, beverages, among others. “Packaged food companies were facing hyperinflation across the readymade basket as international prices for most of the raw materials were trending at all-time high post-Russia-Ukraine war and the imposition of the export ban on palm oil by the Indonesia government last month,” Naveen Kulkarni, the chief investment officer at Axis Securities told Business Insider. This, combined with Indonesia’s <a href="https://economictimes.indiatimes.com/news/international/world-news/indonesia-to-lift-palm-oil-export-ban-from-monday-president/articleshow/91663224.cms">decision</a> to lift the ban on palm oil exports is expected to provide immediate relief to Hindustan Unilever and Godrej Consumer, Kulkarni explained, stating that palm oil accounts for 20-25% of the raw material cost of these companies. <div type="Article" hostid="261" msid="90930779" title="Wholesale inflation in India is now near the same level as it was during the 1991 economic crisis" mstype="2" mssubtype="0"></div> However, it is worth noting that the decision to ban export of wheat is a pre-emptive measure, intended to prevent wheat prices in the country from rising. An unintended outcome of this could be a surge in the price of wheat alternatives like rice, said Sonal Varma, chief economist for India at Nomura. “The impact of the wheat export ban on India’s domestic food inflation is likely to be muted. However, with domestic wheat production likely limited by the heatwave, local wheat prices may not moderate materially,” she said. <div type="javascript" title="Custom" contenttype=""><cdata><![CDATA[]]></cdata></div> Consequently, this move could impact farmer revenues. “With domestic cereal price inflation still on the rise, the current export ban could also be long lasting, if global food prices remain elevated,” Varma further added. It seems that the government has heeded to warnings by the top bosses of India’s FMCG giants. Will it pay off or not is something that only time will tell. Until then, buckle up. SEE ALSO: <a href="https://www.businessinsider.in/finance/news/indias-central-bank-confirms-another-rate-hike-is-coming-in-june/articleshow/91739640.cms">India’s central bank confirms another rate hike is coming in June, but promises to soften the blow after the May shocker</a> <a href="https://www.businessinsider.in/stock-market/news/foreign-investors-have-pulled-out-more-money-this-year-than-they-brought-in-between-2009-2021/articleshow/91747269.cms">Foreign investors have pulled out more money this year than they brought in between 2009-2021</a> <a href="https://www.businessinsider.in/finance/news/modi-governments-itch-to-offload-40000-crore-hindustan-zinc-stake-hints-at-a-bigger-deficit-than-initially-anticipated/articleshow/91788910.cms">Modi government’s itch to offload ₹40,000 crore Hindustan Zinc stake hints at a bigger deficit than initially anticipated</a>

HUL, Britannia and ITC can now breathe easy say analysts – from inflation and even stagflation worries

At the vast open-plan headquarters of Indian telecoms start-up <keyword id="2003276" type="UNKNOWN" weightage="100" keywordseo="Jio">Jio</keyword>, billionaire oil tycoon <keyword id="3820" type="PERSON" weightage="100" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword> stands in short sleeves beneath a digital tracker that logs every new subscriber to his service. 
 The 59-year-old is India's richest man, and his <keyword id="10926" type="CITY" weightage="100" keywordseo="Reliance">Reliance</keyword> Industries oil &amp; gas group is the country's most profitable. 
 
Now, though, he's betting at least $20 billion on building, from scratch, a national digital empire stretching from phones and hardware to home entertainment and custom-made apps. 
 
The ambitious Jio project could make Reliance the most comprehensive provider of telecom and internet services across India - and give it unprecedented access to the country's untapped 'big data': how millions eat, shop and have fun. 
 
"For Reliance... data is the new oil, and intelligent data is the new petrol," Ambani said in March, explaining his drive to move closer to India's consumers. 
 
Reliance has said little publicly about Jio, and even less about the potential for wide-scale data mining in a country where consumers have not, to date, made a big deal about online privacy. But top executives are clear on the opportunity. 
 
"It's called Deep Packet Inspection, and what you can do with the analytics of that is mind-boggling," said a senior Reliance executive, referring to a practice that digs into 'packets' of data created by computers for efficiency, mining them for information. 
 
Jio is unlikely to contribute significantly to Reliance profits anytime soon, but is hugely significant for its future. Reliance has dabbled previously in consumer sectors, yet Jio is seen as an opportunity for Ambani to set a new course for a company still dominated by his late father, its founder. 
 
Jio is also a potentially landmark opportunity for India, where smartphone usage has ballooned and services like mobile payments and online entertainment have become commonplace. 
 
The prospect of Jio, which has not yet been commercially launched, has raised hopes of cheaper, more reliable data for Indian users. It has already drawn queues at some stores by offering free connections with unlimited data for a three-month period, allowing it to test its network. 
 
That has stirred rivals. India's largest wireless provider Bharti Airtel this week cut its 3G/4G data tariffs on prepaid connections by more than 40 percent, after halving them a month ago. 
 
ALL ABOUT AMBITION 
 
But Jio - named from a Hindi exhortation to 'live on' - is behind schedule and over budget, say several former employees, who, like current staff interviewed by Reuters, did not want to be named. It was initially expected to launch by end-2014, with total capital expenditure within $15 billion, they said. 
 
Reliance has never provided a specific date or figure, and declined to respond to specific queries for this article. 
 
According to filings at the Commerce Ministry, Jio has more than 325 billion rupees ($4.9 billion) of long-term debt, and other liabilities topping 580 billion rupees, as of March. In addition, Reliance has spent over 290 billion rupees on Jio and is expected to invest more - all adding up to more than what it has been spending on its core refining and petrochemicals business. 
 
Reliance says its oil business is pumping out cash, and any investment in Jio has to be ambitious. 
 
Two-thirds of India's 1.3 billion population are not online, and Jio hopes to capture 100 million users - nearly half of India's current smartphone users - within a year of launch. 
 
Ambani, who employees say taught himself to code, ran Reliance's nascent telecoms operations in the early 2000s, before a feud with his younger brother Anil triggered a split and a bitter non-compete deal. Mukesh took the family's energy business and Anil the communications assets, setting up Reliance Communications (RCom). 
 
Before long though, Mukesh was laying fibre cables again and set up a subsidiary, Rancore, to build its own mobile telephony technology. 
 
In 2010, Mukesh's Reliance Industries bought Infotel Broadband - on the day Infotel won nationwide spectrum - and decided it needed to offer more than a high-speed 4G network service. Instead, it would pitch an all-internet service, where even voice calls would be carried as data, cheaply, beating its rivals Airtel, Vodafone and Idea on quality and speed, according to Jio officials. 
 
Airtel, Vodafone and Idea declined to comment on Jio. 
 
Naveen Kulkarni, co-head of research at Phillip Capital, said the Jio technology was "very efficient from a cost point of view," but needs India's smartphone ecosystem to evolve, making it unlikely Reliance will make money from Jio for at least five years. 
 
RELIANCE CITY 
 
At Jio's biggest campus, a sprawling cluster of glass buildings, manicured lawns and giant Jio logos outside Mumbai, the scale of Ambani's vision is evident. Reuters was offered a rare opportunity to visit the site earlier this year. 
 
The campus has 15,000 employees working for Jio alone, plus hundreds of consultants and service providers working alongside the group. There are large guest houses and hotels. 
 
In a single hall, Reliance has put on show everything from its e-payment mechanism and music-streaming app to its messaging app, sleek Jio smartphones - sold at a fraction of the cost of an iPhone - connected cars, and even a replica home. 
 
"As they go out, they will have a very aggressive posture," said Rajan Mathews, director general of the Cellular Operators Association of India. 
 
On campus, Ambani, who flies in by helicopter once a week, was flanked at his desk by his eldest son, Akash, who is Jio's head of strategy, and by Manoj Modi, a long-serving adviser, and a reminder of the influence of trusted employees, most from the oil business. 
 
One company insider said the Jio logo is actually a mirror image of the word 'oil,' reflecting in a way Reliance's journey from oil drilling to data mining. 
 
($1 = 67.0605 Indian rupees) 
 
<a href="http://stz.india.com/sites/default/files/2016/05/16/1599-reliance-jio-ians.JPG">Image source</a>

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