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State Bank of India plans to borrow up to $1.25 billion, in what would be the largest dollar-denominated loan from the country’s financial sector this year, according to people familiar with the matter.

CTBC Bank, HSBC Holdings Plc and Taipei Fubon Bank are arranging the five-year loan, which carries an interest margin of 92.5 basis points over the risk-free Secured Overnight Financing Rate, said the people, who asked not to be identified discussing private matters.

India’s top lender is raising the facility for general corporate purposes through its branch at the Gujarat International Finance Tec-City, the country’s newest financial hub, the people said, adding that the deal is being syndicated to other financiers.

SBI didn’t respond to requests seeking comment.

State Bank joins several other local borrowers in raising foreign currency debt this year. Non-banking finance companies, or so-called shadow banks, in particular have increasingly tapped dollar-denominated facilities amid stricter regulations at home.

Cholamandalam Investment & Finance Co. is the latest Indian non-banking finance company to seek a $300 million syndicated term facility. Elsewhere, local financier Union Bank of India’s Sydney branch is marketing a A$125 million ($81 million) three-year loan, while Bank of Baroda is raising a $750 million borrowing.

Despite the flurry of activity, India’s dollar loan volume has shrunk 27% to $14.2 billion this year due to the absence of large company borrowings, according to data compiled by Bloomberg.

In July, State Bank raised a $750 million, three-year loan, data compiled by Bloomberg show.

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India’s wholesale price index (WPI)-based inflation for the month of October escalated to a four-month high of 2.36 per cent on an annual basis in comparison to 1.84 per cent in September, showed the provisional data released by the Ministry of Commerce & Industry on Thursday. In August, WPI inflation was at 1.31 per cent  and July inflation was at 2.04 per cent. “Inflation in October, 2024 is primarily due to increase in prices of food articles, manufacture of food products, other manufacturing, manufacture of machinery & equipment, manufacture of motor vehicles, trailers & semi-trailers, etc.,” the release said.

The month over month change in WPI for the month of October, 2024 stood at 0.97 per cent as compared to September, 2024. 

Per the release by the Ministry of Commerce & Industry, inflation for food articles went up to 13.54 per cent in October as compared to 11.53 per cent in September. The inflation rate for primary articles went up to 8.09 per cent in October from 6.59 per cent in September. The fuel and power inflation was at -5.79 in October as against -4.05 per cent in September. And manufactured products inflation came in at 1.50 per cent during the month under review. 

Under the food articles category, vegetable inflation was recorded at 63.04 per cent in October, recording a significant uptick from 48.73 per cent in September. Pulses inflation during the month of October was at 9.74 per cent, while the inflation for wheat stood at 8.04 per cent during the same month in comparison to 7.60 per cent in September. Cereals inflation was at 7.91 per cent. Eggs, Meat & Fish inflation came in at -0.52 per cent. Potato and onion reported inflation at 78.73 per cent and 39.25 per cent respectively. 

The non-food articles reported WPI inflation at -1.71 per cent in October as against -1.64 per cent during the previous month. Minerals inflation came in at 1.87 per cent in October, down from 3.03 per cent in September. The Crude Petroleum & Natural gas posted wholesale inflation at -12.16 per cent in October and crude petroleum was at -12.98 per cent.

Reacting on the same, Suman Chowdhury, Executive Director & Chief Economist, Acuité Ratings & Research, said, “India’s wholesale inflation continued to inch up gradually for the third consecutive month to 2.36 per cent in October, from 1.84 per cent in September. Expectedly, the Food Index is leading the charge with 11.59 per cent YoY growth, a figure consistent with the annualized growth in retail food inflation. This is despite a continuing contraction in fuel inflation (-5.79 per cent YoY) which mitigates the risks of a rise in logistics and power costs. Lower commodity prices also continue to support a relatively benign wholesale inflation environment.”  

“Given the arrival of the kharif crop and a favourable outlook on rabi sowing, food inflation is likely to trend its way down and along with soft commodity prices, should keep the WPI inflation print within 3.0 per cent in the current fiscal. However, we have revised our forecast for headline retail inflation to 4.8 per cent, given the stickiness in food inflation observed in Oct-Nov ’24. This not only is likely to lead to a postponement of a rate cut by RBI in Dec’24, but also creates uncertainty on the decision in Feb’25,” he added. 

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Niva Bupa Health Insurance shares made a decent debut on the bourses on Thursday, November 14 as they listed at ₹78.14 on NSE, a premium of 5.5 percent over the issue price of ₹74. Meanwhile, on BSE, it listed at ₹78.5, up 6.08 percent from IPO price.

Niva Bupa’s initial public offering (IPO), valued at ₹2,200 crore, was open for subscription from November 7 to November 11. The health insurance services provider’s shares were priced in the range of ₹70-74 per share for the issue.

Following the three days of bidding, Niva Bupa IPO closed with strong demand, garnering 1.9 times bids. The IPO received bids for 31.13 crore shares against 16.3 crore shares on offer. The retail investor segment was booked 2.88 times, while the non-institutional investors (NII) category wasn’t fully subscribed and was bid 0.71 times. The qualified institutional buyers (QIB) portion was subscribed 2.17 times.

Niva Bupa IPO was a combination of fresh issue of 10.81 crore shares aggregating to ₹800.00 crore and offer for sale of 18.92 crore shares aggregating to ₹1,400.00 crore. The company raised ₹990 crore from anchor investors on November 6, 2024.

Retail investors could apply with a minimum lot size of 200 shares, requiring a minimum investment of ₹14,800. The company plans to use the net proceeds to bolster its capital base, aiming to enhance its solvency levels, as well as for general corporate purposes.

Of the net offer, 30 percent is reserved for qualified institutional bidders (QIBs). Non-institutional investors (NIIs) and retail investors will have allocations of 10 percent and 10 percent of the net offer, respectively.

ICICI Securities Limited, Morgan Stanley India Company Pvt Ltd, Kotak Mahindra Capital Company Limited, Axis Capital Limited, Hdfc Bank Limited and Motilal Oswal Investment Advisors Limited were the book running lead managers of the Niva Bupa Health Insurance IPO, while Kfin Technologies Limited was the registrar for the issue.

Most brokerages have suggested subscribing to the Niva Bupa IPO, with various perspectives on investment horizons.

Anand Rathi has advised investors to subscribe to the IPO with a long-term outlook, highlighting the company’s ambition to create a robust, customer-centric health insurance platform enriched with wellness programs, doctor consultations, diagnostics, and medicine delivery services. The analysts noted that Niva Bupa plans to further expand its health insurance ecosystem by developing health assessment tools, wellness content, and partnerships for digital consultations and home delivery of medications. At the upper price band, the company’s valuation stands at a P/BV of 6.1x, translating to a market capitalization of ₹13,520 crore post-issue. Despite the valuation appearing fully priced, Anand Rathi maintained a ‘Subscribe – Long Term’ recommendation.

Meanwhile, Swastika Investmart expressed a more cautious stance, recommending the IPO primarily for high-risk investors. While acknowledging Niva Bupa’s leadership and rapid growth in the Indian health insurance market, Swastika highlighted that the company’s profitability was positive in FY23 but noted a return to negative earnings in the first quarter of the current fiscal year. The brokerage firm pointed out that the IPO pricing seemed aggressive, warranting a more careful approach for potential investors.

Established in 2008, Niva Bupa Health Insurance Company Limited is a joint venture between the Bupa Group and Fettle Tone LLP, specializing in health insurance. The company delivers an all-encompassing approach, enabling customers to access a broad health ecosystem and service capabilities via its Niva Bupa Health mobile app and website. Between the financial years ending March 31, 2023, and March 31, 2024, the company experienced a 44.05% rise in revenue, alongside a significant 552.73% increase in profit after tax (PAT).

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India’s merchandise trade deficit reached $27.14 billion in October, widening from $20.8 billion in September but narrowing compared to $30.43 billion in the same month last year, according to data from the commerce ministry.

Import growth continued to outpace exports on both monthly and yearly bases.

Merchandise exports rose 13.4% sequentially, reaching $39.2 billion in October, compared to $34.58 billion in September, and showed a year-on-year increase from $33.43 billion.

Meanwhile, imports surged nearly 20% from the previous month to $66.34 billion, up from $55.36 billion in September and a slight rise from $63.86 billion year-on-year.

Commerce Secretary Sunil Barthwal commented, “Despite the volatile global atmosphere, Indian exporters have been able to overcome that situation and deliver.”

Services trade also saw increases with services exports estimated at $34.02 billion in October, with imports at $17 billion, compared to $30.61 billion in exports and $16.32 billion in imports in September.

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Retail inflation rate surged to a 14-month high of 6.21 per cent in October with a sharp rise in prices of food items, especially fruits, vegetables, meat and fish, and oils and fats, data released by the National Statistical Office (NSO) on Tuesday showed. Food inflation, based on Combined Food Price Index (CFPI) shot up to a double-digit level of 10.87 per cent in October — a 15-month high — from 9.24 per cent in September and 6.61 per cent in the year-ago period.

Food inflation has risen to double digits after a gap of 14 months for the first time since July 2023, the NSO statement showed, which was released at 4 pm for the first time after the advancement of the data releases from 5:30 pm. With the October print, the headline retail inflation rate, based on Consumer Price Index (Combined), has again breached the 4 per cent mark in the 4+/- 2 per cent band of RBI’s medium-term inflation target for the second consecutive month. With this surge in inflation, as was also flagged by the Reserve Bank of India Governor Shaktikanta Das last week, hopes of an immediate rate cut by the central bank in its upcoming monetary policy meeting in December have been dashed.

Food and beverages, which accounts for 45.86 per cent of the total weight of Consumer Price Index (Combined), registered an inflation rate of 9.69 per cent in October as against 8.36 per cent in September. Inflation rate for perishables such as vegetables increased to 42.18 per cent in October from 35.99 per cent in September, while that for fruits rose to 8.43 per cent from 7.65 per cent.

Inflation rates also inched higher for cereals to 6.94 per cent in October from 6.84 per cent in September and for meat and fish to 3.17 per cent from 2.66 per cent. There was a sharp increase in the inflation rate for oils and fats to 9.51 per cent in October from 2.47 per cent in September, indicating the rise in global edible oil prices and the impact of imported inflation. Inflation rate for housing also increased marginally to 2.81 per cent in October from 2.78 per cent in September.

“High food inflation led by strong momentum in prices of vegetable and edible oil remains a cause of concern. The surge in vegetable prices, particularly tomatoes and onions, can be attributed to unseasonal rains and extended monsoons in certain parts of the country. The rise in global edible oil prices and the recent hike in the basic customs duty of various edible oils have resulted in higher inflation in the basket, given their import dependence. It is crucial to manage food inflation, as it directly impacts household inflation expectations. This situation also underscores the need for the government to implement additional supply-side measures to stabilise food prices,” Rajani Sinha, Chief Economist, CareEdge Ratings said.

Services inflation, as captured by the miscellaneous category showed an increase to 4.32 per cent in October from 4.05 per cent in September, with the personal care and effects segment registering an inflation rate of 10.99 per cent in October as against 9 per cent in the previous month.

Region-wise split for inflation data showed that rural inflation rose to 6.68 per cent in October from 5.87 per cent in September, while urban inflation increased to 5.62 per cent from 5.05 per cent. On the food inflation front, rural areas recorded a food inflation rate of 10.69 per cent in October as against 9.08 per cent in September, while urban areas recorded a higher food inflation rate of 11.09 per cent in October compared with 9.56 per cent in the previous month.

Last week, RBI Governor Das had said that the CPI-linked inflation rate is likely to escalate further in October. The Governor had also stated that the change in monetary policy stance in the October policy to ‘neutral’ from ‘withdrawal of accommodation’ should not be interpreted as a cut in the repo rate in the next policy, dampening hopes of the much-awaited reduction in the key policy rate. “We have to be very cautious in our future course of action. A change in stance doesn’t mean that the next step (by the RBI) is a rate cut in the very next meeting. It’s not so,” Das said. The repo rate has been kept unchanged for 20 consecutive months and stands at 6.5 per cent at present.

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