RBI New Gold Loan Rules Explained | LTV 85% on Gold

Brief Summary

This YouTube video provides a comprehensive market analysis and discusses various news updates related to Indian stocks and the global economy. It covers topics such as the impact of US economic policies on Indian markets, potential inflows from Foreign Institutional Investors (FIIs), and specific stock recommendations. Additionally, it examines the competitive landscape in the food delivery sector with Rapido's entry, updates on IEX, changes in gold loan rules, and various stock-specific news including Asian Paints, Suzlon, and Bajaj Finance.

Market trends and potential FII inflows
Rapido's entry into the food delivery market and its impact on Swiggy and Zomato
Updates on IEX and its new electricity derivatives
Changes in gold loan rules and their implications
Stock-specific news and recommendations

Market Analysis

The Indian stock market closed positively with Sensex gaining 256 points and Nifty gaining 100 points. The market opened with a gap up, but consolidated throughout the day. The previous week's gains were primarily due to the RBI's rate cut of 50 basis points and a reduction in the cash reserve ratio (CRR) by 100 basis points, releasing approximately ₹2,50,000 crore into the market, benefiting banking and financial institutions. The focus is on US exceptionalism and its potential impact on global markets. If US economic policies falter, funds could return to India, which has relatively stable macroeconomic data. The RBI's measures are seen as supportive of economic growth, making India an attractive destination for foreign institutional investors (FIIs). The current market is considered attractive, but investors should maintain a cash reserve of 20% to capitalize on potential market dips. The long-term outlook for the Indian market remains positive.

Swiggy & Zomato

Rapido is entering the food delivery segment with a pilot project in Bengaluru, challenging Swiggy and Zomato. Rapido proposes a fixed fee model, charging ₹25 for orders under ₹400 and ₹50 for orders above that amount, which translates to a commission of approximately 6% to 15%. This is significantly lower than the 15% to 30% commission charged by Swiggy and Zomato. Rapido's model also aims to keep restaurant prices low, attracting more customers. The entry of Rapido could disrupt the market share of Swiggy and Zomato, especially as they focus on quick commerce. This increased competition may lead to cash burning and impact margins for all players.

IEX Don't Miss

IEX (Indian Energy Exchange) is entering a significant global business, with NSE (National Stock Exchange) also expected to participate. MCX (Multi Commodity Exchange) has received SEBI approval to launch electricity derivatives, including futures and options. The spot price for these derivatives will be based on power trading prices in IEX. Globally, there is a strong market for power-related derivatives, which can be used for hedging and trading purposes. IA (Indian Energy Exchange) benefits by sharing data with MCX, receiving 10% of the transaction fee. NSE may also reach an agreement with IA, potentially increasing IA's business. IA is also planning to start businesses related to the Indian Gas Exchange, International Carbon Exchange, and Coal Exchange, though the focus remains on electricity.

Gold Loan Rules

The RBI has updated the loan-to-value (LTV) rules for gold loans, increasing it to 85% for loans up to ₹2,50,000. This means that for gold worth ₹2,50,000, a loan of ₹2,12,000 can be obtained. For loans between ₹2,50,000 and ₹5 lakh, the LTV is 80%, and for loans above ₹5 lakh, it is 75%. The LTV must be maintained throughout the loan tenure, and customers should be informed of any changes. The RBI has also provided relaxations for small gold deposits. This is a positive development for NBFCs that lend against gold, with Muthoot Finance expected to benefit the most.

Asian Paints

Birla has filed a case against Asian Paints with the Competition Commission of India (CCI). Birla alleges that Asian Paints is using its market dominance to prevent dealers from selling Birla Opus paints. Asian Paints is accused of threatening dealers with dealership cuts, margin reductions, and blacklisting if they sell Birla's products. Birla claims that Asian Paints is trying to maintain a monopoly and eliminate competition. This is not the first time Asian Paints has faced such allegations, with several paint companies from the south having filed similar complaints in the past.

Suzlon

The Tanti family, promoters of Suzlon, sold nearly 20 crore shares in a block deal, raising approximately ₹1300 crore. Despite this sale, the stock did not fall significantly, likely due to the company's recent strong performance. The sale occurred at 9 am, with 20 crore shares traded in the block window. The reasons for the sale and the identity of the buyers are important factors. The promoters may be selling to add more institutional investors. Details of the buyers will be shared in the next video, based on NSC block deal data.

Chemical stock

The Government of India has imposed anti-dumping duties on imports of insoluble sulfur from China and Japan, as well as on vitamin A palmitate products from China, Switzerland, and the European Union for five years. OCL Limited, which manufactures and sells insoluble sulfur products, is likely to benefit from this. Perumal Pharma may also see advantages in terms of vitamin A palmitate.

Defence Stocks

DRDO (Defence Research and Development Organisation) is transferring new defense technologies to various companies, including BEL, Bharat Forge, Tata, and Das Hith Limited. These companies manufacture equipment for the Indian Army. Recent events have highlighted India's defense capabilities, creating a mega opportunity in the defense sector. However, defense stocks have already seen significant gains, so investors should consider value before investing.

Bajaj Finance

Bajaj Finance has set June 16th as the record date for its stock split (1:2) and bonus shares (4:1). This means that one stock will eventually become 10 stocks. For example, a stock priced at ₹9000 will appear as ₹900 after the split. Investors who hold the stock until June 16 will receive the split and bonus shares.

25% Hike

IRDAI is planning to increase the price of motor third-party insurance by 18% to 25%. This could benefit general insurance companies such as Go Digit and ICICI Lombard. The last hike occurred six years ago. This increase will provide general insurance companies with the opportunity to improve their combined ratios and outlook.

Aurion Pro

Aurion Pro has signed an iCash Pro deal worth $2.5-5 million with Sri Lankan bank clients. This is their second major deal with a Sri Lankan bank. The iCash Pro platform is an AI-powered banking system for cash management and transaction banking.

Glenmark Pharma

Glenmark Pharma is launching Janu Brutenibrillated in India, a drug used to treat five blood cancers, including chronic lymphocytic leukemia. They have received approval from the Drug Controller General of India (DGI).

MTAR Technologies

MTAR Technologies has received an order worth ₹19 crore 20 lakhs from Clean Energy and Aerospace. The major client is Bloom Energy. ₹17 crore 80 lakh of the orders are for clean energy, and ₹1 crore 40 lakh are for aerospace.

Kalpataru Projects

Kalpataru Projects is reporting strong growth in its power transmission and distribution space, with new orders worth ₹3,789 crore.

HDFC Bank

Serious allegations of fraud and financial misconduct have been made against Shashidhar Jagadeeshan, the MD and CEO of HDFC Bank, by the trust that manages Lilavati Hospital in Mumbai. HDFC Bank is registering an FIR against the Mehta family trust and the Lilavati Kirtilal Medical Trust, claiming these statements are being made to avoid paying ₹65 crore 22 lakhs they owe. HDFC Bank states they are taking legal action and that the allegations are retaliatory.

Infosys

The GST department has closed the proceedings related to an IGST invoice of ₹32,403 crore for Infosys. This is positive news for the company.

Shilchar Technologies Ltd

Shilchar Technologies Ltd has approved a bonus share issue in a 1:2 ratio, with the record date set for June 6th. This means that for every two shares held, the company will give one free share.