Telangana treading cautiously on market borrowings; it raised ₹17,400 crore in first quarter
What are market borrowings?
Market borrowings by State Governments refer to the funds that State governments raise by selling securities, primarily State Development Loans (SDLs), to investors in the market. Securities are assurances given by State government.
The State government proposes to raise ₹4,500 crore in four tranches in July, participating in all but one auction of securities to be conducted by the Reserve Bank of India (RBI). It has raised ₹1,500 crore during the auction conducted on July 1 and plans to raise ₹3,000 crore in three instalments during the auctions to be held on July 15, 22 and 29.
Similarly, the government indicated that it would raise ₹3,500 crore in three auctions during August and balance ₹3,000 crore in three more auctions during September taking the total borrowings to ₹11,000 crore for the quarter, according to the provisional figures in the indicative calendar of borrowings released by the RBI for the second quarter.
Why are market borrowings raised?
This is a key method for States to finance their fiscal deficits and fund various developmental activities. State Development Loans are now categorised as State Government Securities.
A steep reduction in the borrowing limit by the Union Finance Ministry is said to be another reason for the State government to tread cautiously. The government had proposed to raise over ₹69,539 crore through borrowings, including open market borrowings of ₹64,539 crore during the current fiscal in the budget estimates. But the quantum had, however, been reduced steeply to ₹54,009 crore as could be seen from the provisional figures in the key indicators released by the Comptroller and Auditor General of India in the first two months forcing the Government to restructure its open market loans to meet the requirements.
What are consolidated sinking and guarantee redemption fund?
State governments have to deposit a certain amount with Reserve Bank of India under the consolidated sinking fund and guarantee redemption fund mandatorily. If a State government defaults on the loan payments, money is deducted from these funds.
Expenditure on interest payment in two months
While the cut in borrowing limit had come as a setback, the State Government is facing a tough task in the form of interest payments. The government had incurred ₹4,166 crore towards interest payment by May end, spending 21.51% of the ₹19,639 crore projected for the year in just two months.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)
Business Standard
16 minutes ago
- Business Standard
India's fintech sector ranks 3rd globally in H1 2025 funding round: Tracxn
India's financial technology sector has ranked third in startup funding in the first half of 2025, even as overall capital inflows moderated. According to Tracxn's Geo Semi-Annual India FinTech Report H1 2025, Indian FinTech startups raised $889 million between January and June, behind only the United States and the United Kingdom. At $889 million, the funding figure marks a 26 per cent decline from the $1.2 billion secured in the second half of 2024 and a 5 per cent dip compared to the same period last year. However, early-stage funding climbed 10 per cent from H2 2024 to reach $361 million and a 9 per cent increase compared to H1 last year. In contrast, seed-stage investments slumped to $91.2 million, down 27 per cent from the previous half-year period. 'While the Indian FinTech sector has seen a temporary dip in funding, the steady momentum in early-stage investments and growing acquisition activity indicate that investor interest remains strong, particularly in scalable, innovation-led models,' said Tracxn Co-founder Neha Singh. M&A activity grows, fintech adds one new unicorn India's fintech sector also witnessed more mergers and acquisitions (M&A) activity in the first half of the calendar year. The report recorded 16 M&A deals in H1 2025, up 45 per cent from the same period a year ago. Key transactions included Groww's $150 million acquisition of Fisdom and InCred Money's $35 million deal to buy Stocko. Despite the activity, no Fintech IPOs were recorded in H1 2025; however, one new unicorn did emerge during this period. One unicorn had emerged in H2 2024, while none had emerged in H1 2024. Bengaluru leads funding, Accel secures most deals Bengaluru remained the hub of FinTech innovation, drawing 55 per cent of the country's total funding, followed by Mumbai with 14 per cent. Peak XV, Angel List, and LetsVenture were among the most active investors overall. In early-stage rounds, Accel, Bessemer Venture Partners, and Peak XV led activity, while Blume Ventures, Venture Catalysts, and 100Unicorns dominated seed-stage funding. SoftBank Vision Fund, Lathe Investment, and Sofina topped the late-stage investment charts. US-based Accel led with 34 deals, while Blume Ventures expanded its domestic footprint with investments in seven new startups. RBI urges responsible fintech innovation In March, the Reserve Bank of India (RBI) called on fintech firms and digital payment companies to pursue 'responsible innovation' while conforming to regulatory standards. RBI Governor Sanjay Malhotra's meeting with leaders from the fintech and non-bank payments sector signalled a notable shift in tone, following a period of crackdowns on non-compliant firms under the former governor's tenure. In a sign of regulatory easing, the RBI also reversed some of its previous measures, such as lifting additional risk-weight requirements for bank loans to top-rated non-banking financial companies.
Mint
34 minutes ago
- Mint
Expert view: Indian stock market may hit a record high during the festive season; pharma can be a strong contra bet
Expert view: The Indian stock market may surpass previous highs in the second half of the year, especially during the festive season, says Ankit Patel, the co-founder at Arunasset Investment Services. Talking to Mint's Nishant Kumar, Patel says investors should be disciplined and focused during times of uncertainty. Further, he believes pharma can serve as a strong contra bet. In an interview with Mint, Patel shared his views on markets, sectors that can generate alpha and his expectations from Q1FY26 results. Here are edited excerpts of the interview: The first half of the calendar year 2025 (H1CY25) experienced a sluggish start due to delayed government spending, primarily caused by election-related activities in the early months. However, February marked a turning point when the Reserve Bank of India (RBI) adopted an accommodative stance—cutting interest rates, injecting liquidity, and relaxing banking regulations—which set the economy on a higher growth trajectory. Q4 FY25 GDP growth was strong at 7.4 per cent, reflecting economic resilience. Also, RBI's record dividend pay-out of ₹ 2.69 lakh crore for FY25—one of the highest in recent history—further bolstered fiscal stability and the overall economic environment. India's macro fundamentals remain robust, with inflation at 2.82 per cent and high forex reserves, making the markets attractive. FIIs have been net buyers for four consecutive months, bringing in roughly ₹ 23,000 crore. With consumption poised to lead in the second half (H2) and sectoral support, markets are expected to surpass last year's highs, especially during the festive season. Geopolitical tensions have indeed become the new normal for markets, creating high levels of global uncertainty. However, markets naturally experience headwinds and tailwinds, and uncertainty often opens doors for strategic investing. Historically, asset values tend to increase when markets stabilise following periods of volatility, turning uncertainty into potential opportunity. To protect and grow wealth during such times, investors must adhere to disciplined strategies and avoid emotional decision-making. Maintaining a long-term perspective and sticking to well-defined plans are key. In the Indian context, despite global geopolitical challenges, markets have delivered positive results due to strong macroeconomic fundamentals, controlled inflation, and supportive monetary policies. By staying focused and disciplined, investors can navigate these turbulent times effectively and turn uncertainty into opportunities for wealth preservation and growth. Merchandise exports to the USA account for roughly 1.2 per cent of India's GDP. Pharmaceuticals are the top (14 per cent) merchandise exports to the USA, and they are exempt from the Trump tariff. The other sectors, like gems and jewellery, diamonds, and petrochemicals, do not have much exposure to stock markets. Engineering goods and auto components could really impact the stock market. Together, they account for a large percentage of India's engineering exports to the US (valued at around $5 billion), which will be affected. The main impact will be the FDI flow, which will be affected due to policy uncertainty. This will affect the entire globe, not just India. Policy uncertainty is the worst thing for private investment. Hope is that consumption will offset this. Rate cuts and liquidity injections have happened and a very important factor here is that inflation is low. Although the RBI reduced its inflation forecast to 3.7 per cent from its earlier projected 4 per cent for FY25-26, it is very likely that inflation will average around 2.5 per cent for the next six months. Such low inflation creates real purchasing power, and this is a recipe that usually results in increased consumption. An effective investment strategy should be tailored to individual goals, risk appetite, and comfort level with various asset classes. The key lies in understanding market cycles and aligning them with personal requirements, enabling better timing and allocation. Diversification across asset classes such as equities, bonds, real estate, and gold helps spread risk and optimise returns. Importantly, investors should remain unaffected by outside noise and market volatility. Staying disciplined, sticking to a well-defined plan, and making rational decisions are crucial for long-term success. Emotions can often drive poor choices, so maintaining a balanced perspective and focus on fundamentals will help build wealth steadily. Ultimately, a disciplined, goal-based approach and proper diversification are the foundation of a resilient and successful investment journey. To achieve alpha beyond traditional investment methods, investors should explore alternative strategies that offer higher return potential. Using PMS with high-conviction stock picks, which are not strictly benchmark-driven, can deliver stronger growth by focusing on select stocks with long-term potential. Additionally, participating in private equity, pre-IPO investments, buybacks, mergers and acquisitions, and IPOs can significantly enhance wealth creation opportunities by tapping into early-stage growth and corporate restructuring. The performing credit space, especially through category AIF funds, has gained popularity among high-net-worth individuals (HNIs) for its ability to generate consistent double-digit returns over time. Moreover, investing abroad via funds available in GIFT City, which allows transactions in foreign currencies, helps diversify currency risk. These alternative strategies provide diversified, high-potential avenues for investors seeking superior wealth accumulation and portfolio resilience. Pharma can serve as a strong contra bet for stock market investing. Despite market volatility, the pharma sector remains resilient due to consistent domestic demand and exports. India's pharmaceutical exports reached $24 billion in FY23, growing at 15 per cent annually, driven by generic medicines and vaccines. Government initiatives like 'Pharma Vision 2020' and increased healthcare spending support the sector's long-term growth prospects. Moreover, pharma stocks often trade at lower valuations compared to other sectors. During market downturns, select pharma companies tend to outperform, offering stability and upside potential. This contrarian stance can help diversify risk and capitalise on the sector's growth amid broader market uncertainties. Based on Q4FY25, the BSE 500 cohort showed a 10 per cent PAT growth and revenue growth of around 7 per cent. We expect profit growth to be slightly higher in Q1FY26 due to mild input cost reduction, a favourable base, and a continued rural demand recovery supported by a timely monsoon. With inflation expected to average around 2.5 per cent over the next six months, real purchasing power will increase, boosting consumption, moderated by monetary easing policies. Improved credit growth could benefit banking and financial services, while low interest rates are likely to boost real estate activity. However, recent market movements have been highly correlated across sectors, mainly driven by India's macroeconomic stability. Going forward, we see a shift towards a stock-picker's market, emphasising the need for selective investing rather than outsized bets on specific sectors. Read all market-related news here Read more stories by Nishant Kumar Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
Time of India
2 hours ago
- Time of India
RBI waiting for gold prices to fall? Central bank keeps gold reserves constant; decision likely due to forecasts on yellow metal
RBI's gold holdings remain stable at 880 metric tonnes from end-March through end May this year. (AI image) The Reserve Bank of India (RBI) has maintained its current gold reserves without additions so far in FY26, potentially linking its acquisition strategy to anticipated downward price movements in this safe-haven commodity. Gold prices have risen 80% over five years due to global trade and political instability. According to recent data, the RBI's gold holdings remain stable at 880 metric tonnes from end-March through end May this year. This represents the most extended period without purchases in over a year. Previously, acquisitions were suspended during October-December 2023, with holdings remaining constant at 804 metric tonnes throughout that period, according to an ET report. Why Is RBI Not Adding to India's Gold Reserves Right Now? The central bank's current stance appears to be influenced by various market analyses. Price projections from Citi, a Fitch research division, Motilal Oswal Securities and ICICI Bank suggest a decline from $3,445 per troy ounce, citing potential reduction in global political tensions and anticipated interest rate reductions by the US Federal Reserve. Gold Holdings in Foreign Exchange Reserves Central bankers are increasingly favouring gold investments, according to a World Gold Council (WGC) survey conducted in mid-June. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Giao dịch CFD với công nghệ và tốc độ tốt hơn IC Markets Đăng ký Undo The study, which included responses from approximately half of all central banks, indicated that 95% of participants anticipate global sovereign reserve managers will expand their gold holdings over the next 12 months, an increase from 81% in the previous year. "Gold's performance during times of crisis, its use as an effective portfolio diversifier, and its role as a long-term store of value were the top three most relevant reasons for central banks to hold gold," the respondents to the WGC survey said according to the financial daily's report. Also Read | Gold a darling investment not just for Indian households! Why corporates are investing big in gold ETFs - explained The WGC's 'Trends in Reserve Management 2024' survey highlighted that reserve managers consider geopolitical escalation as their primary concern. The increasing number of geopolitical conflicts has brought attention to the vulnerability of reserves to sanctions, which can restrict access to and utilisation of foreign assets. In this context, reserve managers consider gold as their most secure investment alternative. "Reserve managers worldwide allocate their holdings into distinct categories, including a liquidity tranche for immediate requirements and an investment tranche aimed at generating enhanced returns," stated a research analysis in the central bank's most recent annual report. "Gold's property of being a safe-haven asset has led to significant gold purchases by central banks." According to RBI's latest annual report, gold's proportion within net foreign assets rose to 12% at end-March 2025, compared with 8.3% at end-March 2024. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
