“With an emphasis on inflation target of 4% and withdrawal of accommodation, RBI has kept a non-committal stance on such pauses in the forthcoming meeting. With lagged impact of cumulative 250 bps hike on inflation and persisting global financial uncertainties, repo rate is expected to remain at the current levels going forward as well.”

“There have been increasing concerns that rapid rate hikes by central banks have been a major driver for recent failures in small banks of the US and EU. Thus, RBI will have to balance its commitment towards taming inflation while ensuring that India’s financial system is not exposed to extraordinary shocks. The expectation around Fed revisiting its aggressive stance on inflation will also be a consideration for RBI.”

“In the next 12-18 months, companies will increasingly look at achieving profitability, unlike the earlier strategy of capturing market share at all costs.”

“This is a huge market play with only currently 4-5 large players leading the space. Given there is enough growth opportunity, the outlook for the industry looks better with potential consolidation opportunities.”

“The budget reiterates the government’s vision for long term economic growth through increased capital expenditure and enhanced consumption. Growth in capital expenditure while maintaining fiscal consolidation will have a cascading impact on the economy in terms of strong corporate earnings, growth stimulus to all core sectors and employment generation. The focus on infrastructure development will eventually increase private investments into roads, power, urban infrastructure, etc. In addition, the budget has proposed effective measures to boost the entrepreneurship and start-up ecosystem which is currently growing though a subdued fund-raising phase”.

Startup Investment Through Convertible Notes Has Waned

“Indian markets continue to trade at a premium when compared to the emerging market peers, while private market and technology stocks witnessed a significant correction”.

“Most of the new-age companies have not been able to generate returns for capital market investors because of high valuations, prevailing geo-political conditions, liquidity tightening, and the not-so-clear path to profitability”.

“Fed has already communicated last week that it would now follow a balanced approach between containing inflation and fostering growth. This is an indication that we might be nearing the rate hike cycle. With RBI also now choosing to moderate the rate hike from 50 bps to 35 bps, it is a clear signal that India’s central bank is aligned to its global counterparts. This gives India Inc and its capital markets a strong foundation to plan the capex cycle which is critical for ushering into the next phase of growth”.