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Devsar Madhya Pradesh Assembly Constituency Election 2023: Date of Result, Voting, Counting; Candidates

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Devsar MP Assembly Election 2023 Details: The election for Devsar Assembly Constituency in Madhya Pradesh will be held on November 17 this year. The final date of voting and result were known after the formal announcement by the Election Commission of India. Here are the important details of the Devsar Constituency Assembly Election 2023 that you should know.

Devsar Constituency Madhya Pradesh Assembly Election 2023: Voting Date

November 17 is the date of voting for the Devsar Assembly Constituency Election 2023 as announced by the Election Commission of India.

Devsar Constituency Madhya Pradesh Election 2023: Candidates List

Bharatiya Janta Party (BJP), Congress and other political parties in the state will announce their candidates for the Devsar Assembly Constituency Election 2023 after the announcement of voting dates by the Election Commission of India.

Why Devsar Constituency Assembly Election 2023 is Important

Devsar is a state Assembly/Vidhan Sabha constituency in the state of Madhya Pradesh and is part of the Devsar Lok Sabha/Parliamentary constituency. Devsar falls in the Devsar district of Madhya Pradesh and is categorised as an urban seat.

Devsar Constituency MP Election Result: What happened in 2018

Subhash Ram Charitra of the Bharatiya Janata Party was the winning candidate from the Devsar constituency in the MP Assembly elections 2018, securing 63295 votes while 52617 votes were polled in favour of Banshmani Prasad Verma of the Indian National Congress. The margin of victory was 10678 votes.

2018 Devsar Assembly Constituency Election Result

Winning Candidate NameParty NameTotal VotesSubhash Ram CharitraBharatiya Janata Party63295

Candidate List Party Name Votes Gained (Vote %) Subhash Ram Charitra Bharatiya Janata Party 63295 (37.77%) Banshmani Prasad Verma Indian National Congress 52617 (31.4%) Surendra Prajapati Gondvana Gantantra Party 18320 (10.93%) Shiv Shankar Prasad Bahujan Samaj Party 14464 (8.63%) None Of The Above None Of The Above 5307 (3.17%) Shiv Kali Saket Communist Party Of India 2913 (1.74%) Subhash Chandra Verma Aam Aadmi Party 2585 (1.54%) Ad Shyamlal Saket Bhartiya Shakti Chetna Party 2134 (1.27%) Janardan Prasad Prajapti Peoples Party Of India (democratic) 2108 (1.26%) Ramkripal Basor Republican Party Of India (a) 1603 (0.96%) Nirmala Dr H L Prajapati Saman Aadmi Saman Party 1303 (0.78%) Bhuwal Saket S/o Harbhukhan Shiv Sena 947 (0.57%)

Devsar Constituency MP Election Result: What happened in 2013

Rajendra Meshram of the Bharatiya Janata Party was the winning candidate from the Devsar constituency in the MP Assembly elections 2013, securing 64217 votes while 31003 votes were polled in favour of Banshmani Prasad Verma of the Independent. The margin of victory was 33214 votes.

2013 Devsar Assembly Constituency Election Result

Winning Candidate NameParty NameTotal VotesRajendra MeshramBharatiya Janata Party64217

Candidate List Party Name Votes Gained (Vote %) Rajendra Meshram Bharatiya Janata Party 64217 (45.16%) Banshmani Prasad Verma Independent 31003 (21.8%) Ramanuj Saket Bahujan Samaj Party 16719 (11.76%) Surendra Prajapati Gondvana Gantantra Party 13935 (9.8%) None Of The Above None Of The Above 4693 (3.3%) Babulal Basor Bhartiya Shakti Chetna Party 2696 (1.9%) Rasile Independent 1756 (1.23%) Subhash Chandra Independent 1610 (1.13%) Rammilan Prajapati Samajwadi Party 1432 (1.01%) Sunita Independent 1351 (0.95%) Babuaram Urf Balramdas Independent 1337 (0.94%) Jagdev Saket Independent 782 (0.55%) Angad Prasad Independent 677 (0.48%)

Devsar Constituency MP Election Result: What happened in 2008

Ramcharitra S/o Rampyare of the BJP was the winning candidate from the Devsar constituency in the MP Assembly elections 2008, securing 54404 votes while 19881 votes were polled in favour of Banshmani Prasad Verma of the INC. The margin of victory was 34523 votes.

2008 Devsar Assembly Constituency Election Result

Winning Candidate NameParty NameTotal VotesRamcharitra S/o RampyareBJP54404

Candidate List Party Name Votes Gained (Vote %) Ramcharitra S/o Rampyare BJP 54404 (54.09%) Banshmani Prasad Verma INC 19881 (19.77%) Vimla Bagri Dheerendra Singh (dheeru) GGP 9056 (9%) Shankhlal Saket BSP 4913 (4.88%) Ramanuj Saket IND 4586 (4.56%) Rambharosh Prajapati SP 2519 (2.5%) Chhotelal Prajapati IND 1812 (1.8%) Heeralal Saket BJSH 1522 (1.51%) Babulal Prajapati GMS 1177 (1.17%) Dhanukdhari Saket SVSP 715 (0.71%)

Why, When, Where, How of IPOs: How companies raise money from share markets

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By Sandip Khetan

Indian stock markets and many around the world are touching historic highs. Boardrooms of unlisted companies are discussing ways and means to assess the timing of their Initial Public Offers (IPOs). An IPO is a landmark event in the life of any company. Every promoter dreams to make the company public.

Why IPO?

Management needs to consider several matters before rolling out an IPO. These include:

Investors are keen on investing in companies which operate in a high growth area or have been able to demonstrate with their business model the ability to operate in an environment which offers sustainable growth over a longer term. So, companies need to be very comfortable in addressing the ‘why’ of an IPO with a compelling equity strategy in their business, including considerations of other sources of capital.

Many companies with strong business models and ability to generate and source growth capital wish to take out an IPO to create shares as a currency for future mergers and acquisitions. This helps them provide a way to monetize their existing stock options as offered to employees and key management personnel, create a better brand in the marketplace to attract customers and better talent, and expand in different geographies.

When to do an IPO?

The question that often arises with regards to an IPO pertains to its timing. It is never an easy answer as markets are often volatile. Hence, it is important for a company to look at its business model and spend time to prepare for listing at a short notice. Some of the key factors which contribute towards deciding the timing of an IPO are listed below:

When the management can demonstrate significant visibility in terms of its business model and positive cash flows or very strong growth in near- to medium-term, it adds to a company’s compelling equity strategy. Investors often like to invest in growth businesses so that they can reap higher returns as compared to matured businesses that are already listed and are available for investments.

Which sector is the company operating in and what is the flavor of the market at a particular point in time. For example, currently businesses in pharma, technology, fintech and renewable energy are high in terms of investors focus and companies operating in these sectors should look at mining investors interest sooner than later.

Where to list?

It is important to consider the regulatory environment of the company, its long term-strategies and its outlook before deciding the markets to list. Some of the key matters that can help in decision-making are:

Tax and valuation considerations: This can often determine the markets in which companies eventually list their shares. Companies which are incorporated in India, look at India as the obvious choice to raise capital. Indian capital markets offer significant amount of depth and several companies have raised billions of dollars successfully.

Purpose of the roll-out: Some of the companies in renewable, media, technology, ecommerce and fintech sectors are actively looking at raising capital overseas. Valuation considerations and profiles of existing investors influence these companies’ decision-making skills.

Meeting requirements of the market that company’s plans to list an IPO: To determine which stock exchange to list is a key decision that companies need to take early in the journey of the IPO process as every destination requires (though overlapping on many fronts) different things. Companies may miss the opportunity to time the market, if they are not clear on the exchange they want to eventually list.

How to list?

Once a company has crossed the hurdle of decision-making around the purpose, timing as well as exchange on which they want to potentially list, the bulk of the work starts in terms of the preparation towards the listing. Some of the key factors which the company needs to keep in mind are outlined below:

The company needs to reassess existing governance framework to ensure that it is in line with regulatory requirements. It essentially involves inducting independent directors on the board, setting up committees (e.g., audit committee, risk management committee and nomination committee) and also putting together the framework to ensure integrity in the whole process of decision-making and external reporting.

The company is required to dedicate a significant amount of time to consolidate financial statements in the form and shape as required for a listed company. It also needs to assess this based on the market in which it wishes to list its IPO. It is also essential for the company to reassess its historical financial statements and reports issued by its auditors.

A significant amount of time and effort may be required to align reporting and legal entity structure. This may involve a legal process or externalization of the holding company. Thus, the company needs to plan this appropriately and may require to incur significant costs to achieve the optimal legal structure for eventual listing.

Overall, an IPO is one of the most exciting milestones in the lifetime of a company. It requires a significant amount of time and bandwidth from the management’s end. It is almost an irreversible decision; hence, it is important for management and company’s board to evaluate all options and consult appropriately while planning this journey.

(Sandip Khetan is Partner and National Leader, Financial Accounting Advisory Services at EY India. The views expressed are his own.)

Suzlon to raise Rs 1,200 cr via rights issue

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Wind energy player Suzlon said on Sunday it was offering existing investors in the company five shares for 21 fully paid-up shares in bid to raise Rs 1,200 crore via a rights issue.

The decision was taken at a board meeting, the company said in a release to the exchanges.

Also Read: Accenture: Revenue rises 15% in fourth quarter

Suzlon’s shareholder funds were a negative Rs 653 crore in June, 2022, as per an investor presentation. In March, 2022, the shareholder funds were a negative Rs 3,562 crore, an audited number.

Suzlon reported a net loss of Rs 176.55 crore in FY22.

The company reported revenues of Rs 1,378 crore in Q1 FY23, a year-on-year (y-o-y) growth of 21%.

It recorded an exceptional gain of Rs 2,469 crore. The profit before tax (PBT) before exceptions was Rs 7 crore.

The Earnings before interest, taxes, depreciation, and amortisation (Ebitda) margin was 15.6%, leading to an Ebitda of `214 crore, up 39% y-o-y.

Harsha Engineers IPO share allotment: Check grey market premium, status via BSE, registrar; listing on 26 Sep

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Harsha Engineers International’s Rs 755-crore IPO, which got subscribed 71.32 times on the final day of bidding, is likely to finalise the basis of allotment on Wednesday, 22 September. The portion reserved for qualified institutional buyers was subscribed 178.26 times and that for non-institutional investors was subscribed 71.32 times. The retail investors portion was subscribed 17.63 times. The IPO shares were sold at a price band of Rs 314-330 per share. The equity shares are expected to list on BSE and NSE on 26 September 2022. The initiation of refunds or unblocking of funds from ASBA account will take place on 22 September, and the equity shares will get credited to allottees demat account on 23 September 2022.

In the grey market, Harsha Engineers International IPO shares were commanding a premium in the range of Rs 220-240 premium against the IPO price of Rs 330 apiece, according to the people who deal in unlisted shares of the companies. The IPO investors can check the IPO allotment status via BSE and the registrar’s websites. The registrar of the issue is Link Intime India Private Ltd, a SEBI-registered entity, responsible for the IPO allotment and refund processing.

Check Harsha Engineers International share allotment status via registrar Link Intime India website

To check the share allotment status, select the company name as ‘Harsha Engineers International — IPO’ from the drop-down list on the Link Intime India website when it gets declared. Check box either PAN, Application Number or Depository/Client ID. Accordingly, enter the permanent account number or Application Number or Depository/Client ID in the box. Enter the given captcha in the provided space and click the submit button. This will display the number of shares that have been applied and allotted to the investor.

Also Read: Indian economy to grow at 6.8% this fiscal, CAD may widen to 5.5% of GDP in Q2 FY23

Check share allotment status in Harsha Engineers International via BSE website

Another way to check the allotment status in Harsha Engineers International is through the BSE website. Select ‘equity’ as the issue type, and ‘Harsha Engineers International’ as the issue name from the drop-down list, when it gets declared. Enter the application number and PAN (permanent account number). Click on ‘I am not a Robot’. In the last step, click on the search tab to view the status details.

NMDC Rating: ADD | Post rise in export duty to 50%; NMDC cuts iron ore prices

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NMDC has cut iron ore prices, too aggressively, ~40% in the past three months post increase in export duty, to export parity level. We believe domestic prices have bottomed out and should recover with demand from 2HFY23E. We see limited downside to seaborne prices as well, despite weak demand in China, due to cost support. The steel plant demerger and listing are likely to conclude in Q3FY23E and should unlock some value. We raise earnings and Fair Value to Rs 140 factoring recovery in prices and higher value to steel plant. Upgrade to ADD.

Domestic prices are trading at export parityNMDC has cut iron ore prices by 40% in 1HFY23 mainly led by increase in export duty to 50% from 30% in May 2022. NMDC’s fine prices are now at 34% discount to import parity versus historic average of 20% and close to export parity prices. We believe iron ore prices have bottomed out and have upside risk led by (i) recovery in domestic demand allowing miners to raise prices to a premium to export parity, (ii) upside in seaborne iron ore prices and (iii) potential rollback of increase in export duty to 50% (from 30%).

Steel plant demergerNMDC’s 3 mtpa steel plant is gradually progressing towards commissioning with coke pushing expected to complete in September 2022. We expect liquid steel production in December 2022 and plant commissioning in Q4FY23E. For the demerger, the Ministry of Corporate Affairs (MCA) hearing is concluded and approval is expected soon. We expect the demerger and separate listing to conclude by the end of CY2022. We increase the value of the steel plant to Rs 35/share (0.5X book) from Rs 25/share (0.35X book) in our SoTP, factoring the recent progress.

Seaborne prices to see cost supportSeaborne iron ore prices have been range-bound, $95-110/ton, in the past two months after a 30% correction in Q1FY23. We estimate that the current 90th percentile cost is ~$90/ton as the cost curve has got elevated due to high labour costs in Australia, export duty in India and higher energy prices globally.

Increase earnings and Fair Value to Rs 140/share (from Rs 115)We have increased NMDC’s EPS to Rs 17.1/14.9/12.3 factoring ~5% premium to export parity and reduced capex from FY2024-25e assuming deconsolidation of steel plant. Rollback of the recent increase in export duty on iron ore would add further upside to our earnings and Fair Value. The stock trades at attractive 3.8X EV/Ebitda or 6.2X PER on FY2024E ex-steel plant; we upgrade our rating to ADD.

Tata Steel Rating: Hold| Mega merger to bring in material benefits

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By Edelweiss research

We perceive the Tata Steel (TSL) board approving the amalgamation of seven subsidiaries with the parent as a prudent step. Key points: (i) Lower iron ore cost for subsidiaries such as TSLP and Tata Metaliks. (ii) Iron ore assets of the group are likely to be balanced through the lease life. (iii) Potential synergies across sales, marketing, procurement and logistics likely to accrue over medium to long term. For the TSL stock, we see the near-term benefits of cost/operating synergies being offset by potential dilution; however, the stock prices of subsidiaries are likely to recalibrate to the ones implied by the swap ratio. Maintain ‘HOLD’ on TSL with an unchanged TP of Rs 98.5/share on 5x Q2FY24e Ebitda.

Also Read: FPIs pump in Rs 8,600-cr in Sep; pace of investment slows

Streamlines product portfolioWe see the group’s long products’ strategy getting a firm direction as there could be sharper management oversight on expansion plan/integration of NINL. Besides, TSL’s existing long portfolio is likely dovetail with the proposed expansion, resulting in optimisation of product offerings. In our view, the amalgamated subsidiaries are also likely to benefit from TSL’s existing client base. On the procurement front, common sourcing of key raw materials such as iron ore and limestone would also reduce cost.

Outlook: Benefits to be realised over time; maintain ‘HOLD’ We perceive the proposed amalgamation scheme in line with management’s strategic intent of simplifying the structure and unlocking value. In our view, the benefits of lower iron ore royalty cost are likely to be immediate, but the more strategic ones such as portfolio optimisation, sharpened focus on long products and cross-functional benefits are likely to accrue over a period of time. In terms of the stock reaction, for Tata Steel, we see the benefits of incremental Ebitda from subsidiaries to be offset by dilution in shareholding. The stock prices of listed subsidiaries are however, likely to recalibrate to the one suggested by the swap ratio. We maintain ‘HOLD’ on TSL with an unchanged target price of Rs 98.5 on 5x Q2FY24e Ebitda. Other listed subsidiaries of TSL are not rated.

Union Budget 2021: Select sectors to drive earnings; buy these stocks ahead of Budget

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Indian share markets are witnessing volatility ahead of Union Budget 2021. BSE Sensex and NSE Nifty 50 rose to record highs of 50,184 and 14,753 points, respectively, last week. Since then Sensex has tumbled 1,290 points or 2.56 per cent, while the NSE’s Nifty 50 index lost 382 points. BSE market-capitalisation has also fallen to Rs 195 lakh crore from an all-time high of Rs 199 lakh crore hit yesterday. Vinit Bolinjkar, Head of Research, Ventura Securities Ltd, sees a limited upside in Indian share market from the current levels. Further, the execution of budget announcements will sway the market sentiment. In an interview with Surbhi Jain of Financial Express Online, he also talked about a few sectors that will drive earnings in the coming days.

Where do you see BSE Sensex, Nifty 50 on Budget day? Which sectors are likely to remain in focus?

With new IPOs hitting the markets, what would be your advice to investors?

Quality and pricing are to be kept into consideration. We will see optimization in the IPO market. Only quality businesses are expected to sustain their valuation and do well in future. One has to look at the promoters/board of directors/stakeholders, quality of the business, business outlook and valuation before investing in any IPO.

What would be an appropriate strategy for Nifty Bank traders?

The investors should hedge the long futures. We are bullish on the Indian market but global sentiments could create volatility. To mitigate it we would recommend hedging the long futures.

What do you make of call-put option data ahead of Union Budget 2021?

Shooting VIX and our proprietary tools suggest that we have initiated a short term downtrend at least till expiry.

Which three sectors do you think will drive earnings in near-medium term and why?

As mentioned earlier, infrastructure, agriculture and manufacturing will remain in focus. Global investors are bullish on India, and with the intent to capitalize this opportunity govt could raise funds through overseas bonds. Infrastructure and capital goods companies could be the key beneficiaries. PLI scheme for mobile & allied equipment, API and medical equipment is likely to be extended to other manufacturing goods such as consumer durables, capital goods, etc and export-focused companies could be the key beneficiaries. The government may focus on the entire agricultural value chain to improve productivity and reduce post-harvest losses while ensuring adequate realisation for the farmers. Therefore the focus would be more on the roll-out of DBT for fertilizer subsidy.

What are your overweight and underweight sectors/stocks in the run-up to the Union Budget 2021?

We would recommend BUY on stocks in infrastructure, fertilizers, capital goods and consumer durables. Larsen & Toubro Ltd and RITES are our bets in infrastructure space, while Siemens, Cummins India and AIA Engineering are well-positioned in the capital goods segment.

Shaping ethical user experiences: India’s draft guidelines on dark patterns need a lot more nuancing

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By Anupam Shukla & Abhishek Gaur

The phrase “dark patterns” was introduced in 2010 by Harry Brignall, an expert in user experience (UX). In essence, dark patterns refer to user interfaces (UIs) intentionally crafted to deceive, manipulate, or compel users into specific actions, often contrary to their preferences. These manipulative techniques strategically leverage cognitive biases, including the perception of scarcity, urgency, and the weight of social validation. Consequently, users often find themselves pressured to make hasty choices, driven by fear or the desire to avoid missing out.

Notably, India has also made significant strides in this regard by recently introducing the draft Guidelines for Prevention and Regulation of Dark Patterns (“Guidelines”). As per the Guidelines, “dark patterns” encompass deceptive design tactics within UIs and UXs on digital platforms. These practices aim to mislead users into unintended actions, undermining their autonomy. Under the Guidelines, certain specified dark patterns have been defined and illustrated with examples, to bring more clarity. These include practices such as false urgency, basket sneaking (the surreptitious addition of items without user consent), confirm shaming (utilising fear or guilt to influence user actions), forced actions (imposing additional purchases), subscription traps, interface interference (manipulating information presentation), bait and switch tactics, and drip pricing (concealing costs or delaying price disclosure). The Guidelines aim to prevent such tactics to protect consumers from misleading or coercive practices on online platforms.

The Guidelines are intended to be extended to all platforms systematically offering goods or services in India, advertisers, and sellers. This broad applicability ensures that a wide range of digital entities can be held accountable. The Guidelines are issued in exercise of the powers conferred by the Consumer Protection Act, 2019 (CPA) and can be read as an extension to the concept of “unfair trade practices” as envisaged under the same.There was a need for such guidelines in India due to a combination of cultural and economic factors. India’ diverse and expansive digital user base includes people with varying degrees of digital literacy. This diversity makes users particularly vulnerable to deceptive design tactics.

Culturally, trust plays a significant role in Indian consumer relationships, and the exploitation of that trust through dark patterns can erode this vital foundation. Economically, India’s digital market is growing rapidly and exposing it to unscrupulous practices may potentially hinder this growth and result in financial losses and compromised user confidence. Strengthening the regulatory framework can enhance user trust, encouraging more meaningful engagement and increased business revenue. Overall, these regulations can create a more equitable digital ecosystem, safeguarding both users and businesses from the negative impact of deceptive practices.

However, the Guidelines are not flawless, and a few shortcomings come to mind. First, the effectiveness of these regulations heavily depends on enforcement. Without a robust enforcement mechanism and adequate resources, regulating dark patterns on a vast and rapidly evolving digital landscape, such as ours, may prove challenging. Regulators will also need to stay ahead of new deceptive tactics that will keep on emerging.Second, nagging, as a form of dark patterns under the Guidelines, is relatively broad in its definition as determining the threshold between “effective marketing” and “undue interference with the user experience” can be subjective. This lack of clarity may lead to disputes and litigation, requiring a more precise delineation of this dark pattern.

Lastly, stricter regulations pose numerous challenges to businesses. Compliance costs can be substantial, particularly for smaller enterprises, necessitating significant investments in redesign and testing to ensure UIs meet the guidelines. Furthermore, some businesses might struggle to design UIs that are both user-friendly and compliant with the regulations. Resource allocation would be another possible concern, with the need for additional resources in areas like compliance monitoring, legal support, and employee education to ensure full adherence to the regulations. While these challenges highlight the complexities of implementing the Guidelines, they also underline the importance of a balanced approach to safeguarding consumers and supporting businesses.

The introduction of the draft guidelines on dark patterns in India is a significant step toward safeguarding consumers in a rapidly growing digital landscape. The Guidelines align with global efforts to combat deceptive design practices, ensuring transparency and trust. While they exhibit some imperfections, continued refinement and diligent enforcement can help create a more equitable digital ecosystem, benefiting both users and businesses. The collective international recognition of the need for such regulations underscores their relevance and importance in the digital age.

Writers are respectively, partner and associate, Pioneer Legal

Buy these two stocks for near term gains as bulls continue to push Nifty higher

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By Nagaraj Shetti

Nifty continued with a sustainable upmove for the second consecutive session on Wednesday and closed the day higher by 123 points. Nifty registered a new all-time high at 14666 in the latter part of the session. Another long bull candle was formed, which indicate an uptrend continuation pattern. The previous four sessions decline has been retraced completely in the last two sessions. This faster retracement could signal further upside in the short term.

The immediate support of 10 day EMA has proved to be a false downside breakout and that led to a sharp upside reversal. As per this pattern, this 10 period EMA could be tested again during next dip, after moving into new highs above 14666-14700 levels. On the upper side, the long term trend line resistances as per monthly chart) could come into play.

The short term trend of Nifty continues to be positive and Wednesday’s upmove could be a confirmation of bullish reversal from the lows. One may expect further upside for the next few sessions, before encountering a next crucial overhead resistances around 14800 levels. Immediate support is at 14550. 

Stock Picks: 

Buy SBI Cards & Payment Services Ltd (CMP Rs 997.15) 

After showing a range movement in the last 8-9 sessions, the stock price has witnessed a sharp upside bounce on Wednesday. We observe positive chart pattern like higher highs and lows, which indicate strength of an uptrend in the stock price. The volume has expanded during recent upside breakout and daily 14 period RSI is placed around 70 levels. Hence, further uptick of RSI from here could mean further strengthening of upside momentum.

Buying can be initiated in SBI Cards at CMP (997.15), add more on dips down to Rs 960, wait for the upside target of Rs 1100 in the next 3-5 weeks. Place a stoploss of Rs 935.

Buy Godrej Consumer Products Ltd- (CMP Rs 799) 

After showing an upside breakout as per weekly time frame chart at Rs 765 in the last week, the stock price continued with upside momentum so far in this week. This pattern could be a confirmation of valid upside breakout of a larger triangle pattern and one may expect further sustainable upside in the near term. Volume keeps on rising after the upside breakout and the weekly momentum oscillator like RSI/Stochastic signal positive indication.

Buying can be initiated in Godrej Consumer at CMP (799), add more on dips down to Rs 765, wait for the upside target of Rs 880 in the next 3-5 weeks. Place a stoploss of Rs 745.

(Nagaraj Shetti is a Technical Research Analyst at HDFC Securities. The views expressed by the author are his own. Please consult your investment advisor before investing.)

Rupee likely to fall further, dollar index may rise to 114 if US Fed hikes rate by 75 bps in November

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By Jigar Trivedi

The Federal Reserve met expectations and hiked rates by 75 bps. With inflation proving to be far stickier than imagined, the Fed repeated that activity needs to slow much more with the door left wide open for a fourth consecutive 75 bps hike in November. With recession looking virtually impossible to avoid, we see a strong chance of policy reversal later in 2023. The Federal Reserve has hiked the Fed funds target range by 75 bps in what was a unanimous decision and upped its forecasts for rate hikes aggressively.

Also Read: Rupee likely to fall further, dollar index may rise to 114 if US Fed hikes rate by 75 bps in November

A very hawkish Fed

Source: Tradingeconomics, Federal Reserve

More tightening is signalled for 2023 with the year-end rate at 4.6%, before it moves lower to 3.9% for 2024, 2.9% in 2025 with the longer run prediction remaining at 2.5%. To underscore the Fed’s willingness to sacrifice growth to get inflation lower it has cut 4Q 2022 year-on-year GDP growth to 0.2% from 1.7% with 2023 cut to 1.2% from 1.7%. The Fed is effectively acknowledging that a recession is coming, but inflation will not fall quickly and there will be a lot of pain. Note the unemployment rate for next year is expected to reach 4.4% versus the current 3.7% and stay there through 2024 with only a very minor drop in 2025.

Federal Reserve forecasts September versus previous June predictions

Source: Federal Reserve

Another 75 bps hike in November with 50 bps minimum in December

Inflation has been stickier than the Federal Reserve expected and certainly more broad-based. To get it down the economy needs to run below potential, bringing demand into better balance with supply capacity. The only way the Fed can do that is to hike rates and keep policy restrictive until that is achieved. Given the Fed’s aggressive stance and the likelihood that inflation moves little over the next month while job creation remains firm, we expect the Fed to hike 75bp for a fourth consecutive time at the November 2nd FOMC meeting. Come December FOMC meeting, we are more hopeful that we will see clearer signs of moderating price pressure on the lead indicators, but we are also fearing weaker activity data that may be enough to convince the Fed to move more cautiously. 50 bps is our call, which would leave the target range at 4.25-4.5%, but we certainly can’t dismiss the possibility of a fifth 75 bps hike.

Also Read: Rupee falls to fresh lifetime low, slips below 81 for the first time amid strong dollar, high bond yield

In the scenario mentioned above, the dollar index is likely to travel to 113 / 114 levels in sessions to come and the USDINR may hit levels above 81.5 a dollar unless the RBI intervenes. The Reserve Bank of India will hold its monetary policy on 30th September (next Friday) which needs to be closely watched for now. Any further escalation in the geo-political risk between Russia and Ukraine may push energy prices, eventually hurting the rupee. The outlook is bullish in the USDINR but we don’t deny technical correction, still….it could be used for going long.

(Jigar Trivedi, Senior Analyst – Currency & Commodity, Reliance Securities. Views expressed are the author’s own.)