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Corporate Bond Issuances Set to Hit ₹11 Trillion in FY26 Amid Falling Rates and Delayed Bank Transmission
Market News, Markets - July 10, 2025

Corporate Bond Issuances Set to Hit ₹11 Trillion in FY26 Amid Falling Rates and Delayed Bank Transmission

Corporate Bond Issuances Set to Hit ₹11 Trillion in FY26 Amid Falling Rates and Delayed Bank Transmission

India’s corporate debt market is poised for another record-breaking year in FY26, with bond issuances expected to exceed ₹11 trillion. This would mark a significant jump from ₹9.95 trillion raised in FY25 and signals a shift in preference toward market-based borrowing over traditional bank loans. With bond yields declining and banks slow to cut lending rates, companies are seizing the opportunity to raise funds at lower costs.

Key Drivers Behind the Surge in Bond Issuances

The surge in corporate bond issuance is largely driven by the divergence in rate transmission between the bond market and the banking system. After the Reserve Bank of India (RBI) initiated rate cuts, yields in the bond market responded swiftly. The 10-year government bond yield fell nearly 38 basis points from 6.70% to 6.32%, making it more attractive for corporates to raise funds through bonds.

In contrast, banks were slower to pass on the benefits of rate cuts. For instance, the one-year marginal cost of lending rate (MCLR) dropped by only 10 basis points during the same period, standing at 8.90%. This lag in rate transmission has widened the cost gap, making debt markets the preferred route for corporates seeking affordable capital.

Front-Loading of Borrowings

Another notable trend is the front-loading of bond issuances. During the first quarter of FY26, companies secured ₹2.79 trillion via 506 private placements—significantly surpassing the ₹1.56 trillion raised in the same quarter of FY25.This sharp increase shows that corporates are rushing to lock in lower rates before any possible reversal in monetary policy.

Companies still favour private placements as their primary method for raising debt. Companies prefer this route due to its flexibility, quicker turnaround, and reduced compliance compared to public issues. In FY25, only ₹19,000 crore was raised through public bond issuances, highlighting the overwhelming preference for private deals.

Who’s Borrowing and at What Rates?

The bulk of recent bond issuances have come from highly rated companies, especially those with AAA credit ratings. Firms like Bajaj Housing Finance and L&T Finance successfully raised funds in June with coupon rates ranging between 7.0% and 7.5%. These rates are considerably lower than those offered by banks for similar credit quality, reinforcing the shift towards bonds.

The investor base for corporate bonds is also expanding. Mutual funds, insurance companies, and pension funds are showing growing interest in these instruments due to the attractive yield spreads over government securities. This demand further supports the momentum in the primary bond market.

Market Size and Comparison with Global Peers

Despite the robust growth, India’s corporate bond market remains underdeveloped relative to other major economies. Currently, the market accounts for about 18% of the country’s GDP. In contrast, China’s corporate debt market represents roughly 36% of its GDP, and South Korea’s stands at nearly 80%.

The lack of a deep and active secondary market is one of the main reasons behind this gap. According to RBI data, the average secondary market turnover in corporate bonds is only about 3.8% of outstanding bonds. Low liquidity discourages retail participation and limits price discovery, posing a challenge to long-term market development.

Delayed Transmission in Bank Credit

While bond issuances have grown rapidly, bank credit to industries continues to lag. As of May 2025, year-on-year credit growth to the industrial sector stood at 4.8%—a modest figure compared to the spike in debt market activity. The slow adjustment in lending rates and tight credit assessment by banks have nudged corporates toward more efficient capital-raising options like bonds.

Forecasts and Outlook

Rating agencies and market participants expect this trend to continue. ICRA estimates that corporate bond issuances may total between ₹10.7 trillion and ₹11.3 trillion by FY26-end. Others believe that if the current momentum continues, the market could even surpass ₹12 trillion this fiscal year.

However, the pace may moderate in the second half of the year if the RBI decides to pause or reverse its rate-cutting cycle due to inflationary pressures or global uncertainties. Additionally, improving secondary market liquidity and increasing public issuances could further support the market’s depth and resilience.

Structural Reforms Still Needed

Despite strong momentum, several structural issues need to be addressed. These include improving transparency, easing public issuance norms, developing the secondary market, and encouraging wider investor participation. SEBI and RBI have taken steps in this direction, but consistent reforms are essential to build a deeper and more vibrant corporate bond ecosystem.

Conclusion

India’s corporate bond market is on track for another landmark year, fueled by favorable interest rate dynamics and increased reliance on private placements. As companies take advantage of lower yields and bypass sluggish bank lending, the debt market is evolving into a major funding channel. Yet, for sustainable growth, long-standing challenges like liquidity, access, and regulatory hurdles must be tackled head-on.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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ICICI Bank Shares Slip as ICICI Prudential AMC Files for Landmark ₹10,000 Crore IPO

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ESAF Small Finance Bank Shares Surge Over 11% in Largest Intraday Gain in 16 Months
Banking - June 20, 2025

ESAF Small Finance Bank Shares Surge Over 11% in Largest Intraday Gain in 16 Months

ESAF Small Finance Bank Shares Surge Over 11% in Largest Intraday Gain in 16 Months

On June 19, 2025, ESAF Small Finance Bank (SFB) experienced a sharp surge in its stock price, marking its most significant intraday gain in the past 16 months. The stock climbed over 11% during the trading session, driven by strategic decisions aimed at cleaning up the bank’s balance sheet and reducing non-performing assets (NPAs). This positive development sparked strong investor interest and sent ESAF’s shares soaring.

Strategic Move to Offload Stressed Assets

The primary catalyst for this impressive rally was the bank’s announcement regarding the sale of a substantial pool of stressed loans to an Asset Reconstruction Company (ARC). ESAF’s Board of Directors approved the sale of stressed assets worth approximately ₹735 crore, which includes ₹362 crore in non-performing assets and another ₹372 crore in technically written-off accounts.

Significantly, the bank had already made provisions covering nearly 90% of these stressed assets, minimizing any additional impact on its balance sheet. By offloading these loans, ESAF is taking an important step toward improving its asset quality and streamlining its financials.

Investor Confidence on the Rise

Investors responded positively to this decisive move. The stock saw high trading volumes, reaching an intraday peak of around ₹34 per share, before closing the day with gains of nearly 9%. The sharp rise came after ESAF shares had been under pressure in recent months, declining roughly 21% year-to-date.

The sudden turnaround indicates growing market confidence in the bank’s commitment to improving its financial health. The robust trading activity, coupled with technical indicators suggesting more room for growth, added to the optimism surrounding the stock.

Key Financial Background

Despite the favorable market reaction, ESAF Small Finance Bank reported a net loss of ₹183 crore for the March 2025 quarter, a steep drop from the ₹43 crore profit achieved in the same quarter last year. The bank’s operating income also fell by about 10.8%, from approximately ₹1,002 crore to around ₹893 crore.

A key factor contributing to the loss was higher provisions and write-offs linked to stress in its microfinance portfolio. The provisions for the quarter spiked to approximately ₹332 crore. Nonetheless, ESAF maintained a net interest margin (NIM) of around 8.1% and a manageable net NPA ratio of 2.9%, reflecting its underlying operational strength despite temporary setbacks.

Focus on Retail and Secured Lending

ESAF has been gradually shifting its lending strategy from microfinance-heavy exposure to a more balanced portfolio with greater emphasis on secured and retail loans. This transition is seen as a strategic effort to mitigate risks and stabilize long-term growth.

The sale of bad loans aligns with this shift, allowing the bank to free up capital, clean its books, and redirect resources toward safer, revenue-generating assets. Market analysts believe this strategic realignment positions ESAF to achieve healthier margins and more sustainable growth in the coming quarters.

Market Outlook and Analyst Perspective

The bank’s proactive approach to handling its stressed assets has impressed both investors and analysts. Market participants see this as an early indication that ESAF is taking decisive action to strengthen its financial position and regain profitability.

While the Q4 results reflect lingering challenges, the asset sale demonstrates that the bank is serious about resolving its NPA issues. As ESAF continues to realign its loan book and focus on growth areas such as retail and secured lending, analysts anticipate improved financial stability and a potential return to profitability.

Additionally, the strong trading volumes and positive technical signals suggest the stock may continue its upward trajectory in the near term. Investors are now closely monitoring the bank’s subsequent performance to confirm whether this rally is sustainable.

Conclusion

The 11% intraday jump in ESAF Small Finance Bank’s shares reflects fresh investor confidence after the bank’s strategic move to offload a significant amount of stressed assets and strengthen its balance sheet. With a high provision coverage and a shift towards safer lending practices, ESAF is taking the necessary steps to improve its financial health and operational efficiency.

The market’s favorable response to these developments indicates optimism about the bank’s future growth and stability. Going forward, ESAF’s ability to sustain this momentum will depend on its execution of the revised lending strategy, its capacity to contain NPAs, and its return to consistent profitability.

ESAF Small Finance Bank shares jumped over 11% following the announcement of stressed asset sales, reflecting stronger investor trust and a focus on improving the balance sheet.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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MTAR Technologies Secures Rs 90 Crore Annual Deal, Boosting Long-Term Growth

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Deutsche Bank Entities Reduce Yes Bank Stake: Market Implications and Strategic Shifts
Banking - June 7, 2025

Deutsche Bank Entities Reduce Yes Bank Stake: Market Implications and Strategic Shifts

Deutsche Bank Entities Reduce Yes Bank Stake: Market Implications and Strategic Shifts

A Deep Dive into the Release of Encumbered Shares and Its Impact on India’s Banking Sector

Introduction
In a significant market development, Deutsche Bank AG and its associated entities have recently reduced their stake in Yes Bank Limited by releasing a substantial block of shares from encumbrance. This move, executed in early June 2025, marks a notable shift in the ownership structure of one of India’s prominent private sector banks.

The Transaction: Key Details
On June 3, 2025, Deutsche Bank AG, along with its associated entities such as DB Trustees (Hong Kong) Limited and the Singapore Branch, released the encumbrance on approximately 820 million equity shares of Yes Bank.
This move led to a 2.62% reduction in its ownership, lowering its total stake to 13.46% of the bank’s equity. This transaction was formally reported to the stock exchanges on June 5, 2025, complying with SEBI’s Substantial Acquisition of Shares and Takeovers Regulations, 2011.
Under Indian market norms, such a release of pledged shares is considered a form of divestment, as it significantly alters the shareholder structure. Importantly, this was not a fresh issuance or a buyback but rather the freeing up of shares that had been pledged as collateral in earlier financial arrangements.

Entities Involved and Shareholding Structure
In this transaction, entities aligned with Deutsche Bank AG—namely DB Trustees (Hong Kong) Limited and Deutsche Bank AG, Singapore Branch—acted as offshore security agents on behalf of lending institutions. Other related entities mentioned in the disclosure are DWS Investment GmbH, DWS International GmbH, and DBX Advisors LLC.
Together, these entities oversee a substantial part of Deutsche Bank’s holdings in Yes Bank, largely through shares that were previously pledged as collateral.
Following the release, Deutsche Bank’s aggregate holding in Yes Bank stands at approximately 4.22 billion shares, representing 13.46% of the bank’s total share capital. Of this, about 4.21 billion shares remain encumbered, with the balance held by other Deutsche Bank entities.

Market Context and Strategic Implications
The reduction in Deutsche Bank’s encumbered stake comes at a time of heightened activity in Yes Bank’s shareholding landscape. In May 2025, Japan’s Sumitomo Mitsui Banking Corporation (SMBC) announced plans to acquire a 20% stake in Yes Bank. Subject to regulatory clearances, this acquisition would position SMBC as the bank’s largest shareholder.
This transaction is widely seen as a transformative step for Yes Bank, signaling the arrival of a strong foreign anchor investor and potentially ushering in improved governance and risk management practices.
The concurrent decrease in Deutsche Bank’s stake and the anticipated arrival of SMBC emphasize the shifting ownership dynamics at Yes Bank.
While Deutsche Bank’s move does not indicate a complete exit, it suggests a recalibration of its exposure and possibly a reassessment of its strategic interests in the Indian banking sector.

Investor Sentiment and Share Price Movements
Investor sentiment around Yes Bank has been volatile in recent weeks. In early June, the bank’s shares experienced a sharp decline following the denial of rumors regarding SMBC’s acquisition of a controlling stake. Despite this, the broader narrative remains positive, with Yes Bank’s stock having rallied significantly from its lows earlier in the year. The release of Deutsche Bank’s encumbered shares is likely to be interpreted by the market as a sign of evolving financial arrangements and potential shifts in the bank’s ownership dynamics.
Deutsche Bank’s own share performance has been robust, with gains of nearly 4% over the past month and more than 60% over the last year. This strong performance may have influenced the bank’s decision to reassess its holdings and optimize its portfolio in line with global and local market conditions.

Regulatory and Compliance Considerations
The release of encumbered shares is a regulated activity under SEBI’s takeover code, requiring prompt and transparent disclosure to the stock exchanges. The recent transaction complies with these requirements, ensuring that all market participants are informed of material changes in shareholding. Recently, both Deutsche Bank and Yes Bank came under regulatory spotlight, as the Reserve Bank of India levied penalties in May 2025 for lapses in compliance. This backdrop underscores the critical role of regulatory compliance in influencing strategic choices and investor sentiment.

Broader Implications for India’s Banking Sector
The developments at Yes Bank reflect broader trends in India’s banking industry, including increased foreign participation and the growing importance of robust governance frameworks. The entry of SMBC as a major shareholder is expected to set a precedent for more foreign investment in Indian banks, potentially paving the way for similar deals in the future. At the same time, the adjustments in Deutsche Bank’s stake demonstrate the fluidity of ownership structures and the ongoing evolution of risk management practices among global financial institutions.
For Yes Bank, the entry of a new key investor alongside the restructuring of current shareholdings signals a fresh phase in its turnaround and expansion journey. Its future performance will largely depend on its capacity to secure strategic backing and uphold strong regulatory standards.

Conclusion
Deutsche Bank’s decision to release a significant block of encumbered Yes Bank shares is a landmark event with far-reaching implications for both institutions and the Indian banking sector at large. The transaction underscores the importance of transparent disclosure, regulatory compliance, and strategic portfolio management in today’s dynamic financial environment. As Yes Bank prepares to welcome SMBC as its largest shareholder, the market will be closely watching for further developments and the impact on the bank’s governance, performance.

 

 

 

 

 

 

 

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MCX’s Leap into Electricity Derivatives: A Game-Changer for India’s Energy Markets

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Sunil Mittal and Warburg Pincus Explore Major Investment in Haier India
Market News - June 4, 2025

Warburg Pincus Secures CCI Green Light for Major Stake in IDFC First Bank

Warburg Pincus Secures CCI Green Light for Major Stake in IDFC First Bank

Global private equity giant Warburg Pincus receives regulatory approval to invest nearly 10% in IDFC First Bank, signaling a transformative phase for the Indian lender amid governance debates and fresh capital infusion.

Introduction

In a significant development for India’s financial sector, Warburg Pincus, one of the world’s leading private equity firms, has secured regulatory clearance from the CCI to purchase a substantial stake in IDFC First Bank. The approval, granted in early June 2025, marks a pivotal moment for the bank as it seeks to bolster its capital base and accelerate its transformation into a technology-driven universal bank.

Warburg Pincus’ Strategic Investment

Warburg Pincus, through its investment arm Currant Sea Investments BV, plans to acquire approximately a 9.99% stake in IDFC First Bank. The investment will be made via the subscription of over 81 million compulsorily convertible cumulative preference shares (CCPS), which will eventually convert into ordinary shares. This move is part of a broader ₹7,500 crore capital raise, with Warburg Pincus contributing ₹4,876 crore and ADIA investing ₹2,624 crore.
The infusion of fresh capital is expected to strengthen the bank’s balance sheet, support its expansion plans, and enhance its ability to compete in India’s rapidly evolving banking landscape.

Regulatory Approval and Its Implications

The CCI’s nod is a crucial regulatory milestone, as any acquisition of significant stakes in Indian banks by foreign investors requires careful scrutiny to ensure compliance with competition and sectoral norms. The approval not only validates the transaction’s compliance but also signals confidence in the bank’s governance and future prospects.
With this green light, IDFC First Bank is poised to access much-needed capital, which is vital for meeting regulatory requirements, funding growth initiatives, and weathering macroeconomic uncertainties.

Shareholder Dynamics and Boardroom Debate

Although the capital infusion has been broadly welcomed by market observers, it has also sparked some controversy. A recent vote by IDFC First Bank’s shareholders saw the rejection of Warburg Pincus’ nominee for a seat on the bank’s board. The proposal garnered only 64.1% approval, falling short of the 75% threshold required for passage.
This episode highlights the complexities of balancing the interests of new institutional investors with those of existing shareholders and underscores the importance of transparent governance practices. The bank’s management has since initiated dialogues with domestic investors to address concerns and foster consensus around future board appointments.

Financial Performance Amidst Change

The backdrop to these developments is a challenging financial environment for IDFC First Bank. The bank posted a steep 58% year-on-year drop in net profit for the fourth quarter of FY25, with net earnings slipping to ₹304 crore, even as total income rose by 15%. The drop in profitability has been attributed to higher provisioning costs, reflecting a cautious approach amid economic headwinds.
The bank’s shares responded to the news with a modest decline, closing 1.63% lower on the day the CCI approval was announced. Nevertheless, analysts believe that the fresh capital from Warburg Pincus and ADIA will provide the bank with the financial flexibility needed to pursue growth opportunities and manage risks more effectively.

Broader Context: Consolidation and Competition

The Warburg Pincus-IDFC First Bank transaction takes place amid increased momentum in India’s financial services sector. The Competition Commission of India’s recent clearance of a $13 billion merger between global advertising powerhouses Omnicom Group and The Interpublic Group (IPG) highlights a wider pattern of consolidation and strategic partnerships across various industries. For IDFC First Bank, the partnership with Warburg Pincus and ADIA is not just about capital. It brings with it access to global expertise, strategic guidance, and the potential for future collaborations that could accelerate the bank’s digital transformation and market reach.

Looking Ahead: Strategic Priorities

With the regulatory hurdles cleared, IDFC First Bank’s immediate focus will be on deploying the new capital to drive growth, enhance digital capabilities, and improve asset quality. The bank’s leadership has articulated a vision of becoming a technology-led universal bank, leveraging data analytics, digital platforms, and innovative products to serve a diverse customer base.
At the same time, the management will need to navigate the evolving expectations of its expanded shareholder base, ensuring that governance standards are upheld and that all stakeholders are aligned on the bank’s strategic direction.

Conclusion

The CCI’s approval of Warburg Pincus’ investment in IDFC First Bank marks a watershed moment for the bank and its stakeholders. While the journey ahead will require careful management of governance issues and financial performance, the infusion of global capital and expertise positions the bank for a new phase of growth and innovation. As India’s banking sector continues to evolve, the IDFC First Bank-Warburg Pincus partnership stands out as a bellwether for the future of private capital in Indian finance.

 

 

 

 

 

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SPML Infra Jumps 7% on Chennai Water Project Win!

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SBI Lowers Interest on Savings and Term Deposits
Result Updates - May 5, 2025

Decoding SBI’s Q4 Surge: Strategic Gains and Headwinds

Decoding SBI’s Q4 Surge: Strategic Gains and Headwinds

 

STATE BANK OF INDIA

 CMP* (₹) 792
 Company Sector Banking
 Company Symbol State Bank of India                                                                                                                                                                                      

About the Company: –

State Bank of India (SBI) stands as the largest public sector bank in India and a pillar of the country’s financial ecosystem. With a legacy that dates back over two centuries, SBI has built an unmatched scale and reach across the Indian subcontinent. The bank caters to more than 51 crore customers, encompassing individuals, businesses, government bodies, and institutions, reflecting its deep penetration and trust across all economic segments.

SBI operates through a vast physical infrastructure of 22,542 branches and 65,004 ATMs/CDMs, making banking services accessible across urban, semi-urban, and rural areas. This widespread network not only enhances customer convenience but also supports the government’s financial inclusion initiatives. Internationally, SBI has established a presence in 29 countries, operating through 229 global offices that include branches, subsidiaries, and representative offices, thus catering to the banking needs of Indian diaspora and global corporates. In recent years, SBI has aggressively digitized its services to stay ahead in the evolving financial landscape. Its flagship digital platform, YONO (You Only Need One), has become one of India’s most widely used integrated banking and lifestyleapps.

With over 7.1 crore downloads and 2.7 crore monthly active users, YONO enables customers to perform a wide range of activities from opening bank accounts, applying for loans, investing in mutual funds and insurance, to shopping and travel bookings all through a single interface. The success of YONO underscores SBI’s commitment to innovation and customer- centric digital transformation, helping the bank expand its reach and efficiency while significantly lowering the cost-of-service delivery.

Key Financial

Particular Amount
MARKET CAPITALIZATION (₹ CRORE) ₹7,13,970
DEBT (₹ CRORE)  ₹5,06,027
EV (₹ CRORE) ₹12,20,000+
52 WEEK H/L ₹826 / ₹542
EQUITY CAPITAL (₹ CRORE) ₹892
FACE VALUE (₹) 1.00
DIVIDEND YEILD 1.99%
NO OF SHARES (CRORES) 89.2
Quarterly Performance
SBI’s Q4 FY25 results reflect strong operational momentum with improvements in both core and non-core income. Net Interest Income (NII) increased by 3.2% quarter-on-quarter (QoQ) to ₹42,775 crore, driven by a steady interest income growth of 1.91%. However, Net Interest Margin (NIM) slightly declined to 3.00% at the bank level, indicating pressure on yields.

The standout metric this quarter was Non-Interest Income, which surged 119% QoQ to ₹24,210 crore, supported by strong treasury gains and higher fee income. Consequently, Operating Income grew 27.6% QoQ to ₹66,985 crore, and Operating Profit rose 32.8% to ₹31,286 crore despite a 23.4% increase in operating expenses. On the bottom line, Net Profit came in at ₹18,643 crore, up 10.4% from the previous quarter but down 9.9% YoY, due to higher provisions of ₹12,643 crore (up 89.9% QoQ). Despite this, SBI maintained healthy profitability metrics, with Return on Assets (ROA) at 1.12% and Earnings Per Share (EPS) at ₹84.72. The cost-to-income ratio moderated slightly to 53.29%, indicating improved efficiency over the previous quarter.

Overall, the bank demonstrated operational resilience with strong income growth, though rising provisions and narrowing margins slightly offset the earnings upside.

Particulars Q4FY24 Q3FY25 Q4FY25 QoQ (%) YoY (%)
Interest Income 1,11,043 1,17,427 1,19,666 1.91% 7.77%
Interest Expenses 69,387 75,981 76,892 1.20% 10.81%
Net Interest Income (NII) 41,655 41,446 42,775 3.21% 2.69%
Non-Interest Income 17,369 11,041 24,210 119.28% 39.38%
Operating Income 59,024 52,486 66,985 27.62% 13.49%
Operating Expenses 30,277 28,935 35,698 23.37% 17.91%
Operating Profit 28,748 23,551 31,286 32.84% 8.83%
Total Provisions 8,049 6,659 12,643 89.86% 57.08%
Net Profit 20,698 16,891 18,643 10.37% -9.93%
NIM (Whole Bank) 3.30% 3.01% 3.00% -1 bps -30 bps
NIM (Domestic) 3.47% 3.15% 3.15% 0 bps -32 bps
Cost to Income Ratio 51.30% 55.13% 53.29% -184 bps +199 bps
Cost to Assets (%) 1.99% 1.79% 2.15% +36 bps +16 bps
EPS (₹) 93.28 75.09 84.72 — —
ROA

(Annualized)

 1.36% 1.04% 1.12% — —

Revenue Disclosure

In Q4FY25, State Bank of India (SBI) reported a total income of ₹1,29,173 crore, marking a YoY growth of 13.8% over ₹1,13,469 crore in Q4FY24. The growth was primarily driven by a strong increase in interest income, which rose 20.3% YoY to ₹1,14,782 crore.

  • The largest contributor was Interest on Advances, which increased to ₹84,017 crore (up 18.3% YoY), reflecting strong credit growth and improved yields.
  • Interest on Investments saw a substantial growth of 28.2%, reaching ₹24,580 crore, likely supported by increased SLR securities and favorable interest rates.
  • Other Interest Components also grew steadily, indicating better treasury and liquidity management.

However, Other Income declined by 20.5% YoY to ₹14,391 crore. This drop was largely attributed to lower treasury income and fee-based earnings, which affected the non-interest revenue profile for the quarter.

 

Key Revenue Financials  (Rs.in crore)

Particulars Q4FY25 Q4FY24 YoY Change (%)
Interest Earned ₹1,14,782 ₹95,374 20.3%
– Interest on Advances ₹84,017 ₹71,008 18.3%
– Interest on Investments ₹24,580 ₹19,181 28.2%
– Interest on Balances with RBI & Banks ₹1,258 ₹975 29.0%
– Others ₹4,927 ₹4,210 17.0%
Other Income ₹14,391 ₹18,095 –20.5%
Total Income ₹1,29,173 ₹1,13,469 13.8%

Liabilities Table – SBI Q4FY25 (₹ in Crore)

Component Q4FY25 Q4FY24
Deposits ₹47,20,887.67 ₹44,23,778.45
Borrowings ₹3,18,374.62 ₹3,26,214.70
Other Liabilities & Provisions ₹2,20,244.82 ₹2,03,651.46
Capital ₹892.46 ₹892.46
Reserves & Surplus ₹2,98,072.11 ₹2,79,830.44
Minority Interest ₹1,169.03 ₹1,187.13
Total Liabilities ₹62,58,942.71 ₹59,53,475.55

Description of the above table

State Bank of India (SBI) recorded total liabilities of ₹62.59 lakh crore as of Q4FY25, indicating a year-on-year (YoY) growth of 5.13% from ₹59.53 lakh crore in Q4FY24. The major component remains customer deposits, which rose by over ₹2.97 lakh crore YoY, reinforcing SBI’s strong retail franchise and deposit mobilization strength .Borrowings, which include funds raised from RBI, banks, and other institutions, showed a slight decrease, suggesting greater reliance on deposits for funding. Other liabilities and provisions, primarily consisting of provisioning for bad loans and other obligations, increased by around ₹16,500 crore—pointing to prudence in financial risk management. SBI’s capital base remained stable at ₹892 crore, while reserves and surplus grew significantly, reflecting retained earnings and enhanced internal accruals. The minority interest represents the stake of minority shareholders in SBI’s subsidiaries and showed little change.

Overall, SBI’s liability’s structure continues to be robust, with healthy growth in core funding and a conservative approach to provisioning and capital management.

FINANCIAL STATEMENT

P&L Statement (In Cr.)

Particulars Q4FY25 Q4FY24 YoY Growth FY25 FY24 YoY Growth
Interest Earned 1,07,678 92,951 15.8% 4,03,057 3,48,302 15.7%
Interest Expended 62,796 51,099 22.9% 2,26,304 1,88,491 20.1%
Net Interest Income (NII) 44,882 41,852 7.2% 1,76,753 1,59,811 10.6%
Other Income 20,958 18,094 15.8% 47,375 47,761 -0.8%
Total Income 65,840 59,946 9.8% 2,24,128 2,07,572 8.0%
Operating Expenses 28,873 24,496 17.9% 95,589 83,796 14.1%
Operating Profit 36,967 35,450 4.3% 1,28,539 1,23,776 3.9%
Provisions and

Contingencies

 1,609 3,276 -50.9% 14,578 20,489 -28.9%
Profit before Tax (PBT) 35,358 32,174 9.9% 1,13,961 1,03,287 10.3%
Tax Expense 8,906 7,950 12.0% 29,746 26,640 11.6%
Net Profit 26,452 24,224 9.2% 84,215 76,647 9.9%

Description of the above table

State Bank of India (SBI) reported a net profit of ₹26,452 crore in Q4FY25, marking a 9.2% year-on- year (YoY) growth from ₹24,224 crore in Q4FY24. For the full year FY25, net profit stood at ₹84,215 crore, an increase of 9.9% over FY24. Interest income rose significantly by 15.8% YoY in Q4FY25 to ₹1,07,678 crore, supported by growth in the loan book and improved yield on advances. However, interest expenses also grew by 22.9%, reflecting the impact of rising deposit costs and cost of funds.Despite higher interest costs, Net Interest Income (NII) – the core income from lending – grew by 7.2% YoY in Q4FY25 to ₹44,882 crore, while for the full year it increased 10.6%, reaching ₹1,76,753 crore. Other income, comprising fees, commissions, treasury operations, and recoveries, rose by 15.8% YoY in Q4 but remained nearly flat for the full year. Operating expenses increased by 17.9% YoY due to higher employee and administrative costs, slightly compressing the operating profit margin. Still, operating profit grew by 4.3% YoY in Q4FY25 and 3.9% for FY25, touching ₹1,28,539 crore for the year. A major contributor to net profit growth was the sharp decline in provisions and contingencies, which fell by 50.9% YoY in Q4FY25 and by 28.9% YoY annually, indicating better asset quality and lower credit costs.

The Profit Before Tax (PBT) grew by 9.9% YoY to ₹35,358 crore in Q4FY25. After a tax provision of ₹8,906 crore, the bank posted its record quarterly and annual net profits.

Summary of Balance Sheet

Particulars FY24 FY25 YoY Growth
Total Assets 59,84,781 65,98,819 10.2%
Deposits 45,03,700 51,30,072 13.9%
Gross Advances 33,03,731 36,48,564 10.4%
Capital & Reserves 3,62,996 4,23,019 16.5%

Description of above table

SBI’s balance sheet for FY25 reflects a robust and healthy financial trajectory, marked by substantial growth across key parameters. The total deposits surged to ₹51.3 lakh crore, representing an impressive 13.9% year-on-year (YoY) growth compared to ₹45.03 lakh crore in FY24. This strong deposit mobilization highlights the bank’s continued dominance and customer trust in India’s banking landscape, underpinned by its extensive branch network and strong retail franchise. On the asset side, gross advances rose to ₹36.48 lakh crore, reflecting a 10.4% growth YoY from ₹33.03 lakh crore. This expansion in lending activity signals robust credit demand across sectors, including retail, agriculture, MSME, and corporate segments. The bank’s ability to grow advances while maintaining asset quality showcases sound credit risk management and a growing economy. Additionally, the capital and reserves component, a key indicator of financial strength and stability, saw a noteworthy rise of 16.5%, increasing from ₹3.63 lakh crore in FY24 to ₹4.23 lakh crore in FY25. This growth may be attributed to higher retained earnings from record profits, prudent capital management, and possibly fresh equity infusion or revaluation reserves. A stronger capital base not only ensures regulatory compliance under Basel III norms but also enhances the bank’s capacity to support future business growth and absorb potential shocks.

In summary, SBI’s balance sheet for FY25 paints a picture of sustained growth, increasing financial resilience, and strategic positioning for future expansion in a dynamic economic environment.

Summary of Cash Flow Statement

Particulars FY25
Net Profit ₹61,077 Cr
Operating Profit ₹96,275 Cr
Provisions and Contingencies ₹19,384 Cr
Dividend Declared ₹13.70/share

Description of above table

In FY25, the State Bank of India (SBI) achieved a record-breaking net profit of ₹61,077 crore, showcasing exceptional earnings performance and a strong operational foundation. This remarkable profitability was supported by a healthy growth in core income streams, including interest income from advances and investments, as well as fee-based income. The record profit reflects efficient cost management, stable asset quality, and a favorable interest rate environment that supported net interest margins (NIMs). A key factor contributing to improved cash flows was the reduction in provisions and contingencies, which stood at ₹19,384 crore—lower than previous years. This decline indicates better credit discipline and improved asset quality, as fewer resources had to be set aside for non-performing assets (NPAs) and potential loan losses. As provisioning requirements ease, more of the bank’s operating profit translates directly into net cash flows, enhancing its liquidity and financial flexibility. SBI’s ability to declare a final dividend of ₹13.70 per share further underscores its strong free cash flow position and commitment to shareholder value. Dividend payouts of this magnitude are generally indicative of surplus cash after meeting capital expenditure and regulatory requirements, reflecting a confident outlook on future profitability and capital adequacy. While the detailed cash flow statement was not disclosed in the presentation, the combination of a high operating profit of ₹96,275 crore and lower provisioning strongly suggests healthy internal accruals and sustainable financial operations. These internal cash flows are crucial for funding future growth, managing liabilities, investing in digital infrastructure, and maintaining a robust capital buffer.

Ratio Analysis

Ratio FY25 FY24 Change / Remarks
Earnings Per Share (EPS) 63.1 57.7 ▲ Improved due to higher net profit
Book Value Per Share 209.6 183.3 ▲ Indicates stronger capital base
Dividend Per Share 33.0 34.0 ▼ Slight decline despite record profit
Revenue Growth (%) 1.9 4.7 ▼ Slower topline growth rate
Operating Profit Margin (%) 20.7 21.6 ▼ Marginal drop in operating efficiency
Net Profit Margin (%) 16.7 16.3 ▲ Improved profitability
Return on Net Worth (%) 30.1 31.5 ▼ Slight decline in efficiency of equity usage
Asset Turnover Ratio 1.2 1.3 ▼ Slight reduction in asset utilization
Fixed Asset Turnover Ratio 3.6 3.9 ▼ Indicates higher investment in fixed assets
Current Ratio 2.6 2.4 ▲ Improved short-term liquidity
Quick Ratio 2.6 2.4 ▲ Strengthened liquidity without inventories
Interest Coverage Ratio 134.1 149.1 ▼ Slight decline, but remains very strong

Description of Ratio Analysis

State Bank of India (SBI) reported a net profit of ₹26,452 crore in Q4FY25, marking a 9.2% year-on-year (YoY) growth from ₹24,224 crore in Q4FY24. For the full year FY25, net profit stood at ₹84,215 crore, an increase of 9.9% over FY24. Interest income rose significantly by 15.8% YoY in Q4FY25 to ₹1,07,678 crore, supported by growth in the loan book and improved yield on advances. However, interest expenses also grew by 22.9%, reflecting the impact of rising deposit costs and cost of funds. Despite higher interest costs, Net Interest Income (NII) – the core income from lending – grew by 7.2% YoY in Q4FY25 to ₹44,882 crore, while for the full year it increased 10.6%, reaching ₹1,76,753 crore. Other income, comprising fees, commissions, treasury operations, and recoveries, rose by 15.8% YoY in Q4 but remained nearly flat for the full year. Operating expenses increased by 17.9% YoY due to higher employee and administrative costs, slightly compressing the operating profit margin. Still, operating profit grew by 4.3% YoY in Q4FY25 and 3.9% for FY25, touching ₹1,28,539 crore for the year. A major contributor to net profit growth was the sharp decline in provisions and contingencies, which fell by 50.9% YoY in Q4FY25 and by 28.9% YoY annually, indicating better asset quality and lower credit costs. The Profit Before Tax (PBT) grew by 9.9% YoY to ₹35,358 crore in Q4FY25. After a tax provision of ₹8,906 crore, the bank posted its record quarterly and annual net profits.

Conference Highlight

1. Robust Credit Growth Outlook

  • SBI projects credit growth of 14–15% year-on-year in
  • Retail loans (especially housing and personal loans) and SME lending are the major growth
  • The bank has witnessed strong demand in home loans, Xpress Credit (personal loans), and small ticket MSME loans.
  • Corporate loan growth is expected to be moderate but steady, driven by working capital demand and select capex

2. Net Interest Margin (NIM) Stability

  • SBI guided for domestic NIMs at 4%–3.5% in FY25, despite a high cost of deposits.
  • There is a re-pricing benefit on the loan book as older low-yield loans get replaced with higher-rate
  • Deposit rates have been inching up, but asset yields have also improved, helping protect
  • NIM pressure from overseas operations is expected to normalize by

3. Strong Asset Quality and Credit Discipline

  • SBI reported best-in-class asset quality metrics among PSU
  • Gross NPA (GNPA) ratio is expected to fall further below 4%, and Net NPA below 0.6%, reflecting healthy recoveries and upgrades.
  • Credit cost is guided below 1%, supported by a strong PCR (Provision Coverage Ratio) of 76%+.
  • Slippage ratios remain under control, with no large stress emerging across retail or corporate

4. Healthy Return Metrics (Profitability)

  • SBI aims to maintain a Return on Assets (RoA) near 1% and Return on Equity (RoE) around 16–17%.
  • Operating performance is being driven by growth in core earnings, better asset quality, and efficiency in opex (operating expenses)
  • Continued focus on cost rationalization and productivity enhancement supports profit sustainability.

5. Digital Banking and CASA Strategy

  • SBI is ramping up its digital initiatives through platforms like YONO to drive customer engagement and reduce operational cost.
  • Over 95% of transactions now happen through digital channels, underscoring SBI’s shift toward a digital-first
  • CASA (Current Account Savings Account) ratio is expected to remain stable despite intense deposit competition from peers and NBFCs.

6. Strong Performance of Subsidiaries

  • SBI’s subsidiaries — SBI Life Insurance, SBI Cards, SBI General Insurance, and SBI Mutual Fund — continue to perform well.
  • SBI Life and SBI MF saw strong growth in AUM and premiums, boosting consolidated
  • The bank mentioned the potential to unlock further value through IPOs or stake monetization in non-banking

7. Comfortable Capital Position

  • SBI is well-capitalized with CET-1 ratio around 9% and total capital adequacy >14%.
  • There are no near-term equity dilution plans, as internal accruals and retained earnings are sufficient to support
  • Management is confident in supporting credit expansion without external capital infusion.

 

 

 

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Kotak Mahindra Bank stock slips following Q4 earnings announcement.

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Kotak Mahindra Bank stock slips following Q4 earnings announcement.
Result Updates - May 5, 2025

Kotak Mahindra Bank stock slips following Q4 earnings announcement.

Kotak Mahindra Bank stock slips following Q4 earnings announcement.

 

 Kotak Mahindra Bank’s Q4 shortfall prompts analyst downgrades, fueling uncertainty over its future performance trajectory.

 Kotak Mahindra Bank Faces a Challenging Quarter

Kotak Mahindra Bank’s financial performance for the fourth quarter of FY2025 came as a surprise to investors, as the bank posted a notable decline in profits, falling short of analysts’ expectations. Following this disappointing result, the bank’s share price plummeted by more than 5%, triggering multiple downgrades from leading brokerages. The primary concerns stemmed from rising credit costs and a weaker loan growth outlook, leading to a re-evaluation of the stock’s investment potential.

Q4 Earnings Fall Short: Key Highlights

Kotak Mahindra Bank reported a 14% drop in standalone net profit for Q4 FY2025, which came in at ₹3,552 crore. Analysts had predicted a higher profit margin, but the actual results were marred by a significant increase in provisions for bad loans. This surge in provisions raised concerns about the bank’s asset quality and its ability to maintain profitability in the near term.
“Higher credit costs, driven by an increase in non-performing assets, have hurt Kotak Mahindra Bank’s earnings this quarter,” said a senior analyst from a leading brokerage firm.
Moreover, the bank’s revenue growth also came in weaker than expected, raising doubts about its ability to deliver strong loan growth going forward. These factors collectively contributed to the negative market reaction.

Analyst Downgrades and Revised Targets

Following Kotak Mahindra Bank’s underwhelming Q4 performance, multiple leading analysts have revised their outlook on the stock, opting for downgrades. Leading brokerages, including BofA Securities, Bernstein, and Nomura India, have revised their target prices for the bank, lowering their expectations based on the weaker outlook for loan growth and rising credit costs.
• BofA Securities lowered its price target for the bank from ₹2,100 to ₹1,900, citing concerns about profitability pressure.
• Bernstein shifted its stance from “Outperform” to “Market Perform,” reflecting a more reserved outlook for the short term.
• Nomura India also revised its price target downward, citing subdued credit growth and rising provisions.
The downgrades reflect widespread skepticism regarding the bank’s ability to maintain strong performance in the face of increasing competition and economic uncertainty.

Rising Credit Costs: A Major Concern

A key concern following Kotak Mahindra Bank’s Q4 results is the rising credit costs, which have been increasing due to a higher provisioning for bad loans. While the bank has managed to maintain a relatively low level of non-performing assets (NPAs) in the past, the surge in provisions suggests that the economic environment is starting to take a toll on asset quality.
“While the bank’s core operations remain robust, the higher-than-expected credit costs are likely to weigh on its profitability in the coming quarters,” noted a senior market strategist.
This is a crucial factor for investors to consider, as it suggests that Kotak Mahindra Bank may face challenges in maintaining its historical profitability, especially if economic conditions worsen or if the bank’s loan book becomes more vulnerable.

Weak Loan Growth Outlook

Another issue highlighted by analysts is the bank’s modest loan growth in the quarter, which has raised concerns about its future prospects. Kotak Mahindra Bank has traditionally relied on strong loan growth to drive its earnings, but with a weaker growth outlook, there are questions about the bank’s ability to sustain its current trajectory.
Analysts believe that the slower loan growth, combined with the rising credit costs, could result in lower-than-expected returns for investors. This is particularly concerning given the competitive nature of India’s banking sector, where other players are aggressively expanding their loan books.

Looking Forward: Can Kotak Mahindra Bank Recover?

While the immediate outlook for Kotak Mahindra Bank seems uncertain, the long-term picture is still relatively positive. The bank has a strong capital base, a diversified portfolio, and a solid reputation for financial discipline. However, it will need to address its rising credit costs and moderate loan growth to regain investor confidence.
Analysts also highlight the importance of macroeconomic factors in shaping the bank’s future performance. A stable economic environment, coupled with effective management of credit risks, could help Kotak Mahindra Bank navigate these challenges and return to growth.

Conclusion: Caution in the Short Term, Potential in the Long Run

In conclusion, Kotak Mahindra Bank’s Q4 earnings miss has sent ripples through the market, with downgrades and revised target prices reflecting a cautious short-term outlook. While credit costs and loan growth remain areas of concern, the bank’s strong fundamentals and management expertise provide a foundation for long-term growth. Investors should carefully monitor the bank’s progress in addressing these challenges and consider the stock’s potential once these issues are mitigated.

 

 

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Rupee Surges to 7-Month High at 83.78/USD Amid Strong Inflows, Trade Optimism

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CRISIL sees strong 12–13% credit growth ahead
Economy - April 17, 2025

CRISIL sees strong 12–13% credit growth ahead

CRISIL sees strong 12–13% credit growth ahead

 

It is anticipated that the expansion of credit will positively impact the banking sector in India. The credit rating agency CRISIL Ratings has predicted a 12–13% increase in bank lending for the fiscal year 2025–2026 (FY26) due to the renewed optimism in the Indian economy. Numerous factors, including reduced interest rates, tax breaks, increased consumption, and loosened regulations, all support this growth forecast.
Compared to the expected 11–11.5% increase in FY25, the projected growth is an improvement, suggesting that India’s financial ecosystem may be about to enter a more expanding phase.

One important catalyst is regulatory support.

The Reserve Bank of India’s (RBI) regulatory relaxation is one of the main factors contributing to this positive outlook. Credit prospects have improved dramatically, especially with the rollback of the 25 percentage point risk weight hike on bank loans to specific Non-Banking Financial Companies (NBFCs), which goes into effect on April 1, 2025. It is anticipated that this regulatory change will increase banks’ capital adequacy and increase lending to NBFCs, which are essential in helping last-mile borrowers.

Increased Consumption as a Result of Tax Benefits

New tax benefits were implemented in the Union Budget 2025–2026, which mostly benefited middle-class and salaried individuals. It is anticipated that these incentives will enhance consumer consumption, which will raise demand for retail loans—particularly home, auto, and personal loans. As per CRISIL’s projection, retail credit—which accounts for approximately 31% of overall bank lending—is anticipated to grow by 13–14% in the fiscal year 2026, marking an increase from the 12% growth expected in FY2025.
Increased discretionary income from lower personal income taxes also helps customers become more creditworthy and encourages them to take up loans for expensive things like homes, cars, and schooling.

Interest rates and monetary policy

A key contributor to the optimistic credit outlook is the Reserve Bank of India’s decision to lower the repo rate by 25 basis points, reducing it to 6%. Monetary accommodation is shown by the central bank’s softer attitude, which lowers borrowing costs for both individuals and companies.
In general, lower interest rates make it more affordable for consumers to get credit and for firms to fund capital expenditures, which increases demand for loans. This rate reduction follows a protracted period of rate increases meant to curb inflation, indicating a change in the central bank’s emphasis to promoting growth.

Sectoral Outlook and Corporate Lending

Corporate credit, which makes up roughly 41% of all bank credit, is predicted to expand by 9–10% in FY26, up from about 8% in FY25, while retail loans are likely to grow consistently. The credit rating agency observes a recovery in private sector investments, especially in capital-intensive industries that significantly rely on institutional financing, like steel, cement, aluminum, and infrastructure.
Increased bank funding is also anticipated to help NBFCs. The RBI’s loosened risk weights will allow banks to fund NBFCs more freely, promoting overall credit expansion after a halt brought on by stricter regulations and increased risk assessments.

Lending to MSME and Agriculture

With the support of government incentives like loan guarantee programs and priority sector lending mandates, as well as strong demand, credit growth to MSMEs is predicted to stay strong at 16–17%.
Depending mostly on monsoon performance, the agriculture sector may have loan growth of 11–12% in the interim. Due to the need for farm inputs, mechanization, and rural consumption, the demand for rural loans will continue to rise if monsoons are typical and crop production stays constant.

Growth of Deposits: A Juggling Act

Mobilizing deposits is one of the main obstacles banks may encounter in maintaining credit development. Deposit growth has been comparatively moderate in FY25 because of restricted systemic liquidity, which is necessary to enable credit expansion.
However, the RBI’s recent liquidity initiatives are starting to relieve some of the pressure on the banking system. As interest rates on deposits progressively rise, deposit growth is anticipated to catch up. Banks can lend sustainably without affecting their credit-deposit ratio or jeopardizing their financial stability if they have a strong deposit base.

Obstacles & Hazards to Come

Even while the outlook is mostly favorable, some domestic and international dangers could nevertheless put doubt on it:
• Uncertainty in the world economy, particularly if developed markets experience financial instability or slowdowns.
• Geopolitical conflicts that might impact oil prices and raise India’s inflation rate.
• Risks associated with credit quality, particularly in the unsecured retail lending market.
• A slower-than-expected increase in deposits, which would limit banks’ capacity to lend.
Notwithstanding these reservations, the Indian economy’s structural strength, together with proactive regulatory actions and financial assistance, instills optimism that the banking industry would continue to grow steadily.

Conclusion

The 12–13% loan growth forecast by CRISIL for FY26 is encouraging for the Indian banking sector and the overall economy. The industry appears well-positioned to lead the next phase of economic expansion because to accommodative monetary policy, retail lending fueled by spending, regulatory flexibility, and a recovery in corporate credit. But sustaining this upward trend will require ongoing attention, particularly in the areas of deposit growth and credit quality.

 

 

 

 

 

 

 

 

 

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Foxconn Plans 300-Acre Hub in North India

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