Markets zoom as RBI boosts liquidity

The Big Picture

• The RBI controls interest rate levels in the economy using the REPO rate, which is the rate at which the RBI lends money to the commercial banks. In its October meeting, the RBI kept the repo rate unchanged at 4% and the reverse repo rate unchanged at 3.35% as was widely expected.
• The Cash Reserve Ratio is the fraction of deposits that banks have to keep aside as reserves with the RBI. It’s one of the ways the RBI controls the money supply in the economy. The CRR was maintained at 3%.
• The value of deposits in India grew by 10.5% in the fortnight ended September 25th, 2020 when compared to the same period last year. On the other hand, the value of bank loans in India grew by 5.10% in the same period.
• The India Services PMI increased to 49.8 in September 2020 from 41.8 in August, beating market expectations of 44.7. This signals stabilization in the service sector output, due to the reopening of business units amid easing of restrictions imposed due to Covid-19.

Investing Insights

What is Private Equity? How can you invest in PE?

Private Equity (PE) refers to shares held in a private company that’s not listed on exchanges. The mantra of PE firms is to invest in companies, create value during a short time (4-5 years preferably), and exit by selling shares at the highest profits. PE firms conduct extensive due diligence on a company’s business model, management team, industry dynamics, etc. before investing. They look for businesses that show clear growth potential in the near future.

While PE in India is fairly small compared to the global market, structured Private Equity investments in India by PE firms have been steadily increasing. While investing in private equity isn’t generally available to retail investors due to the high minimum investment that these funds have, it’s still possible to free-ride on the due diligence & expertise of PE funds. To know and understand the world of PE investments, read more here.

Inside smallcase

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The discover section was created keeping in mind our goal of making investing simple for you. On Discover, we have grouped smallcases into Collections based on investment amounts, financial aspirations, sectors, market cap, and returns. You can also use ‘Find your smallcase‘ to find the apt smallcase for your financial goals. Alternatively, you can explore smallcases using several filters like Top Gainers in the Last Month/Year, Recently re-balanced, and preferred investment amounts.

You can also directly search for a particular smallcase of your choice. That being said, if you have an idea, feel free to create your own smallcase and share it with whoever you’d like! 🙂

Go ahead, discover the future of investing with smallcase.

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