Moving into a new year

The Indian market experienced modest gains, ending a five-day losing streak during the holiday week??. But it remained largely range-bound due to profit booking and the shortened trading week. The Nifty 50 index ended flat, while the broader market underperformed.

On the other hand, the IPO market has seen unprecedented growth, raising Rs 1.8 trillion in 2024, significantly higher than Rs 576 billion in 2023, and is expected to surpass Rs 2 trillion in 2025??. Meanwhile, the Indian Rupee has hit record lows every trading session this week, influenced by a strong USD, a widening trade deficit, and concerns over slowing economic growth. Additionally, India’s gold imports surged to $14.8 billion in November 2024, tripling the previous year's amount, though there are indications of possible double counting being investigated by GoI??.

GST: Tax rate adjustments and clarifications

Recently, the GST Council made several key decisions that impact tax rates and exemptions. A significant change involves the taxation of used electric vehicles (EVs) and old vehicles; on all used EV sales just as non-electric vehicles, it will be taxed at 18% from 12%. The GST will apply to the margin value between the purchase price and the selling price of the used EV??.

Additionally, the council addressed the taxation of popcorn, clarifying that caramel popcorn will be taxed at 18%, pre-packaged and spiced popcorn at 12%, and unpackaged popcorn at 5%. The tax on fortified rice kernels used for public distribution has been reduced to 5%, down from 18%??.

Furthermore, the GST Council has provided exemptions for certain items, such as black pepper and raisins, supplied directly by farmers. Also, penal charges imposed by banks and NBFCs, as well as gene therapy, are all exempt from GST. Payment aggregators that handle payments below Rs 2,000 will also be exempt.

In contrast,??aviation turbine fuel will remain outside the GST framework due to concerns raised by states. The council is also working on easing registration processes for small companies.

India's IPO Boom

India has become Asia's top market for company listings, surpassing China, due to a surge in initial public offerings (IPOs) driven by strong stock prices??. India is set to be the world's second-largest equity fundraising market in 2024, with India's National Stock Exchange leading in primary listing. This shift is partly due to China's regulatory tightening and a rush by companies to capitalise on high valuations in India. While the value of listings in China has decreased significantly, India has experienced a boom, with many companies seeking to raise funds, although deal sizes are smaller. Despite a pullout of $11 billion by foreign portfolio investments in October, the outlook for Indian IPOs remains positive into the new year.

Wrapping it up

The absence of major market-moving events, with most???key events either concluded or scheduled for January, is most likely expected to keep investor participation muted next week.

Source: Live Mint, Economic Times

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