🔕 RBI Stays Put as Inflation Hits 6-Year Low

🎉 Good morning, it’s Friday Junior!

Just one sleep till the weekend, but the financial fireworks are already lighting up the sky. From Swiggy’s cash grab to Trump’s tariff tantrums, and a Big Brew that digs into the RBI’s latest move, today’s cup is full-bodied and complex—like a masala chai should be.

Let’s pour it out 👇

🫖 Chai Shots

• 🏦 RBI pauses after aggressive cuts, holds repo rate at 5.5%: After slashing rates by 100 bps in earlier reviews, the RBI decided to hit pause and evaluate impact. Inflation has dipped to 2.1%, the lowest in six years, but the threat of U.S. trade retaliation kept the MPC cautious. More in the Big Brew!

• 🚖 Swiggy to exit Rapido, targets ₹2,500 Cr from stake sale: Swiggy is looking to cash in on its 12% stake in Rapido, which has tripled in value to ~$3B in just a year. With Rapido entering food delivery, Swiggy wants to avoid a turf war and bulk up its own balance sheet.

• 🛢️ Tariff tensions rise over Russian oil trade: Despite Russian crude not being under full sanctions, the US has doubled India’s tariffs to 50%, accusing Delhi of “bankrolling” Moscow’s war efforts. Ironically, India had earlier been nudged by the US itself to buy discounted Russian oil to stabilize global prices. Now, with Russian barrels making up over a third of India’s imports, analysts warn that any cutback could send oil prices soaring—potentially over $200 per barrel.

• 🍽️ Antfin books massive gains on Zomato exit: After offloading its Paytm stake, Alibaba-backed Antfin is set to sell ₹5,375 crore worth of shares in Zomato’s parent, Eternal, via a block deal. The investor, which originally pumped in ₹189 crore back in 2019–20, is now walking away with a whopping ₹13,640 crore—bagging 72x returns.

📈 Market Masala

• 📉 Markets wobble after RBI pause, tariff noise spooks investors: The Sensex dropped 166 points and Nifty slipped 75 as the central bank stayed neutral on interest rates. IT, pharma, and realty stocks led the fall, with investors anxious about tariff headwinds.

• 📉 Rate-sensitive stocks take a hit after no new RBI stimulus: Realty, auto, and consumer companies—usually big winners from rate cuts—saw shares dip after the RBI took a neutral stance. The Nifty Realty index fell 1.5%, while FMCG and auto dropped nearly 1%.

• 🛠️ Kohler mulls rerouting exports post-tariffs: The fixtures giant warned that U.S. trade restrictions could push India-based manufacturing away from North America, possibly favoring Europe or Southeast Asia.

• ✈️ Adani pivots airports into ‘city centers’, eyes ₹20K Cr bet: Adani Airports plans to monetize real estate around terminals with malls, hotels, and offices—especially at Navi Mumbai. The group wants 70% of revenue from non-airline streams by 2030.

• 🪙 Zerodha’s new fund leans 40% into gold and bonds: Zerodha Fund House has launched a Multi Asset Passive Fund of Funds with a unique twist—40% of the portfolio is in gold and G-Secs, aimed at calming portfolio swings. With equal exposure to large- and mid-caps, it’s designed to balance long-term growth with stability, all on autopilot.

• ⚡ Hyundai doubles down on EV localization in India: The carmaker will start local production of EV batteries and powertrains, expanding fast-charging infrastructure sixfold over the next seven years.

🌍 Global Masala

• 📈 Wall Street rebounds as Apple powers ahead: US stocks bounced back Wednesday with the S&P 500 climbing 0.73%, fueled by Apple’s 5% surge after it confirmed a $100 billion boost to US manufacturing. That momentum helped reverse a losing streak for the broader market.

• 🌍 Paytm’s global bets may take 3 years to pay off: The fintech giant is eyeing long-term gains from its global push, focusing on underserved small businesses in international markets. In its latest annual report, Paytm said it expects returns from these efforts to start trickling in by FY28. Meanwhile, it’s also doubling down on insurance and wealth products tailored for India’s grassroots entrepreneurs.

☕ The Big Brew 🏦 RBI Slams the Brakes: Why the Repo Rate Pause Was No Surprise

India’s central bank hit the pause button on Wednesday, keeping the benchmark repo rate steady at 5.5%, after three straight cuts this year. While inflation is well under control and growth is holding strong, global headwinds—including fresh U.S. tariffs—kept the Reserve Bank cautious.

Here’s what’s brewing beneath the neutral tone:

• 🔕 Rate cut fatigue: After slashing rates by a full percentage point in just six months, the RBI wants time to assess how previous cuts are working their way through the system—especially on consumer borrowing and bank transmission.

• 🌍 Tariff tremors: With Trump threatening “very substantial” hikes beyond the existing 25% tariff on Indian goods, the RBI is walking a tightrope. More cuts could weaken the rupee and risk capital flight.

• 📉 Inflation is a non-issue—for now: Retail inflation hit 2.1% in June, its lowest in six years. The RBI slashed its FY26 inflation projection to 3.1%, well below its 4% target.

• 📈 Growth still holding firm: India’s GDP expanded 7.4% in Q4 FY25, closing the year at 6.5% overall. That resilience allowed the RBI to step back and adopt a neutral stance.

• 💱 Rupee relief—but for how long?: The rupee edged up to 87.73/USD after the RBI’s decision, but traders warn that U.S. tariffs could drive it toward 88 next week.

What does this mean?

With inflation in check and growth humming, the RBI has room to act—but it's holding back until the dust settles on global trade tensions. Another rate cut could come later this year, but for now, India’s central bank is choosing patience over panic.

🚀 Startup Scoop

• 💸 Zype locks in ₹90 Cr from Unleash Capital to grow lending ops: The Mumbai-based NBFC has now raised ₹236 Cr since 2022 and plans to double down on digital credit products for young professionals.

• 🎥 Cautio raises $3M to expand AI-powered road safety: The dashcam tech startup, now in 46 cities, plans to use the new funds to scale across logistics fleets and make Indian roads safer via real-time analytics.

• 🥜 Gladful bags ₹8 Cr to expand kids’ nutrition range: The clean-label brand focusing on high-protein snacks and health drinks for children will use the funds to scale D2C and modern trade presence.

• 🛏️ The Sleep Company raises ₹480 Cr to scale comfort-tech play: With ₹700 Cr ARR and 150 stores, the company is going all-in on innovation, offline expansion, and launching new categories beyond sleep—like posture and productivity.

🔮 What’s Brewing Next

• 💸 Swiggy’s possible cash cushion: A full Rapido exit could inject ₹2,500 Cr into Swiggy’s war chest—just in time for the festive-season quick-commerce battle.

🧠 Chai Break Trivia

Did you know: 🏝️ The smallest inhabited island in the world is Just Room Enough Island in New York—barely big enough for a house, tree, and two chairs. Its barely the size of a tennis court!

✌️ That’s a wrap!

If central banks could speak emoji, the RBI just sent us a 🧘‍♂️. While the world scrambles over tariffs and oil politics, India’s keeping its cool—for now. We’ll sip to that.

Catch you tomorrow,
—Masala Chai ☕