The India Cost of Capital Survey 2021 aims to understand the cost of capital that companies use for capital allocation and strategic decision making.
This study is based on the views of 197 respondents, comprised primarily of finance professionals from a mix of Indian and multinational as well as listed and unlisted companies, collected between December 2020 and February 2021.
Research at NSE
For countries experiencing rapid growth, development of a healthy financial sector is critical. As the economy grows, and complexity increases, the financial sector needs to become more efficient at managing resources. In parallel, the eco-system surrounding the growth of the financial markets too need to grow and there needs to be the development of supplementary sources of investment capital.
A critical element of a well-developed financial sector is the contribution of its key components and human resources to the reforms and policy that underpin the development of the industry, by provide quality intermediation and insights to market participants. Growth cannot be lopsided and benefit a section of a society by keep the other at bay. Hence, understanding of the role of the financial sector has increased markedly, but research and insights continue to mount.
At NSE, we have identified 3 focus areas of research to aid the development of an efficient micro-system to continue on the path of growth and financial inclusion, we set as a roadmap of this journey we started in 1994.
Financial Research Initiative
The Effect of Conflict on Lending: Evidence from Indian Border Areas
Author: Mrinal Mishra and Prof. Steven Ongena, University of Zurich
Corporate Governance Initiatives
Quarterly Briefing on: Shares with Differential Voting Rights
Chief Contributor: Bala N Balasubramanian
Latest Macro Review
Q1FY22 GDP rebounds on a low base; retain FY22E at +9.2%
India’s first quarter GDP (Q1FY22) growth expectedly came in at a record-high of 20.1% YoY, aided by an extremely depressed base (-24.4% in Q1FY21). On a sequential (QoQ) basis, however, Q1 GDP contracted by a huge 16.9%, reflecting the extent of disruptions caused by the deadlier second wave, even as the impact was far less pronounced than that seen during the first wave. Implementation of localised, targeted restrictions this time as opposed to a strict nation-wide lockdown the first time helped minimise the loss. That said, the economy has once again fallen below pre-pandemic levels, with GDP in Q1 recording a drop on a two-year as well as three-year CAGR basis. The YoY rebound was primarily on the back of robust expansion in private consumption and investment, even as Government consumption dropped on a high base. Exports outshined in an otherwise deceptive quarter and emerged as the only segment in demand-wise GDP to record a sequential expansion. By economic activity, Gross Value Added (GVA) rose by 18.8% YoY, led by a strong jump in Manufacturing, Construction and Trade, Hotels & Transport, thanks to a low base effect. That said, all these sectors, notably the latter two, recorded a steep QoQ drop amidst reimposition of lockdown restrictions in the quarter gone by.
Latest: Corporate Performance Review
Q4FY21 Earnings Review: Another upbeat quarter; Commodities drive profit upgrades
Corporate performance in Q4FY21 pointed to a strong rebound in sales as well as profitability. Aggregate net sales grew by 15.7%/18% YoY in the March quarter for the Nifty 50/Nifty 500 universe1 the highest in eight quarters, with recovery being broad-based across consumption and investment-oriented sectors, even as annual figures pointed to a modest contraction in FY21. Steady consumption demand post the festive season, easing supply-side bottlenecks, higher commodity prices and a favourable base benefited the top-line growth during the quarter. Profit at the operating level, however, grew by an optically higher 66.1%/60.6% YoY for the Nifty 50/Nifty 500 companies (ex-Financials), albeit off a low base. Savings on administration/marketing and rental expenses as compared to the year-ago period, thanks to adoption of the work-from-home working model by several companies during the pandemic, have partly offset the sharp surge in raw material expenses.