📰NSE Launches Electricity Futures, RBI Will Use Cash Reserve Ratios to Manage Liquditiy, Prestige Bets on Malls

Good afternoon, 

Welcome to the best way to stay up-to-date on India’s financial markets. Here’s what’s in today’s newsletter:

• RBI says it will use cash reserve ratios more frequently to manage liquidity,

• Prestige Estates is betting big on malls,

• and NSE receives SEBI approval to launch electricity futures.

Then, we close with Gupshup, a round-up of the most important headlines.

Have a question you want us to answer? Fill out this form, and you could be featured in our newsletter.

—Shreyas, [email protected]

Market Update.

India’s RBI to Use CRR More Actively to Manage Liquidity.

India’s central bank is set to deploy the cash reserve ratio (CRR) more frequently as a liquidity management tool, marking a strategic shift in how the RBI regulates banking system cash levels and ensures effective transmission of monetary policy.

An active policy tool: Historically, the RBI has adjusted the CRR, the share of bank deposits that must be parked with the central bank, primarily during crisis-like cash imbalances. However, this stance is changing.

This update follows last week’s surprise 100-basis-point CRR cut, implemented in four tranches, reducing the ratio to 3 percent and injecting $29.25 billion (₹2.5 trillion) into the banking system.

RBI Governor Sanjay Malhotra noted at the time that the bank was “comfortable” with the new 3 percent level but offered no further details. The source added that with India’s growing deposit base, the need to maintain CRR at a higher 4 percent threshold for crisis management no longer applies.

Managing excess liquidity: The RBI has infused nearly $100 billion (₹8.5 trillion) into the system between December and May through open market operations (OMOs) and foreign exchange (FX) swaps—its largest intervention over a comparable period. But relying on OMOs can distort bond yields.

Using the CRR as a primary lever instead of frequent bond buys or FX operations could minimize market distortions and better anchor short-term interest rates.

Bringing call rates closer to repo: The RBI is targeting better alignment between overnight call rates, a key operational rate, and the official repo rate, which currently stands at 5.5 percent. Surplus cash in the system had pulled the weighted average call rate significantly below the repo level.

To address this, the RBI may also launch variable rate reverse repo auctions to absorb excess liquidity when needed. This would help restore the repo rate’s role as the true anchor of short-term borrowing costs.

Yield curve sensitivity: The source noted that the RBI is “uncomfortable” with the 10-year benchmark bond yield falling well below present levels, suggesting the central bank is sensitive to a too-easy financial environment that could derail inflation control or hurt fixed-income returns.

Meanwhile, the RBI is drafting a new liquidity management framework, which will shape how CRR, OMOs, and other tools are coordinated. Until finalized, existing liquidity operations will continue.

Prestige Estates Reimagines Indian Malls With Entertainment-Led Strategy Amid E-Commerce Boom.

Prestige Estates Projects, one of India’s top real estate firms by market capitalization and backed by Singapore’s sovereign wealth, is embarking on an ambitious revamp of its mall strategy, betting big on entertainment and dining to win over consumers in the era of online shopping.

The Bangalore-based company plans to increase the share of entertainment and food in its malls to 40 percent of total space, more than double what its older properties offer, while reducing retail space to just 60 percent from the current 85 percent, according to Muhammed Ali, CEO of Prestige’s retail division.

“Shopping can be done from anywhere once you know the brand,” Ali said in an interview. “Entertainment cannot be bought online.”

Pivot to experience-driven malls: The shift comes amid a broader transformation in India’s consumer economy. Rising disposable incomes, a youthful population, and growing urban aspirations are fueling demand for lifestyle and leisure services that cannot be replicated on e-commerce platforms. Mall developers are adapting accordingly, increasingly positioning their properties as destinations for experiences rather than just shopping.

Prestige, which counts global investors BlackRock and Vanguard among its backers, plans to scale up to 15 malls by 2030 across cities like Mumbai, Bangalore, Hyderabad, and Goa, up from four currently. These malls will span a total of 10 million square feet and include not just cinemas and restaurants, but also physical activity spaces and venues for live performances.

The company’s expected rental income from its revamped mall strategy could reach $146 million (₹12.5 billion) annually by 2030, a sixfold increase from FY2025.

Financial pressure, strategic shift: Prestige’s pivot comes at a time of pressure on its core residential business. The company’s net profit fell 62 percent year-on-year in the financial year ended March 2025, its weakest performance in five years. Its stock is down 11 percent over the past 12 months, compared to a 6 percent drop in the broader NSE Realty Index.

Analysts at JM Financial recently warned that India’s booming residential sales may start to cool after years of rapid growth, making it imperative for developers to diversify their revenue streams.

NSE Receives SEBI Approval to Launch Electricity Futures.

The National Stock Exchange has secured approval from the SEBI to introduce monthly electricity futures contracts, a major milestone in India’s bid to strengthen its electricity derivatives market and align with energy sector reforms.

This move follows a similar green light for the Multi Commodity Exchange and reflects growing regulatory momentum toward expanding risk management tools in India’s evolving power sector. The contracts, to be financially settled, aim to provide a hedge against electricity price volatility, improve price discovery, and support capital investments across the entire energy supply chain.

Electricity derivatives to complement spot markets: According to NSE, the electricity futures will function alongside the spot market, helping market participants, from generators to retailers, better manage price risks. Ashishkumar Chauhan, MD and CEO, NSE, described SEBI’s approval as the first milestone in the exchange’s broader vision to develop a complete electricity derivatives ecosystem.

Chauhan added that the exchange plans to roll out more advanced products, including ‘Contracts for Difference’ and longer-term derivatives like quarterly and annual contracts, pending regulatory clearance.

Power market innovation: NSE’s entry into electricity derivatives is backed by a strong pedigree in the power sector. It was the first exchange to establish a dedicated electricity trading platform in India with the launch of Power Exchange India in 2008. NSE believes this experience provides it with a strategic advantage in creating a liquid and integrated market that spans both spot and futures trading.

A recent NITI Aayog report estimates that India will require over $250 billion (₹21.4 trillion) in annual investments until 2047 to meet its climate goals. By 2030, renewables are expected to account for over 50 percent of India’s installed power capacity. In this context, well-functioning electricity derivatives are seen as crucial to attracting the scale of climate finance required.

Electricity futures can help de-risk large investments in renewable energy and grid infrastructure by offering long-term pricing visibility and hedging options for both producers and consumers.

Message from our sponsor.

Finance Headlines, Translated for Humans

Every week, 1440 zooms in on one timely business or finance theme—whether it’s a sudden Fed pivot, an IPO frenzy, or the hidden economics behind AI chips—and unpacks it with crystal-clear analysis. Expect a swift read grounded in hard data: straightforward charts, context that connects the dots, and zero partisan spin. We cut through industry jargon so you gain real insight, not marketing fluff, leaving you informed, confident, and ready to talk markets like a pro—all in one concise email.

Join for free

Gupshup.

Macro

• India’s rising electricity demand is being driven primarily by air conditioning, which now makes up about 20 percent of peak load. ReNew Energy CEO Sumant Sinha also sees potential to export solar panels to the U.S. if tariffs on Chinese products create an opening.

• India’s state-run refiners plan to jointly order 10 domestically built medium-range tankers worth around $600 million (₹51.3 billion) to boost local shipbuilding, though they prefer chartering due to higher costs and have sought government financial support. Deliveries are expected to start by 2028, with Indian Oil owning most vessels.

• India’s government rice stocks surged 18 percent to a record 59.5 million tons as of June 1, while wheat inventories hit a four-year high at 36.9 million tons, far exceeding government targets. These ample reserves position India to boost rice exports and help stabilize wheat prices through increased open market sales.

Equities

• SoftBank-backed e-commerce startup Meesho is reportedly preparing to confidentially file for an IPO in Mumbai in the coming weeks, aiming to raise $700–800 million (₹59.8-69.4 billion), according to sources. Meesho has hired Citigroup, Kotak Mahindra, and Morgan Stanley as advisors. Details are still being finalized and could change.

• Gautam Adani visited Chinese equipment manufacturers, including a solar module maker, in his first overseas trip since facing U.S. legal charges, signaling a continued push in renewables and potential warming of India-China business ties. The visit highlights Adani’s efforts to sustain momentum amid international scrutiny and domestic energy ambitions.

• National Securities Depository plans to launch a $400 million (₹34.2 billion) IPO in July, selling 50.1 million shares through an offer for sale by major investors, with NSDL itself not receiving any proceeds. The listing, managed by ICICI Securities and others, followed regulatory approval last October.

• Mizuho Financial Group is close to acquiring a majority stake in Indian investment bank Avendus Capital, valuing the firm at around $800 million (₹69.4 billion) including debt. The deal would involve buying KKR’s 63 percent stake and possibly shares from minority investors, boosting Mizuho’s presence in India’s growing IPO and M&A market.

• BSE’s shares dropped over 4 percent after being placed under extra surveillance to curb speculative trading, following a 130 percent price surge since March. Analysts say the stock is trading at an unjustified premium given risks in its business model and reliance on external factors.

• Prudential Plc’s Indian asset-management venture, ICICI Prudential Asset Management, is close to filing for an IPO that could raise about $1.2 billion (₹100 billion) and value the firm around $12 billion (₹1 trillion). This potential listing, supported by 17 lead managers, would be one of India’s largest IPOs this year amid a strong rally in Indian equities.

• Indian benchmark indices closed slightly higher on Wednesday, with IT stocks leading gains amid progress in U.S.-India and U.S.-China trade talks, while profit booking in financials limited overall upside. The Nifty 50 and Sensex each rose 0.15 percent, as IT shares extended their winning streak to six sessions.

• Maruti Suzuki’s updated ‘Dzire’ has become the company’s first model to earn a 5-star safety rating under India’s Bharat NCAP, marking a major safety milestone as the automaker pledges to equip all cars with six airbags by FY26.

Alts

• Indian Oil Corp. and Power Finance Corp. canceled planned bond issuances due to rising yield volatility following the RBI's surprise rate cut and liquidity injection. Despite initial optimism, market uncertainty, especially around longer-term debt, prompted issuers to wait for more stable conditions.

• Jio BlackRock Investment Advisers has received regulatory approval to operate as an investment adviser in India, expanding its financial services presence. The 50:50 joint venture between Reliance Industries and BlackRock also got approval to launch a mutual fund business, following investments totaling $7.78 million (₹845 million).

• As traditional donors cut global aid budgets, vaccine alliance Gavi is seeking to broaden its donor base and raise $9 billion (₹769 billion) for 2026–2030, with new contributions from countries like India, Indonesia, and Portugal. CEO Sania Nishtar is also engaging nations like Morocco to join as new donors.

Policy

• India and the U.S. made progress toward an interim trade deal during four days of talks in New Delhi, aiming to finalize the first phase by fall 2025 and boost bilateral trade to $500 billion by 2030. Negotiations focused on tariff cuts, market access, and easing non-tariff barriers.

• India’s central bank cut interest rates and reduced cash reserve requirements to stimulate borrowing and revive investment, particularly in the MSME sector. However, the success of this policy depends on banks increasing lending and businesses feeling confident enough to take on new debt amid economic uncertainty.

See you Thursday.

Written by Eshaan Chanda & Yash Tibrewal. Edited by Shreyas Sinha.

Disclaimer: This is not financial advice or recommendation for any investment. The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.