SIDDHARTH MEHTA,
FOUNDER, AND CIO
OF BAY CAPITAL
“GIVES HIS OPINION ON RBI'S STATEMENT 'DOING WHATEVER IT TAKES”
• The announcements by the Finance Minister yesterday coupled with the
announcements from the RBI today should provide a lot of relief in the face of
the unprecedented situation that the economy and financial markets face
today.
• The specific announcements are extremely positive and address a broad range
of issues. The CRR, Repo rate, and other adjustments address the liquidity side
of the equation.
BAY CAPITAL FOUNDER & CIO, SIDDHARTH
MEHTA
said that the moratorium on all term loans and relief on interest on working capital addresses the
liquidity challenges and the new TLTRO provides for a Rs 1 lakh crore facility whereby banks availing of
this have to in turn use that to invest in CP's and other instruments (and will be classified as HTM), the
liquidity for which has completely dried up.
All in all, these are extremely positive measures and
together with recent announcements add up to an
injection of approximately $50 billion of liquidity.
More than anything else, the commentary from the
Governor about 'doing what it takes' echoes the
comments from the policymakers globally. Other
regulatory adjustments and participation of select
banks in the offshore NDF market are also extremely
positive, Siddharth added further.
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Speaking on the Government of India's measures, Sid Mehta, Bay Capital emphasized that although
the health side of the epidemic relating to the containment of the virus will be extremely important,
in these uncertain and challenging times, these measures are extremely welcome and should be
viewed extremely positively. Moreover, people should have complete confidence that policymakers
in India stand ready to act proactively, as required, to mitigate any adverse effects that may emerge
over time.
Bay Capital Partners is a leading independent Indiafocused investment manager established in 2006. Bay
Capital invests in publicly traded securities in India and
aims to deliver consistent compounding risk-adjusted
returns by investing in a concentrated portfolio of
businesses that are market leaders with moats incredibly
difficult to breach. Bay Capital believes in an ‘equity yield
curve’ where returns increase with time. Bay Capital
investors include large global endowments, foundations,
family offices, and pension funds.