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Household debt is on a rising trend with the super prime borrowers borrowing to create assets and the subprime borrowers borrowing for consumption purposes. But dispelling concerns about a built up in bubble , the Reserve Bank of India said that the increase is driven by a growing number of borrowers rather than an increase in average indebtedness in its latest financial stability report released on Monday.At 42.9 percent of the country’s gross domestic product at current market prices in June 2024, India’s household debt is relatively low compared to other emerging market economies. “However, it has increased over the past three years. Even as household debt is on a rising trend, the increase is driven by a growing number of borrowers rather than an increase in average indebtedness” the central bank said.A disaggregated analysis of the nature of individuals’ borrowings shows that loans are primarily used for consumption (personal loans, credit cards, consumer durable loans and other personal loans), asset creation (mortgage loans and vehicle loans and two-wheeler loans) and for productive purposes (agriculture loans, business loans and education loans), according to the report.Borrower-type analysis revealed that subprime borrowers availed loans primarily for consumption purpose, whereas super-prime borrowers used debt for asset creation, especially housing.But the trend may not be worrisome because per capita debt of individual borrowers has increased sharply for super-prime borrowers in the recent period, while it has remained stable for other risk tiers. “ From a debt-servicing capacity perspective, the rise in per capita debt only among highly rated borrowers and use of debt for asset creation are credit positive and financial stability enhancing” the report said.The central bank’s assessment of the quality of Indian household debt assumes significance in the backdrop of a sharp rise in retail borrowings in the banking sector raising asset quality concerns if repayment is hit because of over borrowing and income loss. The Reserve Bank, it may be recalled had imposed higher risk weights on certain retail loans like credit card outstandings and unsecured loans to rein in such lendings by banks and NBFCs.

Electric scooter maker Ather Energy has received approval from the Securities and Exchange Board of India (Sebi) to launch its initial public offering (IPO).The Bengaluru-based company will become the second EV manufacturer in India to go public, following Bhavish Aggarwal-led Ola Electric.The proposed IPO includes a fresh issue of equity shares worth up to Rs 3,100 crore and an offer for sale (OFS) of up to 2.2 crore equity shares by existing shareholders, according to the draft red herring prospectus (DRHP) filed with the regulator in September.The selling shareholders include founders Tarun Sanjay Mehta and Swapnil Babanlal Jain, each offering up to 10 lakh equity shares. Corporate shareholders offloading their stakes are Singapore’s sovereign wealth fund GIC, National Investment and Infrastructure Fund II (NIIF-II), Internet Fund III, 3State Ventures, IITM Incubation Cell, and IITMS Rural Technology and Business Incubator.Individual shareholders Amit Bhatia and Karandeep Singh are also participating in the OFS. Hero MotoCorp, which holds around a 37.2% stake in Ather, will not sell any shares in the IPO.Ather Energy ranks as India’s fourth-largest electric two-wheeler maker by sales volume, trailing Ola Electric, TVS Motor, and Bajaj Auto. In 2024, the company sold around 1,25,569 vehicles, according to data from the government-run Vahan portal.The Hero MotoCorp-backed company has set a valuation target of $2-2.25 billion for the IPO, as reported by ET on September 6.It last raised Rs 600 crore ($71 million) in funding from the NIIF, cruising it into the unicorn club. As reported by ET on August 13, the company had been valued at $1.3 billion, or about Rs 10,900 crore.In June, Ather Energy transitioned into a public limited company as part of its IPO preparations. Despite this, the company’s financials reflect challenges. Its losses widened by over 22% to Rs 1,059 crore in fiscal 2024, while its revenue remained flat at Rs 1,753 crore.As mentioned in the DRHP, Ather plans to utilise the net proceeds from the fresh issue for multiple purposes, including funding capital expenditure to establish an electric two-wheeler (E2W) factory in Maharashtra, investments in research and development (R&D), repayment or prepayment of certain borrowings, marketing initiatives, and general corporate purposes.Founded in 2013, Ather Energy designs and develops electric two-wheelers, battery packs, charging infrastructure, associated software, and accessories. The company also manufactures battery packs and assembles its E2Ws in-house.Ather’s product portfolio includes two lines: the Ather 450 and the Ather Rizta, comprising a total of seven variants.Axis Capital, HSBC Securities and Capital Markets (India) Pvt Ltd, JM Financial, and Nomura Financial Advisory and Securities (India) Pvt Ltd are the book-running lead managers for the issue.

Nifty, on Monday, formed a reasonable negative candle on the daily chart with an upper shadow. Technically, this market action indicates an attempt for a downside breakout of the range movement. This is not a good sign and signals more weakness ahead.The crucial support of the 200-day EMA has been violated again at the 23,700 level amid choppy movement and the opening downside gap of 19th December remains unfilled after seven sessions of its formation. The unfilled opening down gap could be considered a bearish run-away gap, which is normally formed in the middle of a downtrend. Hence, more decline could be in store, said Nagaraj Shetti of HDFC Securities.The short-term trend of Nifty is down and the market is expected to slide down to 23,500-23,400 levels in the short term. Immediate resistance is at 23,800 levels, he added.According to the open interest (OI) data, the highest OI on the call side was observed at 24,000 and 23,800 strike prices, while on the put side, the highest OI was at 23,500 strike price followed by 23,600.What should traders do? Here’s what analysts said:Hardik Matalia, Choice BrokingOn the daily chart, the Nifty index formed a significant bearish candle with a long upper wick, signalling strong selling pressure at higher levels. The index ended the session below the 23,650 mark after experiencing considerable intraday volatility. On the downside, the 23,600 level serves as a critical support. A breach of this level could lead the index toward the 23,500–23,200 zone. Conversely, on the upside, 23,800 is a key resistance, with the next major barrier at 24,000. A sustained close above these levels is essential to negate the current bearish momentum. Given the heightened volatility, traders are advised to remain cautious, use strict stop-loss measures, and avoid holding long positions overnight to manage risks effectively.Rupak De, LKP SecuritiesThe Nifty remained volatile during the session, oscillating between 23,600 and 23,900. On the daily chart, the index has slipped below its recent consolidation. Additionally, it continues to trade below the 200-DMA, indicating weak sentiment. The overall outlook remains negative for the short term, with potential downside risks. On the lower end, support is seen at 23,400, while resistance is expected around 23,870 in the near term.Nandish Shah, HDFC SecuritiesThe broader range for the Nifty has been 23,500-24,000 for the last 5 trading sessions and either side breakout would decide the further trend. However, the positional trend remains down as the Nifty is currently placed below key moving averages.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)