Rupee almost breaches 96/$ before clawing back

Nidhi Thakur

May 15, 2026

Rupee almost breaches 96/$ before clawing back

Quick Takeaways

• Rupee approached 96 per dollar due to foreign outflows, oil costs, and BoP concerns.

• RBI intervened intraday to curb volatility, but the close remained weaker.

• Possible tax cuts for foreign bondholders could influence capital flows.

• Oil prices, inflation trends, and BoP data will shape the next move.

Rupee Under Pressure: Decoding the Move Near 96/$

Across trading sessions, the Indian rupee edged toward the 96 per dollar level, stirring attention from policymakers, traders, and households. A combination of sustained foreign fund outflows, higher prices for crude oil, and lingering concerns about the balance of payments contributed to the slide. While the move was sharp at times, the intraday recovery shown by the RBI's intervention reminded markets that currency stability remains a priority for the authorities.

The Drivers: Outflows, Oil, and BoP

Foreign money has been shifting away from Indian assets amid broader risk-off sentiment and global rate moves. Such outflows reduce demand for the rupee and press the currency lower as investors convert holdings into dollars.

At the same time, rising oil costs—India's large importer—feed through into the import bill and pressure the current account. Even with robust growth, energy and commodity prices can tilt the macro balance and influence exchange rate expectations. The BoP position remains a focal point for traders tracking the currency's medium-term path.

RBI’s Response and Market Signals

Market participants noted RBI steps that appeared aimed at curbing excessive volatility. The central bank managed liquidity and used its market tools to cushion the fall, helping the rupee claw back from the intraday low. The rally was modest, and the currency ended the session softer than the start, signaling limits to intervention in a volatile environment.

Market Signals and Policy Credibility

Comments from traders and analysts suggest that while the RBI can stabilize price action in the near term, sustained gains depend on clear macro signals and credible inflation management. The currency's resilience will hinge on how policy remains aligned with external developments and how quickly domestic data support a disciplined stance.

Bond Tax Breaks and Global Flows

In market notes, Swastika Investmart analysts point to a mix of oil-driven inflation and persistent outflows as the main drivers of the rupee's weakness. They say policy signals like potential tax cuts for foreign bondholders could influence investor appetites, though much depends on global risk sentiment. The note also highlights that the rupee's path remains highly responsive to oil prices and BoP data.

Beyond these considerations, any policy proposals that could alter foreign appetite for Indian bonds will be watched closely. If the government signals credibility and fiscal support, foreign participation might rise in the debt market, easing some external pressures. Still, markets will test the durability of such measures against evolving global financial conditions.

Implications for Markets and Households

For importers and borrowers with dollar-linked obligations, a weaker rupee translates into higher local-currency costs. Banks may adjust lending rates and hedging costs as currency risk is priced into financial products. Consumers can feel the impact through energy bills and prices for items tied to global commodity prices, even when headline inflation shows signs of cooling.

Exporters could benefit from a softer rupee by converting foreign earnings into more rupees, supporting margins in sectors tied to overseas demand. The real-world outcome, however, depends on how long external shocks persist and how quickly inflation and oil prices settle. In short, currency dynamics add a practical layer to daily financial decisions for households and firms alike.

Conclusion

The near-96 per dollar level is a stark reminder of the balance between external forces and domestic policy. RBI interventions can stabilize sentiment in the short run, but the longer arc will hinge on inflation trajectories, energy prices, and the evolution of foreign capital flows. With BoP data and global market conditions continuing to drive sentiment, investors and watchers will stay tuned to both data releases and policy messaging.

Frequently Asked Questions

Why did the rupee approach 96 per dollar?

A mix of foreign fund outflows, higher oil prices that raise import costs, and concerns about the balance of payments pushed the currency toward the 96/$ level.

How does RBI intervention affect currency moves?

Intervention can stabilize sentiment in the short term by providing liquidity or signaling commitment, but it may not reverse longer-term trends if fundamentals remain weak.

What impact could bond tax breaks have on foreign investment?

Tax incentives could attract more foreign capital into India's debt market, potentially easing external pressures if credibility and policy framework remain solid.

What should investors watch next for the rupee?

Key factors include oil prices, inflation trends, BoP data, and any new policy signals regarding foreign investment in bonds.

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Zaggle Prepaid Ocean Services IPO Details

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Zaggle Prepaid Ocean Services IPO Details

Anubhuti Mishra

September 13, 2023

Zaggle Prepaid Ocean Services Limited is a leading player in spend management with a diversified offering of fintech and SaaS products and services to corporates. Their SaaS platform is designed for (i) business spend management (including expense management and vendor management); (ii) rewards and incentives management for employees and channel partners; and (iii) gift card management for merchants, which they refer to as customer engagement management system (CEMS).

OBJECTS OF THE ISSUE

Expenditure towards Customer acquisition and retention.
Expenditure towards the development of technology and products.
Payment of certain borrowings availed by the company.

Raj P Narayanam

Executive Chairman of the Company. He has been on the Board of the Company since April 30, 2012. He completed post graduate diploma in business management with specialisation in finance from the FORE School of Management, New Delhi. He has experience in the technology and fintech industry.

Hari Priya

Company Secretary and Compliance Officer of the Company. She joined the Company on January 18, 2022. Prior to joining this company, she worked with Axis Clinicals Limited as assistant general manager- company secretary, Gayatri Projects Limited as assistant company secretary and Spandana Sphoorty Financial Limited as deputy company secretary and manager– corporate affairs

Avinash Ramesh Godkhind

Managing Director and Chief Executive officer of the Company. He has been on the Board of the Company since May 7, 2012. He holds a bachelors’ degree in engineering from Bangalore University, and a masters’ degree in business administration from the University of Chicago. Prior to this, he worked as an Assistant Vice President at Citibank N.A., India.

Venkata Aditya Kumar Grandhi

Chief Financial Officer of the Company. He joined the Company as vice president-finance and accounts on May 9, 2022 and was promoted as the Chief Financial Officer on August 25, 2022. He is a member of the Institute of Chartered Accountants of India, New Delhi. Prior to joining this Company, he worked at Spandana Sphoorty Financial Limited.

COMPANY PROFILE

Zaggle Prepaid Ocean Services is a leading player in spend management, with more than 50 million prepaid cards issued in partnership with banking partners and more than 2.27 million users served, as of March 31, 2023’.
The Company’s network of corporate customers (“Customers”) covers the banking and finance, technology, healthcare, manufacturing, FMCG, infrastructure, and automobile industries, among others. The Company has relationships with brands such as TATA Steel, Persistent Systems, Vitech, Inox, Pitney Bowes, Wockhardt, MAZDA, PCBL (RP – Sanjiv Goenka Group), Hiranandani group, Cotiviti, and Greenply Industries.
Its core product portfolio includes i) ‘Propel’ (a corporate SaaS platform for channel rewards and incentives, employee rewards and recognition), ii) ‘Save’ (a SaaS-based platform and a mobile application to offer expense management solution), iii) ‘CEMS’ (a customer engagement management system), iv) ‘Zaggle Payroll’ Card (a prepaid payroll card), and v) ‘Zoyer’ (an integrated data-driven, SaaS- based business spend management platform).

COMPETITIVE STRENGTHS

Differentiated SaaS-based fintech platform, offering a combination of payment instruments, mobile applications, and API integrations.
In-house developed technology and strong network effect.
Business model with diverse sources of revenue and low customer acquisition and retention costs. Diversified customer relationships across sectors along with preferred banking and merchant partnerships.
Seasoned management team with deep domain expertise supported by a professional workforce.

KEY STRATEGIES

Continue to increase the Customer base of corporate accounts, SMB accounts, start-ups and merchants.
Continue to scale and expand by increasing user penetration and cross-selling within the existing Customer base.
Continue to innovate to introduce new products and use cases.
Leverage strategic partnerships with financial institutions and merchants.

KEY CONCERNS

The Company is dependent on their relationships with their banking partners, for a substantial portion of their revenue, which is derived from Program Fees generated from their arrangements with such banking partners.
The Company is dependent on third-party Payment Networks, channel partners, and third-party providers for various aspects of its business and its growth.
It may encounter challenges with the adoption and usage of the products if it is not able to successfully integrate with other software applications.
The Company operates in a highly competitive industry.
It experienced negative operating cash flows in Fiscal 2023 and negative net worth as of March 31, 2022, and March 31, 2021.

COMPARISON WITH LISTED INDUSTRY PEERS (AS ON 31ST MARCH 2023)

There are no directly listed companies in India, or internationally, whose business portfolio is comparable with that of our business and comparable to Zaggle Prepaid Ocean Services Limited’s scale of operations. Hence, it is not possible to provide an industry comparison in relation to this Company.

FINANCIALS (RESTATED CONSOLIDATED)

OUTLOOK & VALUATION

Zaggle Prepaid Ocean Services Limited is a uniquely positioned player in the fintech industry, offering a diversified suite of products and services. The company has a SaaS-based fintech platform and in- house-developed technology. Additionally, the company has diverse sources of revenue and a low-cost operation model.

However, there are some concerns about the company's financial performance. The company has a major dependency on third parties, and it has faced negative cash flow and a decline in its profitability in recent years. Additionally, the company operates in a highly competitive industry.

The IPO is coming at a P/E valuation of 66.6x, which is significantly higher than the valuations of its listed peers. The company's debt-to- equity ratio is also high.

Overall, we believe that the risks outweigh the potential rewards for this IPO. We would avoid investing in this IPO.

DISCLAIMER:

The information contained herein are strictly confidential and are meant solely for the information of the recipient and shall not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written permission of Swastika Investmart Ltd. (“SIL”). The contents of this document are for information purpose only. This document is not an investment advice and must not alone be taken as the basis for an investment decision. Before taking any decision to invest, the recipient of this document must read carefully the Red Herring Prospectus (“RHP”) issued to know the details of IPO and various risks and uncertainties associated with the investment in the IPO of the Company. All recipients of this document must before acting on the given information/details, make their own investigation and apply independent judgment based on their specific investment objectives and financial position. They can also seek appropriate professional advice from their own legal and tax consultants, advisors, etc. to understand the risks and investment considerations arising from such investment. The investor should possess appropriate resources to analyze such investment and the suitability of such investment to such investor’s particular circumstances before making any decisions on the investment. The Investor shall be solely responsible for any action taken based on this document. SIL shall not be liable for any direct or indirect losses arising from the use of the information contained in this document and accept no responsibility for statements made otherwise issued or any other source of information received by the investor and the investor would be doing so at his/her/its own risk. The information contained in this document should not be construed as forecast or promise or guarantee or assurance of any kind. The investors are not being offered any assurance or guaranteed or fixed returns on their investments. The users of this document must bear in mind that past performances if any, are not indicative of future results. The actual returns on investment may be materially different than the past. Investments in Securities market products and instruments including in the IPO of the Company are highly risky and they are generally not an appropriate avenue for someone with limited resources/ limited investment and low risk tolerance. Such Investments are subject to market risks including, without limitation, price, volatility and liquidity and capital risks. Therefore, the users of this document must carefully consider all the information given in the RHP including the risks factors before making any investment in the Equity Shares of the Company.

Swastika Investmart Ltd or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither Swastika Investmart Ltd nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. Swastika Investment Ltd may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject company. We have not received any compensation/benefits from the Subject Company or third party in connection with the Research Report.

CORPORATE & ADMINISTRATIVE OFFICE - 48, Jaora Compound, M.Y.H. Road, Indore - 452 001 | Phone 0731 - 6644000

Compliance Officer: Ms. Sheetal Duraphe Email: compliance@swastika.co.inPhone: (0731) 6644 241

Swastika Investmart Limited, SEBI Reg. No. : NSE/BSE/MSEI: INZ000192732 Merchant Banking: INM000012102 Investment Adviser: INA000009843 MCX/NCDEX: INZ000072532 CDSL/NSDL: IN-DP-115-2015 RBI Reg. No.: B-03-00174 IRDA Reg. No.: 713.

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