Rupee Reaches 6-Week Peak, Gains 53 Paise to 94.38 Against Dollar Driven by Jio IPO Inflows and RBI Support
The Indian rupee strengthened significantly on Wednesday, gaining 53 paise to close at 94.38 against the US dollar. This rise was bolstered by foreign currency inflows linked to the Jio Platforms IPO from Reliance Industries and intervention by the Reserve Bank of India (RBI). Despite this recovery, the rupee faced pressure from declining domestic equities and high crude oil prices amid ongoing tensions in the Middle East.
At the interbank foreign exchange market, the rupee opened at 94.78 against the dollar, fluctuating between an intraday high of 94.35 and a low of 94.82 before settling at 94.38. The last comparable closing was on September 4, when the rupee ended at 94.43. On Monday, the currency had closed 2 paise lower at 94.91, while forex markets were closed on Tuesday for Dussehra.
Analysts noted that the rupee’s rise to a six-week high was driven by IPO-related foreign inflows and a relatively weak US dollar. Anuj Choudhary, a research analyst at Mirae Asset Sharekhan, indicated that weak domestic markets and high crude oil prices limited further gains. He projected the USD-INR spot trading range at Rs 94.20-94.80, suggesting that the rupee could maintain a positive bias if the dollar remained weak and US Treasury yields softened.
Foreign investors typically sell dollars to acquire rupees when participating in domestic IPOs, which increases dollar supply in the local foreign exchange market. Gaurav Garg, head of research at brokerage platform Lemonn, mentioned that the RBI also supported the currency by implementing measures to reduce spot-market dollar demand from oil companies and manage excessive exchange-rate volatility.
The Jio Platforms IPO, valued at Rs 30,213 crore, opened for subscription on Wednesday and quickly became a significant source of foreign currency inflows. The issue was fully subscribed within 100 minutes of opening, setting a record for the fastest subscription of a mega IPO in India. By 5 pm, investors had bid for 62.36 crore shares against the 19.75 crore shares on offer, achieving an overall subscription rate of 3.16 times, with total bids amounting to around Rs 69,800 crore. Qualified institutional buyers led the demand, subscribing to their reserved portion 9.42 times, while the non-institutional investor category was subscribed 1.68 times. The retail portion received bids for 0.73 times the shares reserved for it, and the employee and shareholder categories were subscribed 1.37 times and 1.46 times, respectively.
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