Policy Pulse - Ministries & Regulators - 12 Oct 2026

The RBI Takes Three State Oil Companies Out of the Dollar Market — and Taxes FX Hedging

The Reserve Bank of India announced a package of measures in circulars dated October 10, operational from October 12, that is the most decisive regulatory defence of the rupee since the 2013 taper-tantrum response. Two components matter for listed companies.

• The RBI will meet the entire daily foreign exchange requirement of Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation from October 12, taking the three state-run oil marketing companies' dollar demand out of the spot market. India imports about 85% of its crude, so these purchases were a constant, predictable source of dollar demand.
• A Foreign Exchange Risk Reserve (FERR): authorised dealers must maintain cash with the RBI equal to 20% of the rupee equivalent of the notional value of each rupee-linked foreign exchange derivative contract above USD 2 million used to hedge current-account exposure where the user purchases foreign currency against the rupee.
• Also in the package: a documentation requirement for users hedging contracted exposures, limits on rebooking cancelled contracts, a corresponding reduction for exchange-traded rupee currency derivatives on recognised exchanges, and an extension of ECB and OFCB concessions to December 31.

The immediate market effect was the rupee's best session since April: up 0.99% to 95.77, after the RBI was seen intervening through dollar sales in both spot and derivatives. The currency is still down about 6-7% this year, and Governor Sanjay Malhotra said last week that it remains undervalued. Banks are asking the RBI for relief and clarity on the hedging rules, which raise the carrying cost of a book they had been encouraged to grow.

September Retail Inflation Hits 5.54%, the Highest Since October 2024

The Ministry of Statistics and Programme Implementation released September CPI on October 12: retail inflation at 5.54%, up from 4.83% in August, the highest since October 2024 and well above the RBI's 4% target. The drivers were food costs, with the base effect turning unfavourable — ICRA had projected September crossing 5.0% on exactly that arithmetic.

• Context matters more than the level: the RBI hiked the repo rate 25 bps to 5.50% on October 7, moved to a "calibrated tightening" stance, and said it expects CPI to average about 5.8% over the next three quarters. September is therefore a print that confirms a stance already taken, not one that forces a new one.
• The transmission channel that matters for equities is the front end and the domestic demand chain, not the index level.

Equity Mutual Fund Inflows Rise 31% and SIPs Print a Record Rs 32,490 Crore

September industry data released on October 12 showed equity mutual fund inflows up 31% to Rs 38,306 crore, with SIP contributions at a record Rs 32,490 crore and debt schemes seeing heavy outflows. On the same day, ICICI Prudential AMC reported Q2 FY27 revenue up 16.3% to Rs 1,673.79 crore with profit up 6.1%.

• A monthly SIP run-rate near Rs 32,500 crore is the domestic bid that has been absorbing foreign selling, and it is a volume event for the whole fund plumbing chain, not just the asset managers.

HCLTech Beats as AI Revenue Accelerates, and TCS Reprices the Hiring Mix

HCLTech reported Q2 FY27 on October 12: consolidated net profit of Rs 5,132 crore, up 21% year-on-year from Rs 4,235 crore and about 11% sequentially; revenue from operations Rs 35,620 crore, up 12% year-on-year; EBIT margin 18.2%, up 131 bps quarter-on-quarter; and new bookings of USD 3.3 billion, up 27% year-on-year, a record first half.

• Advanced AI revenue grew 28.4% sequentially and 78% year-on-year in constant currency. A European Fortune Global 50 client signed an AI-driven workplace and enterprise-network deal worth about USD 1.14 billion over the initial term, entirely net new.
• The board declared a second interim dividend of Rs 12, record date October 16, payment October 26.
• TCS said on the same day that 80% of new hires will have digital and AI skills, with AI-led work above 10% of revenue.

Market Close: Oil and Outflows Take 548 Points Off the Sensex

Indian benchmarks erased opening gains on October 12. The Sensex fell 547.65 points (-0.76%) to 71,924.68 and the Nifty 50 dropped 157.10 points (-0.70%) to 22,363.35, with India VIX up to 15.38 from 14.36. A fresh spike in crude, unabated foreign outflows and rising bond yields were the cited drivers.

• Foreign investors sold Rs 3,568.90 crore of equities on Friday, per exchange data, while domestic institutions bought Rs 4,743 crore — a third consecutive session of domestic support.
• Nifty gainers: Dr Reddy's +2.71%, Bajaj Auto +2.62%, Tata Motors PV +1.63%, BEL +1.56%, BSE +1.31%. Losers: Apollo Hospitals -3.15%, ITC -3.05%, Tech Mahindra -2.85%, L&T -2.05%, Max Healthcare -2.02%. Sensex laggards included ITC, Tech Mahindra, Hindustan Unilever, L&T, SBI and TCS; gainers included BEL, M&M, Kotak Mahindra Bank and HCLTech. The early sector read had Auto +1.30%, Metal +1.14% and Realty +0.94% against IT -0.52%, FMCG -0.44% and PSU Bank -0.77%.
• Commodities: MCX crude closed at Rs 8,879 and MCX gold at Rs 149,680, down Rs 1,819.
• Company items: Technip Energies won an EPC contract from HPCL for a 550 KTA Integrated Hydrocracker and Catalytic Dewaxing unit and an 850 KTA Solvent Deasphalting unit at the Mumbai refinery's Lube Modernization and Bottom Upgradation project. worldsteel said India's steel demand will grow 7.9% in 2026, the fastest among major markets. Emcure Pharmaceuticals approved the merger of two wholly-owned subsidiaries.
• Policy calendar: the Finance Ministry opened the 2027-28 Budget exercise, with pre-Budget meetings running from October 12 to mid-November, and Finance Minister Nirmala Sitharaman held investment talks with global financial leaders in Singapore.