The budget document discusses the challenges facing the Indian economy such as slowing global growth, rural distress, and weak private investment. It highlights key figures from the Union Budget for 2016-17, including a fiscal deficit target of 3.5% of GDP. Expenditure is expected to increase 10.8% while receipts will rise 15.5%. Spending will focus on rural development, social sectors, and infrastructure. The budget aims to boost growth while maintaining fiscal discipline.

1. Budget and Market Outlook
March 2016

2. Union Budget 2016-17

3. The Back Drop- Tougher than last year
CHALLENGES IN
GLOBAL
MARKET
DISCRETIONARY
SPENDING
REQUIREMENT
TOUGH EQUITY
AND BOND
MARKET
CONDITIONS
DEMAND
CHALLENGES IN
DOMESTIC
ECONOMY
• Slow down in global growth from 3.4% in 2014 to 3.1% in 2015
• Contraction in trade activity
• Financial Markets have been battered. MSCI world had fallen ~12% since last budget
(as of 26 Feb 2016)
• Fears over slowdown in Chinese growth and devaluation of Chinese currency
• Fall in oil prices has induced fiscal worries on oil producing nations
• Slowdown in global trade activity leading to contraction in Indian exports demand
• Rural distress due to two consecutive years of bad weather and slow down in
construction
• Capacity under-utilization in manufacturing units and corporate deleveraging leading
tepid private capital spending
• NIFTY fell ~21% since last budget as FII pulled out money and earnings growth has
fallen short of expectations
• Bond yields inched up primarily due to demand-supply mismatch
• Public sector banks in distress requiring capital infusion
• Higher spending requirement on account of Pay and Pension as 2016 happens to the
year of OROP and 7th Pay commission implementation

4. Highlights: Prevented macro instability, focused on growth
Source: indiabudget.nic.in, SBIMF Research; NB: RE – revised estimate, BE- budget estimate
Key Budget Figures
• Union budget stuck to the earlier laid out path of fiscal consolidation thus preventing macro instability. Aims to narrow fiscal deficit to
3.5% in FY17 compared to 3.9% in FY16. Revenue deficit will also be lowered to 2.3%%
• Sticking to fiscal consolidation without losing focus to growth (in terms of rural and infrastructure push) is a huge positive. Central
bank is likely to take the quality and quantity of fiscal stance in positive light opening the possibility of rate cut.
• Budget has avoided any populist measures at large
2014-15 2015-16 RE 2016-17 BE
Budget size (in Rs. Bn) 16,637 17,854 19,780
Expenditure growth (%) 6.7 % 7.3 % 10.8 %
Receipt growth (%) 9.1 % 8.4 % 15.5 %
Gross tax to GDP (in %) 9.9 % 10.7% 10.8 %
Fiscal deficit ( Rs. Bn) 5,107 5,351 5,339
Fiscal deficit ( % GDP) 4.1 % 3.94 % 3.54 %
Revenue deficit (% GDP) 2.9 % 2.5 % 2.3 %
Net market borrowing (Rs. Bn) 4,531 4,406 4,252
Nominal GDP growth (%) 13.6 % 8.2 % 11.0 %

5. Budget in Charts
5.5
6.0 5.7
4.3
3.9 4.0
3.3
2.5
6.0 6.5
4.8
5.9
4.9
4.5
4.1 3.9
3.5
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
-
1,000
2,000
3,000
4,000
5,000
6,000
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16RE
2016-17BE
Fiscal Deficit (Rs. Bn)- LHS Fiscal Deficit (% GDP)- RHS
3.9 4.3 4.3
3.5
2.4 2.5
1.9
1.1
4.5
5.2
3.2
4.5
3.7
3.2 2.9 2.5 2.3
0.9
1.4 1.1
0.0 0.0 0.4
-0.2
-0.9
2.6
3.2
1.8
2.8
1.8
1.1 0.9 0.7 0.3
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16RE
2016-17BE
Revenue Deficit (% GDP) Primary Deficit (% GDP)
Fiscal deficit targeted at 3.5% in FY17 Lowest revenue and primary deficit in last nine years
7 7
21
30
7
-4
23
33
-7
11
36
-4
17 15
9 8
16
9 11
14 14
6
2
15
22 24
16 17
9 8
11
7 7
11
-10
-5
0
5
10
15
20
25
30
35
40
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16RE
2016-17BE
Non-debt Receipts (%) Expenditure (%)
Sharper rise in receipts relative to expenditure
1.5 1.7
2.7
4.5 4.4
5.1
5.6 5.6 6.0 5.8 6.0
1.10 1.32
2.34
3.98
3.25
4.36 4.67 4.54 4.53 4.41 4.25
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16RE
2016-17BE
Gross Market Borrowings (Rs Tn) Net Market Borrowing (RS Tn)
Net market borrowing brought down- a huge positive
Source: indiabudget.nic.in, SBIMF Research

6. Receipts targets looks achievable, barring spectrum windfall
Source: indiabudget.nic.in, SBIMF Research
13
6
11
50
25
18
9 10
12
10
-10
0
10
20
30
40
50
2013-14 2014-15 2015-16 RE 2016-17 BE
% growth
Conservative assumptions in tax growth- can surprise
upward by year end
5,699 6,298
7,419 8,159 9,036 9,475
10,541
2,186 1,217
1,374
1,989
1,979
2,586
3,229
353 369
410
419
515
442
671
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
RE
2016-17
BE
Net tax revenue Non-Tax revenue Non-debt capital receipts
Non tax revenue expected to increase by 644bn, tax revenue
by 1 trillion and non-debt capital receipts by 229bn
228
181
259 294
377
253
0
100
200
300
400
500
600
700
800
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
RE
2016-17
BE
Disinvestment Budgeted (Rs. Bn) Disinvestment Actual (Rs bn)
2016-17 BE= 565 Bn
(inclusive of 205bn strategic
sale)
Credible divestment targets
159
1205
174 189
401
306
560
990
0
200
400
600
800
1000
1200
1400
Telecom Receipts
Optimism in receipts from telecom services

7. Expenditure: Higher revenue spend on account of Pay and Pension
Source: indiabudget.nic.in, SBIMF Research; NB: * Expenditure on Account of Finance ministry, Home ministry and
Defence ministry has been excluded as they mainly capture sticky operating expenses
15 14
10 9 10
7 5
12
25
39
1
5
12
5
21
4
-
10
20
30
40
50
Revenue Expenditure Capital expenditure
% growth
Sharper rise in revenue expenditure on account of
provisioning for 7PC and OROP
DBT platform and lower gas, urea and crude prices helps
contain subsidy bill
1,394
724
300
1,348
700
269
200
400
600
800
1,000
1,200
1,400
1,600
Food Fertilizer Petroleum
2014-15 2015-16 2016-17
Rs BN
Total subsidy bill
expected at 2.5 Tn
vs. 2.6Tn in FY16
Others
31%
Social
26%
Rural and
Agriculture
16%
Fertilisers
9%
Energy
7%
Road
7%
Communications
4%
Expenditure has been focused on Social and Rural sectors*

8. The Budget Agenda
With a realistic approach and without compromising fiscal
prudence
Agriculture and
Farmers’
Welfare
Reviving the
Rural economy
Enhancing
Social Equity
Incentivizing
education and
employment
Infrastructure
push
Financial Sector
Reforms
Ease to do
Business

9. Key Reforms
Renewed thrust on the insolvency and bankruptcy law
Legal framework for dispute resolution in PPP projects
and Utility Contracts
Aims listing of General Insurance Companies
Aims at giving a legal status to Aadhar
FDI Policy Liberalization
Simplification of Taxation Structure
New policy to realize Disinvestment targets

10. Rural Thrust: Bodes well for both Consumption and Investment
Source: Antique Research, SBIMF Research
846
763
859 850
926
1,139
-10
13
-1
9
23
-15.0
-10.0
-5.0
-
5.0
10.0
15.0
20.0
25.0
400
500
600
700
800
900
1,000
1,100
1,200
FY12 FY13 FY14 FY15 FY16RE FY17BE
Spending on Rural oriented schemes (in Rs bn) % growth- RHS
Spend on Rural economy under various schemes is budgeted to grow by 23%
• The Govt. has emphasised to improve rural development. Various rural schemes spread across rural electrification, seeds, crop
insurances, fertilizer, irrigation, employment and housing is expected see a central support of Rs1.1 trillion.
• This is nearly 23% jump compared to last year.
• MGNREGS spend has been increased to Rs. 385bn and the focus will be to develop rural infratsructure.
• 100% village electrification is aimed at by 1st May 2018

11. Extra-Budgetary Sources to support Infrastructure Spending
Source: Axis Capital, SBIMF Research
Rs in (Bn.) FY14 FY15 FY16 RE FY17 BE Growth
FY 16 YOY%
Growth
FY 17 YOY%
Budgeted Capital Expenditure 1877 1967 2377 2470 21 4
Rs in (Bn.) FY14 FY15 FY16 RE FY17 BE Growth
FY 16 YOY%
Growth
FY 17 YOY%
ROADS CAPEX
Provisions in the Budget
236 274 443 550 62 24
Extra Budgetary Support
79 33 280 593 748 112
RAILWAYS CAPEX
Provisions in the Budget
282 316 347 450 10 30
Extra Budgetary Support
257 336 628 760 87 21
Total CAPEX in Roads and
Railways 960 1233 2141 2903 74 36
Capital spending provisions in budget is projected to grow by mere 4%
Extra-budgetary support to Road, Railways and other infrastructure spend will give thrust to Public capex

12. Social sector spend will enable capitalizing demographic dividend
Social betterment with emphasis on health of individuals
New health protection scheme for economically weak
families
Invigorating free supply of generic drugs
Tax incentives to go for health and general insurance
Tax and PF incentives to bring the workforce under formal
employment
Tax incentives and duty assumptions to promote
affordable housing

13. EQUITY MARKET

14. Impact of the Budget on Equity Market
Source: Bloomberg, SBIMF Research
POSITIVE
• Policy Reforms: Allowing 100% FDI in Asset Reconstruction companies, tax clarity on
InvITs and REITs, resolution to deal with stressed asset recovery and bankruptcy code
is an overall positive for the financial sector
• Consumption boost: Likelihood or OROP and Pay commission implementation in
FY17 and focus on increased rural income is positive for consumption oriented
companies
• Rural Thrust: Support to agriculture in the form of seeds, irrigation. crop insurance,
100% FDI in agriculture marketing is positive for agriculture sector oriented companies
• Continued Focus on Public Capex: Thrust on Infrastructure spending continues
particularly on sectors like Roads and Railways – positive for industrials
• No change in LCGT: Budget refrained from decreasing the holding period of Long-
term Capital Gains Tax on listed companies
NEGATIVE
• Lower than anticipated PSU support: The provisioning for Public sector Banks
recapitalization was lower than market expectations.
• Taxation changes: Negative sentiments in some sectors have been mainly due to
marginal rise in tax/cess or additions of sunset clause to currently enjoyed tax
exemptions, tax on dividend income above Rs. 10 lakh

15. FII Outflow and Weak Earnings affecting market
Source: NSDL, Antique, SBIMF Research
FIIs have been pulling money out of India, in line with other
emerging markets
Earnings Outcome has been depressed for five consecutive
quarters
-10000
-8000
-6000
-4000
-2000
0
2000
4000
6000
8000
Feb/13
Apr/13
Jun/13
Aug/13
Oct/13
Dec/13
Feb/14
Apr/14
Jun/14
Aug/14
Oct/14
Dec/14
Feb/15
Apr/15
Jun/15
Aug/15
Oct/15
Dec/15
Feb/16Equity Investment Debt Investment
USD mn
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Jun/10
Oct/10
Feb/11
Jun/11
Oct/11
Feb/12
Jun/12
Oct/12
Feb/13
Jun/13
Oct/13
Feb/14
Jun/14
Oct/14
Feb/15
Jun/15
Oct/15
BSE 100 (ex OMCs YoY earnings growth, %)

16. While Short-term issues are dominating the market,
There are reasons for medium to long-term optimism

17. Corporate Profits expected to improve in FY17
Source: MOSL, SBIMF Research
216 236 272
361 446
540
720
833 820 834
1,024
1,120 1,182
1,339 1,354 1,366
1,643
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16E
FY17E
FY01-08: 21%
CAGR
FY08-15:
7% CAGR
FY15-17E: 10%
CAGR
1%
1%
20%
FY93-FY15:
14% CAGR
Sensex EPS (INR)
3.0
4.7
5.4
6.2
7.3
7.8
5.5
6.5 6.2
4.8 4.6 4.3
4.0 4.0
4.3
4.7
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16E
FY17E
FY18E
Average of
Profit CAGR
FY15-18 of 18%
Corporate profit to GDP
(%)
52
82 83
103
55
95
88
70
64 66
80
70
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16E
Average of 76% for
the period
Corporate profit likely to bounce back Market Capitalization to GDP (%)
Earnings growth likely to show cyclical recovery

18. Domestic money to keep pouring in
Source: NSDL, MOSL, SBIMF Research
Domestic MFs were buyers for sixth consecutive quarter DIIs (ex MFs) have also been net buyers for most months
since 2015
-0.6
-0.5-0.4-0.5
-1.0
-0.2-0.3-0.3
-0.6
0.0
-0.4
0.3
-0.4
-0.7
-0.1-0.1
-0.4
-0.2
-0.6
-0.4
0.0
0.6
0.8
1.1
0.7
1.0
0.3
1.1
0.1
0.70.6
1.5
0.7
1.6
0.9
1.6
1.4
0.1
0.6
Sep-12
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
-1.1
-0.4-0.5
-1.1
-2.3
-1.5
-1.2
-0.2
-1.6
1.5
0.1
0.7
-1.0
-1.4-1.4
-1.2
0.2
0.5
-1.5
-0.7
-0.8
-1.3 -1.4
-0.8-0.9
-0.3
-1.5
-0.3
-1.4
-0.4-0.6
0.4
0.7
0.3
-0.7
0.9
0.10.0
0.7
Sep-12
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
USD bn

19. Market outlook
• Budget outcome has been broadly favorable for the equity market.
While some sectors reacted negatively on account of specific
provisions, the support to the rural economy and increase in
infrastructure spend augurs well for the growth and earnings in the
long run.
• Now that the event is behind us, market will shift back its focus on
global cues, economic data and earnings outcome.
• Global markets have stayed under pressure since the beginning of
CY 2016. With commodity prices particularly crude oil bottoming out,
we expect some stability in the global markets.
• On domestic front, fears about stress in balance sheets of corporate
and banking sector, and quarterly earnings season accentuated the
market woes.
• Valuations, relative to history and to emerging markets, have risen
clearly implying expectations of an earnings recovery in the coming
quarters. We believe the earnings cycle will pick up on the back of a
mean reversion in the economic cycle, rate cuts and policy initiatives.
• By sticking to the fiscal consolidation path, government prevented any
macro instability. India’s macro-fundamentals are currently placed on
a strong footing helped by conscious policy decisions by both RBI and
the government.
• We believe that India is nearing the end of earnings downgrade cycle
and the current stress induced by global events is offering a good
entry opportunity for investors with long horizon.
Market valuations in line with its long period average
Source: Bloomberg, SBIMF Research
7.0
9.0
11.0
13.0
15.0
17.0
19.0
21.0
23.0
25.0
Oct/05
Apr/06
Oct/06
Apr/07
Oct/07
Apr/08
Oct/08
Apr/09
Oct/09
Apr/10
Oct/10
Apr/11
Oct/11
Apr/12
Oct/12
Apr/13
Oct/13
Apr/14
Oct/14
Apr/15
Oct/15
Sensex 1Y fwd PE
Mean: 16x
+1 SD
-1 SD

20. FIXED INCOME MARKET

21. Rates Snapshot for February 2016
• 10 year G-sec rallied on account of favorable budget outcome.
• Money-market rates however, remained worse –off due to tight liquidity conditions
• Crude oil prices moved up by 9% during the month.
• Rupee depreciated by further 1% in February
Source: Bloomberg, PPAC, SBIMF Research; NB: **Crude oil price is average $/barrel for the month, rest of the data
are % month end; *Corporate bond rate is for AAA rated bonds ,*** Refers to PSU Banks CD rate; # INR and Oil price
changes are % change YTD
Rates in % Dec-15 Jan-16 Feb-16 Change YTD (in bps)
1 Yr T-Bill 7.23 7.18 7.25 2
3M T-Bill 7.15 7.24 7.26 11
10 year GSec 7.76 7.78 7.63 -14
3M CD*** 7.20 7.65 8.49 129
12M CD*** 7.70 7.85 8.28 58
3 Yr Corp Bond* 8.34 8.30 8.53 19
5 Yr Corp Bond* 8.40 8.37 8.59 19
10 Yr Corp Bond* 8.42 8.43 8.67 25
1 Yr IRS 7.07 6.87 6.85 -23
5 Yr IRS 6.96 6.72 6.70 -26
Overnight MIBOR Rate 7.03 7.00 6.96 -7
INR/USD 66.2 67.8 68.4 3.4#
Crude Oil Indian Basket** 35.7 28.1 30.5 -14.4#

22. Budget outcome favorable for Bond Market
Supply of government bonds have risen sharply in FY16
Source: RBI, indiabudget.nic.in, SBIFM Research
• Despite RBI sounding accommodative in its monetary policy, bond yields- both state and central government- has inched up marginally
since October 2015.
• The worsening of yields this year could be explained by unfavorable demand supply dynamics. While the supply of bonds and particularly
state bonds have risen sharply in FY16, demand appetite for these bonds by banks (the largest buyer of government securities), mutual
funds and FIIs has been very lack-luster.
• In this respect, central government projecting to lower borrowing in FY17 is positive for bond market. Additionally, government sticking to
fiscal consolidation re-opens the likelihood of a rate cut by the central bank.
• The uncertainty around DISCOM bonds and likelihood of increased state bonds supply are preventing any sustained rally in bond
markets.
0.0
2.0
4.0
6.0
8.0
10.0
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
FY13 FY14 FY15 FY16E
Net Market Borrowings by State Govts (in Rs bn)
Net Market Borrowings by GoI (in Rs. bn)
Net borrowings by Central and State govt (% y-o-y)- LHS
1.10 1.32
2.34
3.98
3.25
4.36
4.67 4.54 4.53 4.41 4.25
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16RE
2016-17BE
Net Market Borrowing (RS Tn)
In this light, lower borrowing by centre in FY17 is a huge
positive

23. Currency: Rupee depreciation in line with emerging markets
Source: Bloomberg, SBIMF Research
Rupee depicted depreciation since start of 2016 in line with most other emerging markets
• Dollar’s broad strength against most currencies globally, fears related to China’s slowing economic growth and a likely further devaluation
of the Yuan has kept the rupee and other Asian currencies under pressure since the start of this year.
• Rupee, along with other emerging markets, depicted depreciation in past two months. By February end, the currency depreciated by 3.3%
despite a marginal appreciation post budget.
-3.3
-30
-25
-20
-15
-10
-5
0
5
MexicanPeso
KoreanWon
ColombianPeso
RussianRouble
IndianRupee
AfricanRand
PolishZloty
TurkeyLira
BrazilReal
TaiwaneseDollar
PhilippinePeso
Chineserenminbi
ThaiBaht
HungarianForint
MalaysianRingitt
IndonesianRupiah
% change in 2015 % change YTD

24. Liquidity tightness in money market lifted the short-term rates
Source: RBI, Bloomberg, SBIFM Research
Tightness in banking system liquidity
• Liquidity conditions tightened since December with advance tax outflows, curtailed government spending (vis-a-vis revenue collection)
and seasonal pick-up in currency demand and credit.
• To mitigate these conditions, the central bank increased the availability of liquidity under LAF and variable rate term repo.
• This helped weighted average call money rate to remain anchored around the repo rate. However, despite these efforts by RBI, the CP
and CD rates –other segments of money market- moved up reflecting dearer short-term money and market expectations that liquidity will
reflect tight for some time.
(3,000)
(2,000)
(1,000)
-
1,000
2,000
3,000
15-Dec-13
15-Jan-14
15-Feb-14
15-Mar-14
15-Apr-14
15-May-14
15-Jun-14
15-Jul-14
15-Aug-14
15-Sep-14
15-Oct-14
15-Nov-14
15-Dec-14
15-Jan-15
15-Feb-15
15-Mar-15
15-Apr-15
15-May-15
15-Jun-15
15-Jul-15
15-Aug-15
15-Sep-15
15-Oct-15
15-Nov-15
15-Dec-15
15-Jan-16
Daily banking system liquidity (in Rs. Billion)
1% of NDTL
-1% of NDTL

25.  RBI’s current policy stance is accommodative. However,
after having delivered 125bps of rate cut between January
to September 2015, the central bank has stayed on hold in
past two monetary policy meeting.
 Evolution of Inflation trajectory and central budget outcome
were pre-requisites cited for any further action.
 We think the budget outcome has been conducive to
deliver more rate cuts.
 Barring the compulsory Pay and Pension increase,
government has stayed away from any populist revenue
spending. Effort to revive rural economy has been largely
through investment spend. Infrastructure- the second key
focus area- is non-inflationary as well.
 The quantity and quality mix of budget outcome is likely to
add to RBI’s confidence in delivering additional 25-50bps
rate cut. Beyond that, the global aspect and evolution of
CPI trajectory will determine any further easing.
Policy Rate Outlook
Source: RBI, CSO, SBIFM Research
-5.00
-4.00
-3.00
-2.00
-1.00
0.00
1.00
2.00
3.00
4.00
5.00
6.50
6.75
7.00
7.25
7.50
7.75
8.00
8.25
8.50
8.75
Jan/12
Apr/12
Jul/12
Oct/12
Jan/13
Apr/13
Jul/13
Oct/13
Jan/14
Apr/14
Jul/14
Oct/14
Jan/15
Apr/15
Jul/15
Oct/15
Jan/16
Real rate (%), RHS Repo rate (%)-LHS

26.  Budget outcome has been taken favorably by the bond market.
The commitment to 3.5% fiscal deficit target opened the
possibility of rate cuts by RBI by as soon as in April. Reduction
in net borrowing by the central bank also helped in marginal
addressing of over-supply situation in the bond market causing
the bond yields to rally by 10-15bps post budget.
 The 10 year bond yield ended the month at 7.63% which is a
marginal positive since the last month (7.78%). Cumulatively
however, the yields have moved up since the last 50bps rate
cut in October.
 The likelihood of further rise in SDL supply and the uncertainty
around UDAY bonds are keeping the bond yields under check.
In this context, the near term movement of rates could largely
be influenced by the further clarity on cumulative state
borrowing numbers.
 In the money market, liquidity conditions tightened at the
margin on account of higher currency withdrawals and
government building its cash balances (implying a lower
expenditure than revenue collections). We expect the RBI to
keep interbank liquidity in reasonable balance over the quarter.
 We have positioned our portfolio in the front-end of the curve
(5-7 year segment) that looks attractive from a valuation
perspective.
Market Outlook
Source: Bloomberg, SBIFM Research
6.00
6.50
7.00
7.50
8.00
8.50
9.00
9.50
Jan/11
May/11
Sep/11
Jan/12
May/12
Sep/12
Jan/13
May/13
Sep/13
Jan/14
May/14
Sep/14
Jan/15
May/15
Sep/15
Jan/16
10 year GSec yield (mth end, %) Repo Rate (mth end, %)
Average spread between G-sec and
Repo in last 5 years: 50bps

27. Thank you

28. Disclaimer
This presentation is for information purposes only and is not an offer to sell or a solicitation to buy any
mutual fund units/securities. These views alone are not sufficient and should not be used for the
development or implementation of an investment strategy. It should not be construed as investment
advice to any party. All opinions and estimates included here constitute our view as of this date and are
subject to change without notice. Neither SBI Funds Management Private Limited, nor any person
connected with it, accepts any liability arising from the use of this information. The recipient of this
material should rely on their investigations and take their own professional advice.
Mutual Funds investments are subject to market risks, read all scheme related documents
carefully.
Asset Management Company: SBI Funds Management Private Limited (A joint venture with SBI and
AMUNDI). Trustee Company: SBI Mutual Fund Trustee Company Private Limited.

29. Contact Details
SBI Funds Management Private Limited
(A joint venture between SBI and AMUNDI)
Corporate Office:
9th Floor, Crescenzo,
C-38 & 39, G Block,
Bandra Kurla Complex,
Bandra (East), Mumbai - 400 051
Tel: +91 22 6179 3000
Fax: +91 22 6742 5687/88/89/90/91
Website: www.sbimf.com
Call: 1800 425 5425
Visit us @ www.youtube.com/user/sbimutualfund
SMS: “SBIMF” to 56161
Email: customer.delight@sbimf.com
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