The rupee strengthened sharply on Wednesday, rising 53 paise to close at 94.38 against the US dollar, supported by foreign currency inflows linked to Reliance Industries’ Jio Platforms IPO and intervention by the Reserve Bank of India (RBI).The recovery came despite pressure from falling domestic equities and elevated crude oil prices, which continued to weigh on the domestic currency amid renewed tensions in the Middle East.At the interbank foreign exchange market, the rupee opened at 94.78 against the dollar and moved between an intraday high of 94.35 and a low of 94.82 before settling at 94.38. The currency had last closed at a comparable level on September 4, when it ended at 94.43.On Monday, the rupee had closed 2 paise lower at 94.91 against the dollar, while forex markets remained shut on Tuesday for Dussehra.“The rupee rose to a six-week high on IPO-driven foreign inflows and a relatively weak US dollar. However, weak domestic markets and elevated crude oil prices capped sharp gains,” said Anuj Choudhary, research analyst at Mirae Asset Sharekhan, as quoted by ANI.Choudhary said the currency could maintain a positive bias if the dollar remained weak and US Treasury yields softened. He pegged the USD-INR spot trading range at Rs 94.20-94.80.Foreign investors typically sell dollars to acquire rupees when participating in domestic IPOs, increasing the supply of dollars in the local foreign exchange market.“Foreign investors participating in large IPOs typically sell dollars to acquire rupees, increasing dollar supply in the domestic foreign exchange market,” said Gaurav Garg, head of research at brokerage platform Lemonn.Garg added that the RBI had also supported the currency through measures aimed at reducing spot-market dollar demand from oil companies and managing excessive exchange-rate volatility.The Rs 30,213-crore Jio Platforms IPO, which opened for subscription on Wednesday, emerged as a key 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, taking overall subscription to 3.16 times, according to exchange data. The total value of bids stood at around Rs 69,800 crore.Qualified institutional buyers led the demand, subscribing to their reserved portion 9.42 times. The non-institutional investor category was subscribed 1.68 times, while the retail portion received bids for 0.73 times the shares reserved for it. The employee and shareholder categories were subscribed 1.37 times and 1.46 times, respectively.
