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The Economic Times · "CASH" · 총 30건
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Traders in Reliance Industries Ltd.’s treasury department are strategizing over where to park the company’s cash in case the Reserve Bank of India starts raising interest rates in the coming months.One proposal involves moving Reliance’s cash holdings from liquid mutual funds into short-dated money market instruments, people aware of the conglomerate’s thinking said. The switch may pay off because the yield spread between money-market papers and the benchmark rate has widened beyond its five-year average and is likely to narrow in the coming months, resulting in capital gains, the people said, asking not to be named as the information is private. Markets are currently expecting about 50 basis points of rate hikes this year, they said.Traders also mulled reducing allocation to longer-dated bonds, which tend to be more sensitive to interest-rate changes, the people said.The strategy discussion cited market expectations and the conglomerate didn’t take an explicit view on interest rates. Treasury departments typically consider a range of market scenarios when evaluating trading strategies.“We categorically deny the information you have provided in your email regarding our opinion on interest rates and the behaviour of the rupee,” a Reliance spokesperson said by email.131502003India's Overnight Swaps Reflect RBI Rate HikesThe view carries weight because Reliance runs one of the largest corporate treasuries in India. The discussion also come ahead of the Reserve Bank of India’s rate decision on Friday, where the central bank is expected to announce measures to support the rupee.While most economists — 29 out of 35 — surveyed by Bloomberg News expect the authority to keep the benchmark rate unchanged, they see the RBI adopting a hawkish stance to prepare markets for potential rate hikes later this year amid inflation pressures triggered by an oil price shock.India’s sovereign bond yields have remained broadly stable this quarter even as the rupee has slid to record lows. The currency has recovered in recent days, helped by RBI intervention and optimism that a US and Iran agreement may lead to the reopening of the Strait of Hormuz, a vital route for the country’s energy imports.The rupee is down 6% this year and recently approached a record low of 97 per dollar. It has been hovering around 95-96 levels in recent days.Reliance’s traders expect the rupee to strengthen if a Middle East peace deal is reached and if the RBI takes measures to attract capital inflows, one of the people said. They have proposed that the owner of world’s largest oil-refining complex partly hedge its long-term forward contract positions as well as coupon payments dues in fiscal year starting March 2028, the person said.
The Indian rupee is trading around Rs. 95-96 to the dollar in late May 2026, setting fresh record lows. Markets are openly discussing the Rs. 100 threshold. The rupee has weakened in almost every year since 2014 and has lost approximately half its value against the dollar over that period. The end of this currency depreciation is not in sight. The factors that would stop it are not yet visible.The government is acting. State run oil companies have implemented four fuel price hikes in ten days as of May 25, taking petrol in Delhi past Rs. 102 per litre. This is the right and necessary response to the energy cost reality created by the Iran war. Crucially, the Modi government has also done its part on the macroeconomic front, consistently and aggressively reducing the fiscal deficit as a percentage of GDP to maintain structural stability.Yet, the currency pressure persists. The energy price impact has not yet fully reached Indian consumers and supply chains. It is coming.Uday Kotak said it plainly at the CII Annual Business Summit on May 12: "Be ready for tough times rather than waiting for the shock to hit us." He was right.Also read | Manufactured monopoly: How industrial policy is structuring monopolies in IndiaThis is not a time to panic. But it is a time to act. The leaders who move now will have options. Those who wait will not.The Overriding Factor: The Psychology of the PlayersWhy is the currency declining despite strong domestic fiscal discipline? Because exchange rates are not driven by mathematical models alone. The currency decline is highly affected—and accelerated—by the psychology of all players engaged in this endeavor.Currency movements are deeply behavioral. When a currency visualizes a downward trend, psychology shifts from calculation to self-protection and speculation. Every player in the ecosystem operates under this psychological weight:Corporate CFOs and Treasurers: Instead of hedging normally, they rush to cover future dollar liabilities early, hoarding hard currency and inadvertently worsening the scarcity.Foreign Investors: They begin to judge their returns not by the quality of Indian business operations, but by the eroding value of the conversion rate.Importers and Exporters: Importers advance their payments to avoid paying more tomorrow; exporters delay converting their dollar earnings back into rupees, waiting for a "better" rate. This collective psychology creates a self-fulfilling prophecy.Investors, CFOs, and FDI decision makers extrapolate what is happening now into the future. When they see a currency that has lost approximately half its value since 2014 with no clear floor in sight, their psychological pivot alters market realities.Also read | India tightens checks on overseas flows as currency pressure mounts, sources sayThe cascading timeline of Foreign Portfolio Investor (FPI) equity behavior perfectly mirrors this psychological shift from rational evaluation to systemic risk aversion:2024 (The Calculation Phase): Rupee averages Rs. 83-84. FPI flows remain positive (+$12 billion) as investors trade on strong domestic corporate earnings.2025 (The Self-Protection Phase): Rupee slides past Rs. 89. Collective psychology shifts to risk mitigation. FPIs withdraw a record $18.4 billion from Indian equities—the largest annual equity outflow on record.Early 2026 (The Capitulation Phase): Rupee breaks past Rs. 95. Sentiment turns into an outright exit strategy. In the first four months of 2026 alone, outflows have already reached $19.1 billion, completely bypassing the entire previous year's record loss in a fraction of the time.FDI agreements are being signed, but capital is delayed because players are psychologically hesitant to deploy funds into a depreciating asset.The Trap of Hard Currency Debt: A Broken Business Model There is a highly significant and dangerous phenomenon unfolding in India today that requires immediate exposure. For years, a specific class of Indian corporates adopted a regular strategy of borrowing heavily in hard currency (External Commercial Borrowings, or ECBs). Lured by low nominal global interest rates, several of these companies over borrowed, treating cheap dollar debt as a permanent structural advantage.Today, that strategy has become a trap. The compounding effect of a depreciating rupee, skyrocketing hedging costs, and brutal refinancing realities is fundamentally breaking their business models.Consider the mechanics of this crisis:The Hedging Penalty: Leaving dollar debt unhedged is now corporate roulette. However, buying hedges at current rupee levels has become structurally prohibitive. The cost of protection completely wipes out any interest rate advantage.The Refinancing Wall: Billions in foreign debt are coming due. These over-borrowed companies must now refinance their liabilities at a time when the rupee value has materially deteriorated. They are effectively forced to borrow far more rupees just to pay back the same amount of original dollars.The Crushing Cost of Rupee Capital: As these companies try to pivot back to domestic lenders, they face a severe escalation in their rupee cost of capital.The Growth Verdict: When your cost of capital spikes and your cash flows are consumed by servicing legacy dollar debt, future growth stops. Capital expenditure (CapEx) plans are being frozen. These companies can no longer invest in innovation, capacity, or market expansion. Their business model shifts overnight from aggressive value creation to basic survival. Boards must realize that this is not a temporary treasury headache; it is a structural threat to the company’s future viability.India's forex reserves stand at approximately 10 to 11 months of import cover. Substantial, but being actively deployed to defend the currency. Some imports are non-negotiable: oil, critical inputs, components. These will now cost more. That cost passes through every supply chain.Six Actions for Business Leaders1. Protect your cash and liquidity first. This is the most immediate priority. Map your cash position today. Identify every source of liquidity across the next twelve months. Stress-test it at Rs. 100 and beyond. Which receivables are at risk? Which credit lines are rupee-denominated and which are not? Companies that run into a cash crisis during a currency depreciation cycle lose their options entirely. The CFO must own this analysis and present it to the board within days, not weeks.2. Act now on your foreign currency borrowings, hedging, and refinancing. Do not assume the rupee will recover to Rs. 80. Analyse your full foreign currency exposure across the next three years: every loan, every refinancing date, every hedging contract, every procurement price denominated in foreign currency. Hard currency loans now face refinancing at rupee values that have materially deteriorated. Model every scenario at Rs. 100 and beyond. Your CFO, treasury, and procurement team must be aligned on one instruction: do not run into a liquidity crisis. This analysis must happen now, not at the next quarterly review.3. Build a war room. Most companies have begun thinking about war rooms for supply chain disruptions. Expand the mandate. Currency exposure belongs in the same room. Which of your costs are dollar or euro denominated? Which of your revenues are rupee denominated? Where is the mismatch? What is your break-even exchange rate? If you do not have clear answers today, you are exposed. The war room is not a committee. It is a real-time decision environment with live data, a clear owner, and the authority to act.4. Use the currency depreciation advantage: double your export salesforce. A weaker rupee makes Indian exports more competitive. This window will not stay open indefinitely. Double the salesforce in your export markets now. Use this period to upgrade quality, improve service delivery, and build customer relationships that will last beyond the currency advantage. Indian exporters who invest in capability during this period will emerge stronger regardless of what the rupee does next. Those who simply ride the price advantage without building the underlying business will lose when conditions change.5. Watch your stock and your sector. Banks and financial institutions should already be on high alert. Companies with large foreign currency exposure will see pressure on their financials. Some stock prices are already reflecting this. Go through your sector company by company. Identify who is most exposed. If you are an investor or a lender, this analysis is not optional. The combination of currency depreciation, rising oil prices, and FPI outflows creates a compounding pressure that will surface in earnings before it surfaces in headlines.6. Cut costs aggressively. AI will help. There has never been more urgency to reduce costs than now. And there has never been a better tool to do it. AI can cut most operational costs by as much as 30% across functions: procurement, finance, customer service, logistics, and compliance. McKinsey data confirms companies adopting AI and automation reduce operational costs by 20 to 30 percent. This is not a future opportunity. It is a present imperative. Every rupee of cost removed through AI is a rupee that does not need to be recovered through revenue in a deteriorating currency environment. Start now with your highest-cost functions.The CFO as CaptainCurrency risk is a cash flow risk. Every function that touches foreign currency—procurement, treasury, sales, capex planning— must now report into a single coordinating authority. That authority is the CFO. This is not about hierarchy. It is about clarity. In a currency crisis, fragmented decision-making is as dangerous as wrong decision making. One captain. One consolidated view. Weekly reviews minimum.The Bigger PictureThis currency depreciation is a structural signal, not a cyclical one. India's economy must move from a cheap labour advantage to genuine global value creation.The companies that will survive and thrive are those building products and services that command premium prices in global markets. The rupee's weakness is a reminder that competing on cost alone has limits.The recently concluded trade agreements are a genuine opportunity. Execute them with full force. Build the export pipelines. Add the sales capacity.The businesses that move now, with discipline and clarity, will manage market psychology, navigate the debt trap, and define the next chapter of Indian industry.The shock is coming. Prepare before it arrives.Ram Charan is the author of China’s 90% model. It is restricting India’s industrial progress. Former Director of Hindalco and Muyuan (China).
The recent Supreme Court (SC) judgment on online gaming and betting is expected to have wider implications across gambling, horse racing, and casinos, experts feel. The court clarified that the GST valuation framework is not confined to any one segment but applies across betting and gambling activities.The ruling makes it clear that the tax framework cannot be read narrowly. “Rule 31A… applies broadly to all betting, gambling and horse racing… Limiting its applicability only to horse racing would render parts of the rule otiose,” a PwC India note on the SC ruling said.Nitin Vijaivergia, partner at Pricewaterhouse & Co LLP, said the judgment upholds the imposition of the top GST slab on online gaming platforms, triggering significant retrospective tax exposure. The court’s reasoning also centres on how such transactions are structured. It has been clarified that in betting and gambling, valuation can be based on the full amount staked and not merely on a narrower measure.“Section 15(1)… permits valuation based on the entire stake,” and “merely because a different method of valuation… may also have been possible, it does not render the Rule unconstitutional,” the note added.For online gaming and casinos, the judgment clarifies when tax liability arises. The court held that the taxable event is triggered when players commit funds to participate in games with uncertain outcomes and no longer retain control over those funds.This also alters the treatment of player funds. The ruling notes that once amounts are committed for participation, “such arrangements cannot be considered deposits or entrustments,” and “the entire staked amount is treated as consideration for the supply.”In the case of casinos, the position is very clear. The court held that tax would be levied on each instance of staking money on an uncertain outcome, and not on the operator’s net earnings or gross gaming revenue.“The mention of staking money on ‘uncertain future outcomes’ may have broader implications for promotional and skill contests with deterministic scoring, and similar other formats. Key operational elements such as wallet architecture, re-deposits, and cashback will be crucial to determine tax demands, especially considering amendments to GST Rules 31 and 31B affecting valuation,” Vijaivergia said.Tax experts say that, broadly, the GST law will now apply where money or money’s worth is staked on uncertain outcomes, and such amounts are treated as consideration for the supply.
The shares of Vodafone Idea sharply surged nearly 7% to a new 52-week high of Rs 15.09 apiece on the NSE on Wednesday, even as the Sensex and Nifty crashed, as multiple tailwinds boosted investor sentiment for the telecom major.The stock has rallied 46% in one month and a whopping 121% in one year. The company currently has a market capitalisation of more than Rs 1.62 lakh crore.ICRA upgrades Vodafone Idea’s rating, revises outlookRatings agency ICRA upgraded Vodafone Idea’s rating to A- from its earlier BBB rating and revised its outlook on the company’s long-term fund-based loans worth Rs 727 crore to ‘Stable’ from ‘Positive’. ICRA said that the rating upgrade was driven by a change in rating approach for Vodafone Idea to factor in support from promoter Aditya Birla Group, which was further strengthened with the re‑appointment of Kumar Mangalam Birla as the Chairman of the board and with the proposed equity infusion of approximately Rs 4,730 crore through a preferential allotment of warrants to a promoter group entity in May 2026. “These developments reflect strong confidence in Vi’s potential and long-term growth trajectory. The Aditya Birla Group has expressed its continued support to Vodafone Idea to ensure timely debt servicing and to ensure continuity of operations and improvement in its market position. The Aditya Birla Group has been consistent in providing operational and financial support to Vi and will continue to do so going forward. Further, the Group’s brand equity and market position provided Vi with assistance in Government engagement and higher financial flexibility,” it added.ICRA also highlighted the revision of Vodafone Idea’s adjusted gross revenue (AGR) dues. In May, the Department of Telecommunications (DoT) cut Vodafone Idea's AGR dues by 27% to Rs 64,046 crore as of December 31. This revision significantly alleviates the company’s liability burden and enhances cash flow visibility, the ratings agency said, adding that these will provide a push to the telco’s capex plans.Citi removes ‘High Risk’ rating on Vodafone Idea sharesCiti removed its 'High Risk' rating on the stock and raised its target price to Rs 17, implying an upside potential of more than 20% from the previous closing price. In its latest note, Citi Research changed its rating on Vodafone Idea shares to ‘Buy’ from ‘Buy-High Risk’, citing several tailwinds, including the government’s recent reassessment of AGR dues, rating upgrades, equity infusion by the Aditya Birla Group, and other factors into consideration.The brokerage, however, flagged key risks to its bullish view, including delays in bank funding, intensifying competition that could limit future tariff hikes, continued subscriber churn, and slower-than-expected growth in 4G and 5G users.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
New Delhi: The Enforcement Directorate (ED) has arrested four promoters of a real estate group in connection with a money laundering probe into an alleged Rs 2,004-crore homebuyer fraud that affected more than 19,000 buyers and investors.The accused, Avdhesh Kumar Goel, Rajnish Mittal, Atul Gupta and Vikas Gupta, are promoters/directors of Earth Infrastructures Ltd. They were arrested on June 1 under the Prevention of Money Laundering Act (PMLA), an official statement said on Tuesday.The accused were produced before a special PMLA court in Delhi, which granted the agency five days' custody for interrogation, it said.Read More: Signature Global commits Rs 1,200-1,500 crore for land acquisitions in FY27According to the federal agency, the group collected around Rs 2,004 crore from more than 19,425 homebuyers and investors by promising timely delivery of residential and commercial units and assured returns.The agency alleged that its probe found approximately Rs 467 crore had been diverted or siphoned off through various group entities and related concerns and individuals."Despite receipt of substantial funds from the buyers/investors, the projects were either left incomplete or possession of units was not handed over, thereby causing wrongful loss to the homebuyers and investors," the ED said.The probe further revealed that a part of the alleged proceeds of crime was used for acquisition of movable and immovable assets in the names of various entities and individuals connected with the promoters and directors of the group, it said.The investigation was initiated based on five FIRs registered by the Economic Offences Wing (EOW) of Delhi Police against Earth Infrastructures Ltd, its directors and related entities under various provisions of the Indian Penal Code.The Serious Fraud Investigation Office (SFIO) has also filed a criminal complaint under Section 447 of the Companies Act against the promoters and directors of the group.Read More: Amazon adds 10.6 acres to Mumbai data centre campus in Rs 125 crore dealEarlier in April, the ED had conducted searches at premises linked to the Earth Group across Delhi-NCR.During the raids, the agency seized cash worth about Rs 6.30 crore, jewellery valued at around Rs 8.78 crore and property documents relating to more than 100 immovable properties estimated to be worth over Rs 100 crore.
China is pitching itself as the global fulcrum for the next phase of artificial intelligence and a legion of robotics companies is lining up initial public offerings to test investor appetite.Unitree Robotics, one of the most recognizable names in the industry after its robots practicing martial arts made headlines, on Monday received approval for a listing in Shanghai. Its IPO will serve as an early test for what could be a broader wave of offerings. Hong Kong alone has at least 46 robotics-related companies in the pipeline, more than 10% of applicants, according to a report. Companies that have filed IPO applications include Leju Robotics and Deep Robotics. “Chinese humanoids are one step closer to IPOs, igniting market interest on humanoids in the second half of 2026,” Sheng Zhong, head of China industrials research at Morgan Stanley, wrote in a note. “Funds from most of the Chinese humanoids’ IPOs will go toward R&D, especially robot models.” The deep pipeline of robotics IPOs mirrors the fast rise of China’s AI ecosystem, where an array of listings whipped up an investor frenzy in the past six months. It also aligns with Beijing’s push to shift high-tech industries from innovation to large-scale deployment. China is rushing to set the pace of funding, industrialization and ultimately leadership in what Nvidia Corp. CEO Jensen Huang calls “physical AI.” Shares of OneRobotics (Shenzhen) Co. jumped as much as 18% in Hong Kong on Tuesday, while component maker Leader Harmonious Drive Systems Co. gained as much as 11% on the mainland. 131456136“This is the decade of the robot – and it belongs to China,” Barclays analysts, including Zornitsa Todorova, wrote in a note last month. “This leadership reflects a decade-long, state-guided push.”The firm says China’s robotics roll-out is already unmatched, accounting for 50% of global industrial robots and 85% of humanoids in 2025. Backed by coordinated industrial policy and tight supply-chain control, humanoids could reach about 3.8% of the nation’s labor capacity by 2035, it estimates. Unitree got a nice shoutout from Nvidia’s Huang on Monday, when he showcased his company’s endeavors in robotic AI. The two companies have partnered to build humanoid “reference” machines, featuring five-fingered hands and built-in chips to replace cumbersome “Frankenrobots” in research labs.Some investors remain more cautious, though, when looking at the companies’ fundamentals. Many robotics firms are expected to burn cash for years and concerns are mounting that valuations could run ahead of earnings.A gauge of humanoid robot stocks has fallen about 13% this year, after registering a 47% gain in 2025. ChinaAMC CSI Robot ETF, a major exchange-traded fund tracking robot-related stocks, has seen net fund outflows for most of this year. Valuations were also elevated, with the sector trading at about 40 times forward earnings, compared with about 14 times for the CSI 300 Index, according to Bloomberg-compiled data.“Investors trading at such elevated valuations are typically not driven by long-term fundamentals, but rather by the pursuit of short-term price gains,” said Shen Meng, a director at Beijing-based investment bank Chanson & Co. “It indicates that sentiment is driven more by market dynamics than by conviction or long-term vision.”The state-run China Securities Journal also struck a cautious tone in an editorial published Tuesday, warning that pre-IPO valuations may outpace fundamentals, with many firms still unprofitable, raising the risk of a sharp correction if growth or commercialization disappoints. Still, prospective issuers can look at the performance of China tech IPOs this year, with many listings thousands of times oversubscribed and producing big gains on their debuts. Two of those companies, AI model developers Knowledge Atlas Technology Joint Stock Co. and MiniMax Group Inc. last month gained inclusion in the Hang Seng Tech Index after massive rallies since their January listings. For investors, the robotics companies can also offer a way to benefit from the rapid expansion of a cutting edge industry, said Zhou Nan, founder and investment director of Shenzhen Long Hui Fund Management Co.“With continued advances in AI, the robotics sector is poised for substantial long-term growth,” Zhou said. “Robotics is expected to become a key driver of enterprise value, and progressively complement or replace human labor across a wide range of use cases.”
The shares of Indian IT companies including Infosys, TCS and others continued to record sharp gains on Tuesday, pushing the Nifty IT over 3% higher even as the broader Nifty index slipped into the deep red.The Nifty IT index extended gains for the third consecutive session, jumping around 7% during the period to hit a high of 30,785 on Tuesday. Nifty crashed 3% during the same time to trade below 23,250.Infosys shares gained more than 4% to trade at Rs 1,257.90 apiece in the morning trading hours of Tuesday. The heavyweight IT stock has now gained nearly 9% in just three sessions. The shares of Tata Consultancy Services (TCS) meanwhile jumped around 3.5%.Mphasis and LTI Mindtree shares jumped nearly 3% each, while HCL Technologies, Coforge, Tech Mahindra and Persistent Systems shares jumped around 2% each. Wipro shares were trading in the green with marginal gains.What’s driving the rally in IT stocks?The sharp surge in IT stocks comes after a significant decline earlier this year, following the launch of plug-ins for AI startup Anthropic's Claude Cowork agent, which could automate tasks across legal, sales, marketing, and data analysis. "We call it the ‘SaaSpocalypse,’ an apocalypse for software-as-a-service stocks," Bloomberg quoted Jeffrey Favuzza from the equity trading desk at Jefferies.While analysts continue to debate the future of IT companies following fresh AI advancements, investors were quick to analyse the cheap valuations, leading to some pockets of buying. Nuvama, in its note, had highlighted that the IT sector is setting up for a powerful comeback, not a collapse after the brutal AI-driven selloff.“We see no existential threat from Gen-AI,” the brokerage writes, arguing that enterprises will still need a “system integrator” to customise plug-and-play AI and software tools for their highly complex, brownfield technology stacks and to take ownership when “the system fails at 2 am.”The latest round of buying also comes ahead of the Federal Reserve’s policy meeting next month, which would be the first under Chair Kevin Warsh. US President Donald Trump had selected Warsh partly on expectations that he would support lower borrowing costs to stimulate economic growth. However, rising inflation raised questions over the possibility of lowering rates."Indian IT firms are following suit of American companies like Anthropic and OpenAI by taking up contracts and tie-ups which are perceived as promising by investors," said Gaurav Sharma, head of Research, Globe Capital.Arbind Maheswari from BofA Securities told ET Now that the market globally is attracting flow towards only one story, at the front and centre of it is tech and AI. It is hard to pull away from that fact with a near-term vision. “There are people who believe that the whole business model of Indian IT services is put to question by the AI trade. The other side is that IT services companies will evolve and adapt and they have enough cash flow, they have the resilience, and they have shown this in the past where there were threats that seemed existential for the IT services space. This time obviously it is much bigger and it could last longer but I am sure there is enough that these companies have in them both in terms of depth of management and business models that they can evolve to adapt to the new AI world,” he added.Wipro to acquire additional stake in Aggne Global for $28.5 millionWipro announced that it will acquire an additional 20% stake in US-based insurtech company Aggne Global Inc through an all-cash transaction worth $28.5 million. The company said the transaction is expected to be completed by June 5.Earlier this year, the company acquired Mindsprint for $375 million as part of a broader $1 billion transaction with its parent, Olam Group. It also purchased select customer contracts from US-based Alpha Net Consulting LLC and its subsidiaries for $71 million.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Bengaluru: Electric vehicle maker Ola Electric Mobility on Monday approved the opening of its qualified institutional placement (QIP) and set a floor price of ₹37.74 per equity share for the issue, according to a stock exchange filing.The company's fund raising committee approved the launch of the issue on June 1 and cleared the preliminary placement document for institutional investors. The company may also offer a discount of up to 5% on the floor price in line with Sebi regulations, the filings read.QIP is a way for listed companies to raise money from large institutional investors such as mutual funds, insurance firms, sovereign funds and foreign portfolio investors, without going through a public issue process.The fundraising comes at a time when Ola Electric is navigating slowing sales, market share pressures and continued losses in the electric two-wheeler market. The company on May 14 also announced ₹2,000 crore investment into its wholly-owned subsidiaries focused on electric vehicle and battery manufacturing, as it looks to double down on localisation and vertical integration.Ola reported a consolidated net loss of Rs 500 crore for the fourth quarter ended March 2026, narrowing 42.5% from Rs 870 crore in the year-ago period, aided by lower expenses. In Q3, the company had reported a loss of Rs 487 crore. For the full 2026 financial year, the company posted a consolidated net loss of Rs 1,833 crore compared with Rs 2,276 crore in FY25. Revenue from operations fell sharply to Rs 2,253 crore from Rs 4,514 crore a year ago. Brokerages have also flagged concerns around market share erosion and cash burn. Citi earlier downgraded the stock to and cut its target price, citing persistent challenges to volume growth and rising balance sheet pressures. The company recently reported a recovery in registrations, with May registrations rising to 14,752 units. Ola said the issue price will be determined in consultation with the book running lead managers. “For Q1 FY27, we expect 40,000- 45,000 orders and consolidated revenue of Rs 500-550 crore, nearly double Q4 levels. As volumes recover, we expect the auto business to move towards adjusted operating EBITDA and free cash flow positivity through FY27,” Aggarwal said in its shareholder’s letter. The company’s focus remains on its EV products, particularly electric motorcycles and cell manufacturing, he added. Ola’s shares on Monday closed at Rs 39.53 on BSE, 4.91% lower compared to previous trading session. The QIP announcement was made post market hours.
The National Stock Exchange (NSE) has announced a significant change to trading hours in the equity derivatives segment with the introduction of the Closing Auction Session (CAS) framework.Starting August 3, 2026, the normal market closing time for equity derivatives will be extended by 10 minutes to 3:40 pm from the current 3:30 pm. While the extension is noteworthy, the bigger change lies in how closing prices for eligible securities will be determined.The move aims to ensure a smoother transition between the cash and derivatives markets at the end of the trading day while maintaining consistency in the pricing framework across segments.What is the closing auction session?The CAS is a structured trading window held at the end of the trading day. During this period, market participants place buy and sell orders to determine a single closing price for a security through an auction-based mechanism.Unlike the current system where prices evolve through normal trading until market close, the auction process discovers a fair closing price based on orders entered during the designated session.According to the exchange, CAS will initially apply only to securities in the cash segment that have derivative contracts available. The framework will roll out in phases, and any future expansion will be subject to SEBI guidance and separate operational instructions from the exchange.Why are derivatives trading hours being extended?Although CAS applies only to the equity segment, NSE decided to extend trading hours in the derivatives segment to ensure both markets remain aligned during the closing process.The exchange also clarified that the price bands and pre-trade risk control measures introduced as part of CAS in the cash market will be mirrored in the derivatives segment. This is intended to maintain consistency between the two segments during the closing phase of trading.How will the closing auction session work?The CAS will run for 20 minutes, from 3:15 pm to 3:35 pm. The process will begin with a transition phase between 3:15 pm and 3:20 pm, during which the reference price will be calculated using the volume-weighted average price (VWAP) of trades executed between 3:00 pm and 3:15 pm.Between 3:20 pm and 3:25 pm, participants will be able to enter both market and limit orders. From 3:25 pm to 3:30 pm, only limit orders will be permitted. During this period, market orders cannot be modified or cancelled.The order entry session will close randomly at any point between 3:28 pm and 3:30 pm, after which the auction process will determine the final closing price.How will closing prices be calculated?One key point highlighted by NSE is that there will be no change in the methodology used to calculate closing prices of derivative contracts. The volume-weighted average price (VWAP) used for derivatives closing price calculation will continue to be based on trades executed during the final 30 minutes of trading. However, because market hours are being extended, that 30-minute window will now shift to 3:10 pm-3:40 pm instead of the current 3:00 pm-3:30 pm.For securities eligible for CAS, the closing price in the cash segment will be determined through the auction process.Ashish Nanda, President and Digital Business Head at Kotak Securities summed up the shift by noting that the market is moving from a "continuous trading close" to an "auction discovered close".Under the current framework, closing prices are derived from the VWAP of trades executed between 3:00 pm and 3:30 pm. Under the new framework, closing prices for F&O-eligible stocks will effectively be linked to a 20-minute auction process running from 3:15 pm to 3:35 pm.What happens if a stock is removed from F&O?NSE clarified that eligibility for CAS is linked to the presence of derivatives on the stock. If a security is excluded from the equity derivatives segment on both exchanges, it will no longer be eligible for the CAS.In such cases, the closing price will revert to the existing methodology and be determined using the VWAP of trades executed during the last 30 minutes of trading. However, if the security continues to be part of the derivatives segment on at least one exchange, it will remain eligible for CAS.What happens to pending orders?The exchange outlined operational changes relating to order management. All unexecuted special orders, including stop-loss orders and disclosed quantity orders, will be cancelled. Pending orders that fall outside the revised price band will also be cancelled automatically, and members will receive appropriate cancellation notifications.Why does this matter for traders?For many market participants, the biggest implication is that the final closing price may no longer mirror the last traded price visible on trading screens at 3:30 pm.According to Ashish Nanda, this could require adjustments to trading strategies, particularly for option writers and arbitrageurs who rely heavily on closing prices for valuation, settlement and hedging decisions.While the derivatives market will remain open until 3:40 pm, the broader shift is not simply about extending trading by 10 minutes. It marks a change in how closing prices for eligible securities are discovered, with the exchange moving toward an auction-based mechanism designed to determine a single closing price at the end of the trading day.What happens to existing market timings?Apart from the revised closing time, most trading schedules remain unchanged. The pre-open session in the derivatives segment will continue to begin at 9:00 am and the normal trading session will continue to start at 9:15 am. Similarly, the trade modification window will remain unchanged and continue until 4:15 pm.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
The long wait for the NSE public listing appears to be entering its final stretch. The exchange recently confirmed that it expects to file its draft red herring prospectus (DRHP) by the second week of June, putting the country's most anticipated IPO one step closer to reality.The update has once again sparked interest in NSE's unlisted shares, which continue to change hands actively in the private market. With the DRHP now less than two weeks away, investors may want to know does it still make sense to buy NSE shares before the IPO?The answer from analysts is nuanced. Most experts agree that NSE remains one of India's strongest financial franchises. However, they also caution that investors should not treat the approaching IPO as an automatic opportunity for quick gains.NSE currently trades in the unlisted market at around Rs 1,950-2,050 per share, implying a valuation of roughly Rs 5 lakh crore. That valuation already reflects significant optimism around the company's eventual listing."NSE is clearly one of India's strongest capital-market franchises and remains one of the most awaited IPO candidates. However, investors looking to buy unlisted shares purely because the DRHP filing is close should exercise caution," said Paresh Bhagat, CIO of Veer Growth Fund and chairman of Mangal Keshav."The business quality is not in question. The key risk is valuation and entry price." Bhagat noted that based on FY26 profit after tax of around Rs 10,300 crore, the exchange is already valued at nearly 48-50 times earnings.While NSE enjoys dominant market share, strong profitability and significant cash generation, he believes much of that strength is already reflected in current unlisted market prices. One of the biggest assumptions among investors is that buying shares before the IPO guarantees a profit once the company lists. Analysts say that assumption may not always hold true.The eventual IPO pricing remains unknown. In many large public offerings, companies deliberately leave room for public market investors by pricing the issue below prevailing unlisted market valuations.If that happens, investors entering NSE at current unlisted prices could face limited upside or even temporary mark-to-market losses. "The pre-IPO window should not be seen as a guaranteed arbitrage opportunity," Bhagat said. "If the IPO is priced more reasonably for public-market investors, the gap versus current unlisted prices could be meaningful."Others echo the same concern. "I would avoid buying NSE unlisted shares purely on the expectation of the upcoming DRHP filing," said Arpit Jain, Joint Managing Director at Arihant Capital Markets."While the filing could be an important milestone in the IPO journey, a significant portion of the optimism around the listing is already reflected in the current unlisted market price." Jain pointed to several high-profile IPOs in recent years where strong excitement before listing did not necessarily translate into exceptional post-listing returns.He said investors should focus on valuation, offer pricing, market conditions and the final IPO structure rather than rushing to buy shares simply because the DRHP is approaching.At the same time, few analysts dispute the quality of the underlying business. NSE remains India's largest stock exchange and dominates equity derivatives trading. The exchange reported total income of Rs 18,713 crore and consolidated net profit of Rs 10,302 crore in FY26.Its capital-light business model, strong cash flows and dominant market position have made it one of the most sought-after names in the unlisted market.According to Nitant Darekar, Research Analyst at Bonanza, NSE currently trades at around 45 times FY26 earnings, based on earnings per share of Rs 41.62. While that valuation is not cheap, it remains below some listed peers."NSE remains a capital-light near-monopoly," Darekar said. "At around Rs 1,950-2,170 in the unlisted market, it trades near 45x FY26 earnings. That's rich, but below BSE at around 70x and MCX at around 80x."Darekar added that the recent settlement of the long-running co-location case has removed a major overhang on the IPO process. However, he cautioned that the exchange's earnings remain linked to derivatives trading activity, which can be volatile, especially after regulatory changes in the futures and options segment.He also highlighted another practical consideration for investors. "The urgency is real. Post-DRHP, fresh unlisted purchases face a one-year lock-in. But valuation, not the calendar, should drive the decision."That point is particularly important because many retail investors view the narrowing pre-IPO window as a reason to buy immediately.Ishan Tanna, Senior Associate at Ashika Capital, said history suggests otherwise. "Historically, buying unlisted shares very close to the IPO stage has not always offered the best risk-reward for investors," he said."In many cases, the biggest gains are made when IPO visibility is low and uncertainty is high. Once the DRHP gets filed and listing draws closer, valuations often become expensive as the IPO excitement premium starts getting priced in."Tanna said NSE remains a rare financial infrastructure asset with strong profitability and a dominant position in Indian capital markets, making it attractive for long-term investors.However, investors chasing quick listing gains should recognise that late-stage entry into pre-IPO stories often carries greater risks than many assume.For now, the consensus among market experts is that NSE remains one of India's highest-quality businesses and its IPO will likely attract enormous investor interest. But with the stock already trading at elevated valuations in the unlisted market, investors may need to focus less on the countdown to the DRHP and more on whether the current price adequately compensates them for the risks ahead.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Shares of InterGlobe Aviation, the operator of budget carrier IndiGo, rallied as much as 5% to their day's high of Rs 4,634 on the NSE on Monday despite reporting a net loss of Rs 2,536 crore for the fourth quarter of FY26, compared with a net profit of Rs 3,067 crore in the corresponding period last year. Revenue from operations, however, edged up 1% year-on-year (YoY) to Rs 22,438 crore.The airline said its operational performance during the quarter was affected by disruptions linked to the ongoing conflict in the Middle East. Capacity, measured in available seat kilometres (ASKs), increased 3.4% YoY to 43.6 billion.Passenger traffic stood at 31.6 million during the quarter, marking a marginal decline of 1.1% from a year earlier. EBITDAR, excluding foreign exchange impact, stood at Rs 6,435 crore, down from Rs 6,862 crore in the corresponding quarter last year. The EBITDAR margin narrowed to 28.7% from 31%.IndiGo shares: Should you buy, sell or hold?Goldman Sachs maintained its Buy rating and target price of Rs 5,200, implying an upside of 18% from current levels. The Wall Street major said the airline did not provide full-year FY27 capacity guidance, while elevated costs continue to remain an overhang. Goldman Sachs highlighted that the broader Indian aviation sector, barring IndiGo, continues to face weak profitability and balance sheet stress. The brokerage has retained its valuation at 10x FY28 estimated EV/EBITDAR.Jefferies maintained its Buy rating but lowered its target price to Rs 5,380 (22% upside) from Rs 5,500. The brokerage said the airline delivered a weak but largely in-line performance in the fourth quarter and expects the near-term outlook to remain challenging amid elevated cost pressures. For the first quarter, IndiGo has guided for mid-teen growth in unit revenue, largely driven by higher pricing, with demand so far remaining resilient enough to absorb part of the cost increases. Jefferies believes operating conditions will remain difficult in the near term, though the environment is likely to be even more challenging for peers.Motilal Oswal maintained its Buy rating on IndiGo with a target price of Rs 5,600, implying an upside potential of 27%. The brokerage said that despite near-term challenges from Middle East airspace disruptions, elevated fuel prices, rupee depreciation and higher damp-lease exposure, it remains positive on the airline's long-term growth strategy.It believes IndiGo is well positioned to benefit from India's strong domestic aviation demand and steadily expanding international network. Looking ahead, Motilal Oswal expects a gradual normalisation of international operations, a reduction in Pratt & Whitney-related aircraft groundings, ongoing fleet additions, and the deployment of A321XLR aircraft on international routes to support an earnings recovery.JM Financial maintained its Add rating with a target price of Rs 5,000, noting that capacity growth remained subdued due to the Middle East conflict. IndiGo reported ASK growth of 3.4% year-on-year to 43.6 billion in Q4FY26 and has guided for 3-4% ASK growth in Q1FY27, with most of the increase expected to come from domestic metro and leisure routes.The brokerage expects this, coupled with mid-teen PRASK growth on a favourable base, to support a recovery in unit economics. Capacity was significantly impacted by the West Asia conflict, with around 18% of total capacity affected and more than 160 daily international flights disrupted in March 2026. However, the airline indicated that capacity recovered to around two-thirds of normal levels in May and expects full normalisation by the end of June. JM Financial also highlighted that the number of grounded aircraft remains in the 40s but is likely to decline to the 30s by year-end, which could provide a meaningful boost to both capacity and costs.Elara Capital maintained its Buy rating and target price of Rs 6,020, arguing that the stock's roughly 25% decline over the past six months due to flight disruptions, the Middle East conflict, higher crude oil prices and rupee weakness has created an attractive opportunity. The brokerage believes the market is overly focused on near-term challenges while overlooking the benefits of a prolonged industry-wide capacity shortage.It highlighted that domestic advance fares are up around 17% year-on-year, while international advance fares have risen nearly 40%. Elara also noted that IndiGo reported an adjusted profit of Rs 25 billion in Q4FY26 despite a non-cash foreign exchange loss of Rs 48 billion. Additionally, competitor capacity reductions have been deeper than IndiGo's, supporting the airline's market share gains and pricing power. While the brokerage has lowered its FY27 EBITDA estimate by 7% to account for higher crude oil and rupee assumptions, its FY28 estimates remain broadly unchanged.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
The Comprehensive Economic Partnership Agreement (CEPA) between India and Oman is set to come into force on June 1, marking a significant milestone in bilateral economic relations. Both nations will formally announce the decision on Monday.This marks the fifth free trade agreement (FTA) implemented under the Modi government since 2014. It follows trade pacts rolled out with Mauritius (April 2021), the UAE (May 2022), Australia (December 2022), and the European Free Trade Association (EFTA—comprising Switzerland, Iceland, Liechtenstein, and Norway in October 2025). India has also signed deals with the UK (July 2025) and New Zealand (April 2026), alongside concluding trade talks with the 27-nation European Union (EU) on January 27 this year.CEPA vs FTAModern trade pacts typically span around 20 chapters. These encompass comprehensive regulations across trade in goods, trade in services, investment, intellectual property rights, customs procedures, and dispute settlement mechanisms.Similar bilateral frameworks are also designated as Comprehensive Economic Cooperation Agreements (CECA), Comprehensive Economic Trade Agreements (CETA), or Economic Cooperation and Trade Agreements (ECTA).Also read: India-Oman CEPA to strengthen energy security, trade resilience and export growthIndia-Oman tradeBilateral trade between the two nations reached USD 11.18 billion during 2025-26, up from USD 10.61 billion in 2024-25. India’s exports stood at USD 4.02 billion, while imports from Oman were valued at USD 7.16 billion.In the services domain, India's exports to Oman expanded from USD 397 million in 2020 to USD 665 million in 2024, driven primarily by telecommunications, computer and information, transport, and travel sectors. Conversely, services imports from Oman grew from USD 101 million to USD 197.7 million over the same period, led by transport, travel, telecom, and other business services.What does India gain? The deal unlocks 100% duty-free market access for Indian exports to Oman, covering 98.08% of Oman’s tariff lines, which represents 99.38% of the trade value (based on the 2022-23 average).Immediate Concessions: All zero-duty access comes into effect from "Day One" of the agreement. Currently, only 15.33% of India’s export value (11.34% of tariff lines) enters Oman duty-free under the Most Favoured Nation (MFN) regime.Price Competitiveness: The pact eliminates the current 5% import duty on Indian goods worth USD 3.64 billion.Growth Drivers: Key sectors poised for immediate advantages include textiles, agricultural products, transport equipment, precision instruments, processed food, and gems & jewellery.New Horizons: The agreement unlocks fresh export windows for Indian minerals, chemicals, base metals, machinery, plastic, rubber, automobiles, clocks, instruments, glass, ceramics, marble, and paper.India-Oman CEPA: Key sectoral gainsOman will grant immediate zero-duty access to crucial Indian industrial segments, including:Iron and steelElectrical and industrial machineryMarine products and copper goodsFurthermore, the removal of the 5% tariff is set to directly bolster the competitiveness of Indian vehicles in the Omani market, while securing binding zero-duty access for key finished medicines and vaccines.India protects sensitive sectorsTo insulate local industries and farming communities, India has placed 2,789 tariff lines on its exclusion list.Excluded Categories: Key domestic sectors shielded from tariff concessions include transport equipment, major chemicals, cereals, fruits, vegetables, spices, coffee, tea, and products of animal origin.Manufacturing Safeguards: High-value manufacturing chains including rubber, leather, textiles, footwear, petroleum oils, and mineral-based products remain protected.Agricultural Shielding: Strategic segments such as dairy products, meat, oilseeds, vegetable oils, sugar, and food-processing residues are entirely kept out of the liberalisation purview.Service sector stands to gainWith Oman’s total global services imports standing at USD 12.52 billion in 2024, India’s current share of 5.31% presents significant room for expansion.Oman has made robust commitments regarding the temporary entry and stay of Indian service professionals. Notably, the Intra-Corporate Transferees (ICT) ceiling has been raised from 20% to 50%, allowing Indian firms to deploy a higher volume of managerial and specialist personnel.Additionally, for the first time in any FTA, Oman has locked in specific commitments for professional service providers, benefitting Indian talent in IT, accounting, engineering, medical, education, construction, and consulting fields.Gains for India's agri sectorIndian agricultural exports such as natural honey, potatoes, cashews, boneless meat, and bakery items will secure immediate duty-free entry into Oman.Oman has agreed to dismantle tariffs—which currently range from 5% to 100%—on an array of items. These include cheese, curd, milk, cream, frozen fish, butter, meat, yoghurt, pastries, cakes, chocolate, sugar confectionery, mineral water, alongside animal and vegetable fats and oils.In return, Indian consumers will benefit from cheaper imports of Omani dates, with India granting zero-duty access for up to 2,000 tonnes of the commodity annually. New Delhi is also extending tariff concessions to Oman’s traditional products: Gum Arabica (utilised in food, pharmaceuticals, and cosmetics) and Frankincense (utilised in the incense and perfume sectors).Oman to benefit from tariff concessionsIndia is extending tariff concessions across 77.79% of its total tariff lines (equivalent to 12,556 lines), which encapsulates 94.81% of India’s total imports from Oman by value.For items that hold significant export value for Oman but remain sensitive for domestic industries in India—such as dates, marbles, and specific petrochemical products—liberalisation will be managed via a controlled Tariff-Rate Quota (TRQ) mechanism.India strengthening presence in Middle EastThe Oman CEPA serves as another pillar in India's deepening trade ties with the Gulf Cooperation Council (GCC), following its May 2022 pact with the UAE. New Delhi is set to commence trade talks with Qatar soon, and has already inked terms of reference (TOR) to initiate broader trade pact negotiations with the entire GCC bloc (comprising Saudi Arabia, UAE, Qatar, Kuwait, Oman, and Bahrain).Despite its size, Oman commands vast geopolitical importance as it borders the Strait of Hormuz, a critical maritime chokepoint heavily relied upon by Asian enterprises for oil trade. The nation serves as a strategic gateway for Indian goods and services into the broader Middle Eastern and African markets.Currently, nearly 7 lakh Indian nationals reside in Oman, sending home approximately USD 2 billion in annual remittances. Over 6,000 Indian establishments operate within Oman, and India has clocked USD 615.54 million in foreign direct investment (FDI) from Oman between April 2000 and September 2025. Notably, this CEPA is the first bilateral trade pact Oman has signed with any nation since its agreement with the United States in 2006, cementing its position as India’s third-largest export market within the GCC.
While the midcap index flirts with new peaks, strong corporate earnings have helped cool down previously stretched valuations. Nippon India's Rupesh Patel analyses the resilient Q4 FY26 earnings season, breaking down how a bottom-up investing strategy can help investors uncover reasonable entry points despite building geopolitical and macroeconomic headwinds.Edited excerpts from a chat with Rupesh Patel, Senior Fund Manager - Equity Investments, Nippon India Mutual Fund:Your Nippon India Growth Mid Cap Fund delivered a strong 22% over the last 5 years, beating the benchmark. But given your Growth at Reasonable Price (GARP) philosophy, where are you actually finding "reasonable" valuations in a midcap market that many currently see as overheated?On an aggregate basis, the NSE Midcap 150 index has remained almost flat since September 2024. However, during this period, earnings have grown at a reasonable rate. In fact, midcap as a category has been the most resilient and delivered higher growth compared to other segments of the market. As a result, valuations today, though they appear higher compared to long-term averages, have corrected as compared to where we were in September 2024.Coming to Nippon India Growth Fund, we follow a bottom-up approach to construct the portfolio and buy stocks based on their relative attractiveness on risk-reward equation. Some of the businesses in the category may appear expensive in the near term; however, the size of the opportunity and their ability to maintain earnings growth at a reasonable rate over the long term make them attractive from a medium to longer-term perspective. You are overweight financials and underweight technology in the midcap fund. What's the rationale? How do you think midcap lenders and midcap IT companies are placed at this stage?Our OW stance on financials is on account of our exposure to lenders as well as other beneficiaries of financialization of savings like Life Insurance companies, asset management companies, Exchanges, etc. On the lending side, most of our exposure is to well-capitalised lenders where asset quality is largely expected to hold, Return on Assets/ Return on Equity remains healthy, and valuations are reasonable in the context of the overall market.In IT companies, we have been underweight since the last few quarters, largely owing to the risk of a slowdown in earnings growth on account of current geopolitical uncertainties and the impact of disruptions like AI. Valuations were also a concern till a few quarters back. Going ahead, as the dust settles and some of these companies evolve and adapt to new realities, growth will recover from current lows. Companies in this sector are generally capital efficient and generate free cash flow, making them attractive bets again as valuations turn favourable.Within the midcap space, how do you read the Q4 earnings season? What are your biggest takeaways for investors?Q4 earnings season for midcaps has turned out to be quite resilient, and most companies are delivering on expectations. However, going ahead, risks related to deterioration in the macro environment, cost inflation, and logistics remain relevant. If current geopolitical uncertainties continue, we must be cognizant of these risks and their impact on earnings and valuations. Given the growth trajectory, valuations and earnings, midcap companies are in a sweet spot. Would you agree?If we look at the last few quarters, midcap companies’ earnings have remained resilient. Most of them have delivered healthy earnings growth even in Q4, FY’26. However, aggregate returns of midcap companies as represented by the NSE Midcap 150 index have remained flat since September 2024, resulting in a valuation correction over this period. Further, midcap is a very diverse category with a universe representing multiple sectors and some unique and fast-growing profit pools that have the potential to grow meaningfully over the medium to long term; hence, on a bottom-up basis as well, opportunities exist in this segment of the market. How have you been reshuffling your portfolio to realign it with the realities of war?As mentioned earlier, we remain cognizant of risks arising on account of deteriorating macro conditions, inflation in costs and logistical challenges, if current geopolitical uncertainties persist. We also remain aware of the potential impact of these risks not only on earnings growth but also on market valuations. In some instances, current stock prices may already be reflecting risks of these uncertainties, making the risk-reward favourable. Hence, our approach is to remain aware of valuations and avoid vulnerable businesses.From a 3-5 year perspective, which sectors do you think are best placed at this stage - both from a growth as well as a valuation perspective?We remain positive on Financials, Consumer Discretionary, and select industrials.Within financials, we are positive on lenders as well as companies that benefit from a bigger trend on the financialization of savings. Accordingly, we have exposure to companies in the insurance space, Asset Management Companies, Exchanges and other financial services companies. On lenders, asset quality remains benign, they are well capitalised, generate decent Return on Assets (RoA) and Return on Equity (RoE) and valuations are reasonable.Consumer discretionary companies are likely to benefit from favourable demographics, growth in per capita incomes and trends on premiumization playing out in multiple categories over the medium to long term.On the industrial front, the reason to be positive is on account of various initiatives taken by the government to encourage manufacturing in India. Select companies in Auto ancillaries, Electronics manufacturing, precision engineering and defence-related segments can also do well. However, these are broad sectors, and winners will have to be picked on a bottom-up basis, considering factors like their manufacturing prowess, management strength and cost competitiveness.The midcap index has already hit a new peak this month, ahead of both small and largecaps. What's the reason behind this optimism, and do you see valuation risk building?Although the midcap index is close to an all-time high, its last 20 months' returns have been flat despite midcap companies as an aggregate delivering superior growth. In that sense, valuations today have turned favourable on account of this time correction. Even if we look at the last 3 years' earnings on a CAGR basis, midcap as a category has reported superior earnings growth as compared to broader markets. Going ahead as well, the outlook on midcap companies’ earnings growth continues to remain healthier. In that sense, the performance of the midcap index is largely a reflection of underlying earnings growth. (Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times.)
The unlisted shares of Zepto Limited have fallen nearly 30% over the past month despite the company securing regulatory approval for its IPO, highlighting growing caution among investors amid volatile market conditions.Zepto's shares, which were changing hands at around Rs 52 in the unlisted market a month ago, have dropped to about Rs 40, according to dealers tracking pre-IPO transactions.The decline comes even as the quick commerce startup recently received approval from Sebi to launch its much-awaited public issue. The company had taken the confidential route to file the DRHP but may soon file its papers publicly in June, according to Bloomberg.Analysts said the fall reflects weakness in the unlisted market and a broader reassessment of valuations rather than any company-specific development. The company is being valued at around Rs 38,000 crore in the dealer market.Several companies that had planned public offerings this year have either delayed listings or adopted a wait-and-watch approach because of volatility in equity markets, geopolitical tensions and uncertainty around investor demand.The benchmark Nifty has remained under pressure for much of 2026, while foreign institutional investors have continued to remain cautious on Indian equities amid concerns over crude oil prices, global growth and the earnings outlook.The weakness in the secondary market for pre-IPO shares has also affected several startup names, with investors becoming more selective on valuations after a strong rally in the segment over the past two years.Zepto is preparing for a public market debut that could raise around $1.3 billion, or roughly Rs 11,000-12,000 crore, making it one of the largest internet IPOs since the listing of Swiggy.If the issue proceeds as planned, Zepto could become the youngest venture-backed Indian startup to enter public markets, just four years after its founding.The proposed offering is expected to comprise a substantial fresh issue of around Rs 11,000 crore along with an offer-for-sale component by existing investors.The IPO assumes significance because it comes amid intensifying competition in India's fast-growing quick commerce sector.Zepto competes with Blinkit, owned by Eternal, as well as Swiggy Instamart, Flipkart Minutes and Amazon Now.The listing is also expected to strengthen the company's balance sheet at a time when the quick commerce industry continues to spend aggressively on expansion, dark stores and customer acquisition.As of late last year, Zepto had around Rs 7,000 crore in cash, significantly lower than the roughly Rs 17,000-18,000 crore cash reserves reported by listed rivals Eternal and Swiggy.The company raised $450 million in October last year at a valuation of $7 billion. Following the fundraise, it accelerated customer acquisition efforts through higher discounts and promotional campaigns as competition intensified across major cities.Zepto had also completed its domicile shift from Singapore to India, a move increasingly adopted by venture-backed startups preparing for domestic listings.The company has appointed a consortium of investment bankers including Morgan Stanley, HSBC, Goldman Sachs, Axis Capital, JM Financial, IIFL Securities and Motilal Oswal Financial Services to manage the public issue. The IPO is expected to hit the market in the July-September quarter of 2026.While the recent decline in the unlisted share price may reflect near-term market caution, investors will closely watch the final valuation and broader market conditions when Zepto eventually launches what is expected to be one of the year's most closely watched public offerings.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
India needs to remain watchful on the inflation front as rising fuel prices, a weakening rupee and the risk of a below-normal monsoon threaten to rekindle price pressures, the finance ministry said just days before the Reserve Bank of India's monetary policy decision.In its monthly economic review for May, the Department of Economic Affairs said the economy remains "cautiously resilient", with domestic fundamentals largely holding up despite growing global and domestic uncertainties.Also Read: RBI to hold rates in June; majority now expect hike by year-end: Poll"The confluence of elevated global energy prices, a depreciating rupee, rising upstream cost pressures and the prospect of a below-normal monsoon calls for sustained policy vigilance," the ministry said.The assessment comes ahead of the RBI's Monetary Policy Committee meeting next week, with the policy decision due on June 5. Expectations of a tighter policy stance have increased amid concerns over inflationary pressures and efforts to support the rupee, which touched a record low of nearly 97 against the US dollar earlier this month.While retail inflation remained below the RBI's 4% target in April, the ministry cautioned that wholesale price pressures have accelerated sharply, raising the risk that higher input costs could eventually feed into consumer prices.Producer inflation climbed to a more than three-and-a-half-year high in April as elevated energy prices pushed up manufacturing costs. Data from the Ministry of Commerce and Industry showed the wholesale price index rose 8.30% year-on-year, up from 3.88% in March and well above economists' expectations of 5.50%.Also Read: RBI’s currency printing cost falls 23.5% in FY26 despite rise in cash circulationThe ministry also warned that the fallout from the West Asia conflict poses a significant risk to India's inflation and external-sector outlook, particularly through disruptions to energy supplies."The duration of the Strait of Hormuz disruption remains the 'single most consequential variable for India's external and price outlook'," it said.According to the review, higher crude oil prices, tighter global financial conditions and slowing world growth are creating headwinds for the Indian economy that cannot be fully insulated from external shocks."Policy will need to remain agile across monetary, fiscal, and structural dimensions to navigate this period of compounded uncertainty, external and climatic, while keeping medium-term growth objectives firmly in view," the ministry said.