# 1 Markets
1.1 Indian markets recovered from an early-week geopolitical shock (US–Iran tensions, crude at $103/bbl) to close last week on a positive note, with the Nifty 50 at 24,354 (+0.7%) and Sensex at 78,494. Domestic buying continues to balance cautious FII sentiment. Outlook remains cautiously bullish, with Nifty upside contingent on breaking current levels, alongside geopolitical and crude price stability.
1.2 US markets rallied sharply to record highs last week as easing Middle East tensions and falling oil prices lifted sentiment, with the Nasdaq 100 (+5.9%), S&P 500 (+4.4%), and Dow (+3.3%) leading gains, driven by mega cap tech. Outlook remains upward but volatile, with focus shifting to key earnings and macro cues to assess rate cut expectations.
1.3 Indian 10-year G-Sec yields rose to 6.90% early in the week on crude-led concerns before easing on improved liquidity and easing geopolitical tensions.
1.4 US 10-year Treasury yields showed high volatility, peaking above 4.40% post CPI shock (3.4% YoY) and settling near 4.25%–4.32% amid safe-haven demand and late-week de-escalation.
# 2 RBI/Banking
2.1 As per CRISIL report on Indian Banks, released last week,
- Gross NPAs expected to remain range-bound at 2.0–2.2% by March 2027, broadly stable vs ~2.0% in March 2026 (near historic low) reckoning West Asia conflict impact.
- Strong corporate balance sheets (low leverage, improved interest coverage)
- Corporate segment (36% of credit):
- NPAs stable at 1.2–1.3%
- Stress test: 23/30 sectors see limited impact; only 1 sector (ceramics) adverse
- Impacted sectors form <7% of rated corporate debt
- MSME segment (19% of credit):
- NPAs may rise modestly to 3.4–3.6% (from 3.2%)
- More vulnerable due to weaker financial buffers and supply-chain shocks
- Stress partly mitigated by government/regulatory support
- Increase is also driven by portfolio seasoning after strong growth (~20% CAGR)
- Retail segment (33% of credit):
- NPAs stable at 1.1–1.3%
- Housing loans (~45%) remain strong (~1% NPAs)
- Unsecured loans (~25%) stabilising; newer vintages performing better
- Early delinquencies require monitoring amid rising household debt
- Agriculture (12% of credit):
- Sensitive to monsoon risk; below-normal rainfall is a concern
Indian banks’ asset quality is expected to remain stable through March 2027, supported by strong corporate fundamentals and policy support, despite moderate stress in MSMEs and external risks.
2.2 IBC Amendment Act, 2026- President assent last week — Key Changes & Impact
- First-filed application fixes the initiation date (no ambiguity across multiple petitions).
- Prevents “clock-resetting” tactics by debtors/creditors
- Strengthens creditor rights and improves legal certainty
- Reduces litigation over timelines
- Extended Look-back Period -Transactions up to 2 years prior to filing can bescrutinised.
- Higher recovery from avoidance of fraudulent/preferential deals
- Deters last-minute asset stripping by promoters
3.Introduction of CIIRP–Creditors can initiate a semi out-of-court resolution with management retained under supervision.
- Faster, lower-cost resolution for viable firms
- Reduces burden on tribunals (NCLT)
- Encourages early intervention before value erosion
- Government duesare no longer treated as secured debt overriding the waterfall.
- Restores predictability in repayment hierarchy
- Protects secured creditors’ priority
- Improves credit discipline and lending confidence
- Conditional withdrawal of insolvency allowed – Limited reversal of voluntary liquidation permitted
- Enables revival of genuinely recoverable businesses
- Prevents misuse of late-stage withdrawals
- Balances flexibility with process integrity
- Monetary penalties (₹1 lakh–₹2 crore) introduced for malicious/frivolous filings.
- Discourages misuse of IBC as a pressure tactic
- Protects firms from harassment
- Improves tribunal efficiency
The 2026 amendments sharpen the insolvency framework into a faster, more predictable, creditor-driven system, albeit with reduced flexibility for debtor recovery.
2.3 As per Transunion CIBIL report released last week
- Women’s outstanding credit rose 5x to ₹76 lakh crore by 2025, now 26% of total system credit.
- Women’s credit access increased from 19% (2017) to 36% (2025); borrower base grew at ~9% CAGR.
- ~25% of credit now for business use; share up from 16% → ~25%, indicating rising income-generating borrowing.
- Personal loans still dominant but easing: Share declined from 77% → 71%.
- Outstanding business loans up 7.5x (working capital, expansion, etc.).
- Retail loans grew to 4.5x; microfinance lagged (2.9x) amid sector stress.
- Growth is not concentrated in one segment; reflects widening inclusion.
Women’s credit is shifting from consumption to enterprise at scale, positioning them as a pivotal engine of both financial inclusion and future economic growth.
2.4 CRISIL and CareEdge released report on Securitisation in FY26 in India.
India’s securitisation market reached an all-time high of ₹2.55 lakh crore in FY26 — more than double the ₹1.13 lakh crore recorded in FY22 — signalling the market’s permanent integration into NBFC funding strategy.
Key changes observed in the report:
- NBFC-originated deals surged from 74% → 97% of total market; bank originations collapsed from 26% → 3%, almost entirely driven by HDFC Bank’s post-merger pullback.
- Gold-backed securitisation jumped from negligible → 15% of market (second only to vehicle loans), driven by 94% YoY growth in gold loan disbursements in Q3 FY26 and rising gold prices.
- MFI’s PTC share jumped from 30% → 69% in one year as investors, burned by a near-doubling of gross NPAs in FY25, demanded credit enhancements before re-entering.
- PTC share reached 60% of all deals, reflecting broader investor preference for structured protection amid uneven asset quality.
Outlook
- Securitisation is now a core NBFC funding tool, not a fallback — particularly after RBI raised risk weights on bank lending to NBFCs in Nov 2023.
- Banks remain the primary buyers, incentivised by dual benefit: Priority Sector Lending (PSL) compliance plus yield — superior to buying PSL Certificates which offer compliance only.
- One institution’s balance sheet decision (HDFC Bank) swung the entire bank origination share. Originator count grew 175 → 190+, and top 20 share fell 71% → 65%, but depth remains limited.
- India’s regulatory framework — banning re-securitisation and synthetics — keeps the market anchored in granular, performing retail loans. No CDO-like structures exist
India has built a ₹2.55 lakh crore loan bazaar that is maturing in structure and broadening in participation — but its true test will be whether it can reduce single-institution dependency and build secondary market liquidity before the next credit stress cycle arrives
# 3 SEBI
3.1 SEBI issued circular last week on Ease of Fundraising for Social Stock Exchange (SSE)
- SEBI extended the registration validity for Not-for-Profit Organizations (NPOs) on the SSE to three years (up from two).
- Crucially, the minimum subscription requirement for Zero Coupon Zero Principal (ZCZP) instruments was reduced from 75% to 50% for specific projects.
This provides much-needed flexibility for NPOs facing regulatory delays or project-specific funding hurdles. By lowering the “all-or-nothing” threshold, SEBI ensures that social projects can still kick off even if they don’t hit the full funding target, provided the funds are still “meaningfully deployable.”
3.2 Buy backs by Corporates – interesting judgement.
Background
- Delhi High Court examined whether share buybacks below fair market value (FMV) create taxable “income” for the company. Case arose from a dispute involving Globe Capital Market, where tax authorities argued that the price differential constitutes deemed profit.
Key Judgement
- Buybacks are capital restructuring (capital reduction), not asset acquisition.
- Shares, once bought back, are extinguished under Companies Act, 2013—hence no asset remains to generate income.
- The tax department’s view that FMV–buyback price differential = income was held “flawed and untenable.”
- Therefore, no taxable income arises from buybacks below FMV.
Impact / Implications
- Removes potential tax leakage → lowers effective cost of buybacks for companies.
- Reinforces distinction between capital transactions vs income-generating transactions.
- Aligns tax treatment with economic substance—buybacks seen as return of capital, not profit generation.
The ruling firmly aligns tax treatment with economic reality—recognising share buybacks as capital restructuring rather than income generation, thereby removing an artificial tax burden on corporate capital allocation.
# 4 Economy
4.1 As per IMF release, India has slipped to the sixth rank in 2025 (FY26) and 2026 (FY27), falling behind the UK after claiming the fifth position for three straight years.
What changed?
- India revised its GDP base year (2011–12 → 2022–23), leading to a downward adjustment (≈2.8%–3.8% for recent years) due to improved methodology and correction of overestimation.
- The rupee depreciated by ~10% in FY26, lowering GDP in US dollar terms.
- IMF therefore revised GDP projections downward across years (e.g., 2027 estimate reduced from ~$4.96T to ~$4.58T).
What changed in projections and rankings?
- Earlier outlook:
- India was expected to overtake Japan in FY27
- Overtake Germany by FY30
- Remain ahead of the United Kingdom
- Revised outlook:
- India temporarily slips behind the UK and Japan (6th position)
- Milestones (4th and 3rd rank) are deferred by ~1–2 years, not cancelled
- India is still projected to become the 4th-largest economy by FY28 and 3rd-largest by ~2031
Why did ranking slip?
- Statistical revision: Lower nominal GDP after base recalibration
- Currency effect: Rupee depreciation reduces USD valuation
- Relative currency strength: The British pound has remained stronger, supporting the UK’s USD GDP
Why this is not a concern
- Growth momentum intact: India continues to grow faster than major economies
- Temporary valuation effects: Exchange rate movements are cyclical
- Projection shifts, not reversals: Long-term trajectory (overtaking Japan and Germany) remains unchanged, only delayed
- Nominal rankings are volatile: Sensitive to currency and statistical changes, not just real output
The revision reflects methodological correction and currency movement, leading to a temporary ranking shift and slight delay in milestones. India’s structural growth trajectory and long-term position in the global economy remain intact.
Top of Form
Top of Form
4.2 Bottom of Form
As per data released by Govt last week,
- India’s total exports (goods + services) reached a record USD 860 billion in FY 2025–26, up from USD 825 billion in FY 2024–25, reflecting resilience despite global trade disruptions.
- For FY 2025–26, merchandise exports rose marginally to USD 441.78 billion, while imports increased significantly to USD 774.98 billion, widening the annual goods trade deficit to USD 333.20 billion.
- Services exports grew faster (7.9%) than goods exports (0.9%) and are projected to surpass merchandise exports as early as FY 2026–27.
- March 2026 merchandise trade deficit narrowed to USD 20.67 billion, as imports declined ($59.59 bn) more sharply than exports ($38.92 bn).
- Services trade provided a cushion, with exports at USD 35.20 billion and lower imports reducing the net deficit.
- Including services, the overall trade deficit improved to USD 2.44 billion in March 2026 from USD 3.55 billion a year earlier.
India’s record export performance underscores resilience, but structural trade imbalances and external uncertainties continue to temper the overall outlook.
# 5 PE/VC
5.1 Tracxn: India Tech Annual Funding Report 2026 highlights a “K-shaped” recovery in the startup ecosystem.
- India’s tech startups raised $11.7 billion in FY26, an 18% decline from the previous year’s $14.3 billion.
- Despite the dip, India moved up to become the 4th most funded country globally, overtaking Germany and France.
- Early-stage funding surged by 33% ($4.8 billion), signaling that investors are still betting heavily on new, scalable business models even as they pull back on late-stage “mega-rounds.”
- A massive highlight was the 52% jump in IPOs, with 47 tech companies listing in FY26 (including major names like Lenskart and Groww).
Venture Intelligence: Q1 2026 PE-VC Roundup
Venture Intelligence provides a more granular look at the calendar year’s start.
- PE-VC investments fell 22% year-on-year to $9.1 billion in Q1 2026 (across 316 deals).
- A specific release this week highlighted that Tamil Nadu saw a sharp drop in Q1 funding to $221 million (down from over $2 billion in Q1 2025). The decline was attributed to a lack of “mega-deals” rather than a drop in deal volume, which remained stable at 19 deals.
- Enterprise Infrastructure and Fintech remained the top performing sectors.
5.2 FFS 2.0 launch:
Following the successful implementation of Fund of funds for Startups [FFS 1.0] through SIDBI, Government notified ₹10,000 crore Startup India Fund of Funds 2.0 (FoF 2.0) to boost venture and growth capital.
- Target segments: Deep tech, early growth-stage startups, and technology-driven manufacturing.
- Corpus structure (4 segments):
- Deep tech (long R&D, high-cost innovation)
- Micro VCs for early growth-stage startups
- Tech-driven manufacturing startups
- Sector- and stage-agnostic AIFs
- Detailed guidelines to cover eligibility, selection, monitoring, reporting, and fund disbursal.
A focused expansion of public capital support, with success contingent on disciplined execution and effective deployment into scalable domestic innovation.