Week ending 18th Oct 2025

# 1 Markets

Indian equities extended their upward momentum for the third straight week ended October 17, 2025, marking their biggest weekly gain in four months and reaching fresh 52-week highs amid robust earnings momentum and festive season sentiment.​ The Sensex and Nifty gained 1.9% and 1.68% to close at 83,952 and 25,710 respectively, both finishing near weekly highs. The up‑move was supported by falling crude oil prices, a recovering rupee, signs of foreign institutional investor buying (net inflow of ₹ 13848 cr.) and festive‑season optimism – though market breadth and global risk remain watch‑points.

Indian bond yields eased slightly last week, with the 10-year G-sec ending near 6.50%, its lowest in three weeks, as dovish RBI minutes and sub-2% inflation reinforced expectations of a December rate cut.​ Profit-taking capped gains midweek ahead of fresh supply from a ₹300 billion government bond auction, while corporate bond issuance strengthened on easier rate outlook.

US equities rebounded from midweek volatility to log solid weekly gains, with the S&P 500 up 1.7%, Dow up 1.6%, and Nasdaq rising 2.1%, led by strong bank earnings and easing credit fears.​ Market sentiment improved after President Trump signalled tariff moderation toward China, while regional banks recovered following reassurance on loan quality.​

US Treasury yields eased last week, with the 10‑year yield settling near 4.00%, down about 5 bps, as renewed regional bank credit concerns triggered risk-off demand and safe‑haven buying.​
Expectations of a 25‑bp Fed rate cut at month‑end and continued government shutdown uncertainty reinforced the bond rally and encouraged defensive positioning.

# 2 RBI

2.1 As per data published by RBI last week,

• Bank credit: ₹192.66 lakh crore; +11.38% YoY (strongest since January)
• Deposits: ₹240.98 lakh crore; +9.94% YoY and
• Credit–Deposit (C/D) ratio: ~80.0%
  • The combination of GST 2.0 implementation and festive-season demand has lifted system credit growth to 11.38% YoY, the highest pace since January – signalling broad-based near-term credit demand and improved throughput in invoicing/formal sector activity.

1. • Deposits (+9.94% YoY) continue to lag credit (+11.38% YoY), implying a mildly tightening structural funding gap versus last year. This typically places upward pressure on deposit pricing and could keep system cost of funds firm.
   • A ~80% C/D ratio reflects healthy intermediation; sustained credit outpacing deposits would, however, necessitate continued deposit mobilization or wholesale funding to maintain comfortable liquidity buffers.

Credit growth has re-accelerated to a post-January high on GST 2.0 and festive tailwinds, outpacing deposits on a 12-month view.

2.2 RBI made key changes in FEMA facilitating cross border trade and payments last week

• AD banks (including overseas branches) may lend in INR to entities and banks in Bhutan, Nepal, and Sri Lanka to facilitate cross-border trade – broadens rupee-settlement corridors and cuts FX risk for regional trade.
• Unutilised balances in exporter FCY accounts with an IFSC bank in India now get up to 3 months for repatriation (vs. end of next month earlier) – eases working-capital management without relaxing prudential discipline.
• Master Direction – Export of Goods & Services and Master Direction – Deposits & Accounts amended – provides immediate operational clarity for banks and exporters.

Extending the IFSC repatriation window eases exporters’ working-capital strain, enhances onshore cash-management/hedging, and strengthens IFSC competitiveness. Policy improves shock-absorption in periods of FX volatility by anchoring more transactions in INR and allowing temporary FCY liquidity buffers.

2.3 As per report released by Sa-Dhan, self-regulatory organisation for MFIs,

• NBFCs & NBFC-MFIs account for 86% of clients and 84% of portfolio in microfinance.
• 28 crore active clients; ₹3.81 lakh crore total outstanding (FY25).
• NBFC-MFI book: ₹2.38 lakh crore GLP; ₹1.88 lakh crore (79%) rural, ₹50,022 crore (21%) urban.

• NBFC-MFI rural share rose to ~80% in FY25 (from 76% in FY24); when banks & SFBs are included, rural is 61% of sector GLP.
  • Top five: Bihar, Tamil Nadu, Uttar Pradesh, West Bengal, Karnataka.
• Asset quality: 180+ DPD lower in rural (11.5%) vs urban (14.9%) across the microfinance stack.

Rural-led growth with better delinquency metrics is reshaping microfinance towards NBFC-MFIs, even as stricter guardrails temper near-term expansion.

# 3 SEBI

3.1 SEBI in its circular issued on Friday has proposed one-time window to transfer pre-Apr 1, 2019, physical shares despite the post 2019 demat only transfer rule. Key aspects:

• After company/RTA verification, such shares will be directly credited to investors’ demat accounts.
• The facility will be time-bound with a sunset clause; dematerialisation remains the end-state.

Why it matters

• Resolves long-pending grievances where transfers were stuck due to the 2019 bar.
• Market hygiene & liquidity: Cleans up issuer registers; may add marginal free float as dormant holdings re-enter circulation.

A pragmatic, time-boxed fix to unlock legacy physical share transfers into demat, improving investor outcomes and market cleanliness without diluting the long-term push for full dematerialisation.

3.2 SEBI made several significant regulatory announcements during the week ending October 17, 2025, focusing on transparency, compliance ease, and market development.​

1. Master Circular on Debt Securities

SEBI issued a comprehensive Master Circular on October 15, 2025, consolidating all regulatory framework for debt instrument issuance and listing. The circular covers Non-Convertible Securities (NCS), Securitised Debt Instruments (SDI), Security Receipts (SR), Municipal Debt Securities, and Commercial Papers (CP) under a unified framework. This consolidation aims to streamline compliance obligations, enhance regulatory clarity, and simplify the process for issuers and market participants.​

2. Extension for Angel Fund Disclosures

The regulator extended the compliance deadline for Angel Funds to disclose their investment allocation methodology from October 15, 2025, to January 31, 2026. Angel Funds must now specify clear allocation methodology in their Private Placement Memorandum (PPM) and ensure all investments after January 31, 2026, adhere to disclosed methodologies.​

3. Related Party Transaction Disclosure Reforms

SEBI issued new guidelines on October 12, 2025, specifying minimum information requirements for audit committee and shareholder approvals of Related Party Transactions (RPTs). The reforms ease disclosure norms for listed companies while maintaining transparency standards, addressing industry representations for simplified compliance processes.​

These announcements demonstrate SEBI’s focus on regulatory consolidation and compliance simplification. The RPT disclosure reforms balance regulatory oversight with practical implementation concerns raised by listed companies. These measures collectively support market development while ensuring investor protection and regulatory clarity.​

3.3 SEBI unearthed insider trading case against senior officials of another regulator, first of its kind last week

• Key issue: Alleged insider trading ring profited ~₹173 crore by using confidential CERC “market coupling” information to buy IEX put options just before the public order and resultant price fall.
• How discovered: SEBI’s surveillance flagged an anomalous, time-clustered spike in IEX put option volumes (by first-time/irregular derivatives traders) ahead of the announcement; complaint inputs plus device forensics, WhatsApp/Signal traces, and fund flows corroborated the link to CERC officials.

A textbook case of regulatory information leakage exploited through coordinated options bets, detected by pattern analytics and tightened with digital and banking forensics.

# 4 Economy

4.1 Pharmexcil propose to introduce ‘traffic-light’ buyer risk system classifying overseas buyers by payment reliability: Green (no complaints), Amber (1–2 complaints), Red (≥3 complaints).

• System is to avoid delays/non-receipt of dues are disrupting exporters’ cash flows—often where competitive pressure leads to credit terms/LC discrepancies (goods released and sold before bank releases payment).

How it will work

• Ratings derived from exporter-filed, verified complaints.
• Bipolar model: captures complaints against buyers and Indian exporters; importers can also rate Indian sellers to flag advance-payment frauds.
• Pharmexcil coordinating with Indian Missions Abroad, ECGC, DGFT, and collection agencies for verification/advocacy

• India exports ~$28B of medicines annually (FY24 pharma exports $27.85B).

System may help in potential reduction in disputed receivables in Africa/LAC lanes, more predictable cash conversion cycles for exporters. May help reprice trade terms (tighter credit, higher collateral) for flagged markets/buyers. This is certainly beneficial as India exports ~$28bn of medicines annually.

4.2 As per data released by Govt. last week

• Unemployment (overall): 5.2% in Sep vs 5.1% in Aug – marginal uptick, indicating job creation lagged the expanding labour force.
• Rural unemployment: 4.6% vs 4.3% – sharper rise than urban, pointing to emerging rural softness post-monsoon/seasonal shifts.
• Urban unemployment: 6.8% vs 6.7% – broadly stable but elevated relative to rural, reflecting slower urban absorption.
• Youth unemployment (15–29 yrs.): 15.0% vs 14.6% – three-month high, highlighting ongoing entry-level demand constraints.

• Labour Force Participation Rate – 55.3% vs 55.0% – five-month high; more people entered/returned to the labour market.

Participation rose faster than employment, lifting unemployment slightly; rural areas and urban women show the clearest stress pockets even as overall employment ratio improved modestly.

4.3 As per data released by Govt last week,

• India’s retail inflation eased to a 99-month low of 1.5% in September and averaged 2.2% in the first half of FY26
• Despite the sharp moderation in the first half, some states faced higher price pressures than the national average, led by Kerala, where soaring gold inflation drove up costs.

Rural areas recorded higher inflation than urban in several states such as Kerala, Jammu & Kashmir, and Chhattisgarh.

4.4 As per data released by Govt. last week,

• Exports (Sep): $36.38 bn, +6.7% YoY; +$1.28 bn vs Aug ($35.10 bn) – Growth remains resilient despite new headwinds; momentum modest but positive.

• • Exports to US (Sep): $5.46 bn, 11.93% YoY; US share ~15% vs >20% earlier – First full month of US tariffs shows clear demand hit from America.
  • Sectoral exports (Sep): engineering, electronics, petroleum, pharma cited as drivers – Higher value-add categories supported topline despite US weakness.
  • Services exports (Sep): $30.82 bn vs $34.06 bn in Aug – Seasonal/mix softness trimmed services cushion month-on-month.

• Imports (Sep): $68.53 bn, +16.7% YoY; +$6.94 bn vs Aug ($61.59 bn) – Import surge outpaced exports, driven by gold, silver, fertilisers, electronics.
  • Gold imports (Sep): $9.6 bn vs ~$5 bn in Aug; quantity 102 vs 61 (units as reported: tonnes) — Festive demand and price dynamics inflated the import bill.
• Merchandise trade deficit (Sep): $32.15 bn (13-month high); Aug: $26.49 bn – Gap widened sharply on import spike, notably precious metals.

Resilient export headline masks composition risk – US drag + precious-metal imports drove a deficit spike; near-term trajectory hinges on tariff outcomes and festive-season import normalisation.

4.5 IMF in its outlook released last week,

• Lifts India’s FY26 growth forecast to 6% (↑0.2 pp), citing strong Q1 momentum (7.8% GDP on robust private consumption) offsetting higher U.S. tariffs.
• For the following fiscal, the IMF trims the outlook to 2% (↓0.2 pp)Top of Form

# 5 PE/VC

5.1 As per data published by Venture Intelligence

• Between January–September 2025, Indian markets witnessed 1,363 transactions, up from 1,170 in all of 2024, with the average deal size climbing to USD 36.6 million. The share of mid-sized deals (USD 10–25 million) rose to 31% against 21% a year earlier.​
  • The IT and consumer staples segments accounted for 35% and 13% of total investment value respectively, underscoring investor interest in digital infrastructure, AI-led innovation, and consumption growth.​
• Despite strong inflows, exit activity declined to USD 11 billion, with block deals and secondary sales dominating.​

In summary, India’s PE/VC market maintained sharp upward momentum through mid-October – outpacing 2023 levels – while global VC sentiment stayed buoyant, particularly in AI, climate technology, and mid-market buyout segments.