# 1 Markets
Indian equity markets ended the week with Sensex and Nifty posting gains of about 1.5%, hitting multi-week highs before some profit-taking on Friday. Broader indices like Midcap and Small cap outperformed with modest gains through the week. The market was supported by expectations of Fed rate cuts, robust domestic demand, and festive season optimism. Overall sentiment remains optimistic, but selective buying is expected with some caution due to stretched valuations.
The Indian 10-year government bond yield ended the week slightly higher at 6.49%, following a brief midweek dip to near four-week lows as global cues and hawkish US Fed commentary kept demand subdued. Yields traded in a narrow range as traders waited for clearer fiscal guidance and supply calendars, with foreign investor inflows providing some support but supply worries pushing yields up.
US equity markets advanced last week with S&P 500 gaining 0.8%, Nasdaq 1.5%, and Dow nearly 1% marking the best performance in five weeks. The rally was driven by optimism over a widely expected Fed rate cut and positive US-China trade negotiations, including progress on a TikTok deal. investor sentiment was buoyant, but some caution emerged toward the week’s end as the Fed’s tone remained balanced and profit booking set in at elevated levels.
US bond markets saw stable Treasury yields throughout the week, with the 10-year edging down 1 bps. and strong demand at auctions, while expectations for a Fed rate cut kept credit markets broadly supported. Fed did cut its key interest rate by a quarter-point on Wednesday and projected it would do so twice more this year as concern grows at the central bank about the health of the nation’s labour market.
# 2 RBI
2.1 RBI has issued revised guidelines for Payment Aggregators (PAs) last week – PAs handle funds and therefore require direct regulation while Payment Gateways will be treated as technology providers.
- Minimum net worth of ₹15 crore at application, rising to ₹25 crore by year three, to be maintained continuously.
- PAs cannot run marketplaces, can only aggregate funds for contracted merchants, and cannot use ATM PIN for card-not-present transactions.
- PAs cannot cap payment mode limits; this authority lies solely with issuing banks.
- PAs to ensure that merchants comply with Payment Card Industry Data Security Standards (PCI-DSS).
- Funds collected by PAs from customers must be kept in an escrow account and its operations must remain distinct from other businesses, and all settlements must be routed through the escrow mechanism.
RBI’s tightened framework strengthens consumer protection and operational discipline for PAs while raising entry and compliance thresholds.
2.2 As per fortnightly data (ending Sept 5, 2025) published last week by RBI
- Credit growth (YoY) stood at 10.3% ; deposit growth stood at 9.8% for same period.
- Credit growth has been above 10% since late July but remains lower than 13–14% YoY growth in the same period last year. Deposit growth fell below 10% for the first time since end-May 2025.
- Slower private sector capex reduced corporate lending, weaker flow to NBFCs, and cooling in unsecured personal loans are the major reasons.
It may be noteworthy to reckon that Corporate India raised ₹35 lakh crore in FY25, with nearly half coming from non-bank channels like equity, bonds, and NBFC loans, reflecting a shift away from traditional bank credit (down 14%) and signalling slower bank-driven growth. CRISIL in its report released last week
- Expects bank credit to grow 11–12% in FY26, slightly above 11% in FY25.
- Retail loans (33% share) expected to grow ~13% (vs ~12% last year)
- Corporate loans (38% share) growth projected at ~9% (vs ~10% last year)
Though credit growth at 10.3% has outpaced deposits it remains below last year’s pace, with FY26 expansion pegged at 11–12% led by retail lending strength.
2.3 RBI last week has set up a regulatory review cell [RRC], effective October 1, 2025
- To systematically review all regulations every 5–7 years and to strengthen the stakeholder engagement in regulatory process and leverage industry expertise on a continued basis.
- RRC will be by an external advisory group led by Rana Ashutosh Kumar Singh, MD of SBI to channel industry feedback.
- Happy to share that Shri Shyam Srinivasan, ex MD, Federal Bank and Director of TVS Capital Funds is also a member of this RRC.
- RRC will undertake a review of the Regulations in force, keeping in view factors such as the stated objective(s); experience gained through surveillance, supervision and enforcement actions; among others.
- The review will also take into account relevant orders passed by courts or tribunals; global best practices or standards prescribed by international standard setting bodies; its relevance in a changed environment; the scope for reducing redundancies; and any other factor considered relevant by the Bank.
This is a significant step in strengthening institutional mechanism for review of regulations regularly being published by RBI in sync with market realities.
2.4 The Pension Fund Regulatory and Development Authority (PFRDA) has announced a major reform for India’s $175 billion pension sector by allowing individual pension fund houses to design tailor-made investment products.
- Subscribers, who previously could operate only one plan, will now be able to hold multiple pension programs, enabling greater alignment of retirement and wealth-building goals.
- Composite scheme would enable to offer a 100% equity allocation for young investors but also invest in multiple asset classes to generate alpha that is important for long-term wealth creation. This would also allow to hold cash that will allow greater flexibility in timing the market
- The move expands flexibility for investors, permitting funds to move beyond the regulator’s limited pre-set plans and offer bespoke products across the four existing asset classes—equity, corporate debt, government bonds, and alternative investments.
- Pension fund managers (PFMs) can now charge up to 30 basis points, with an added incentive of 10 basis points if that is able to attract more than 80% of new subscribers to a particular scheme. Currently, PFMs can charge between 3 and 9 basis points as fund management fees and Point of Presence entities (NPS distributors) charge a small fee separately and thus has no incentive to introduce multiple schemes.
PFRDA’s reform marks a transformative shift in India’s pension landscape, enabling personalization, more choice for investors, multiple plans, and deeper market innovation.
# 3 SEBI
3.1 SEBI in its consultation paper released on Friday has recommended following changes relating to reporting NAV by AIFs to depositories. Rules mandate Category I and Category II AIFs to undertake valuation of their investments at least once every six months by an independent valuer and disclosed to investors. Now following changes are proposed.
- AIFs and their Registrar and Transfer Agents (RTAs) must upload NAVs of ISINs of all AIF units into the depository system within 15 days of investment portfolio valuation.
- Valuation date is defined as date of the external valuer’s report or for internal valuation, the date recorded in internal fund records.
- Existing AIF schemes must upload latest NAVs as of the circular issuance date within 45 days of valuation.
But the proposal is confronted with following challenges
- ISIN creation is still challenging with CDSL. The time taken to create ISIN and allot units to clients is still not resolved.
- ISINs are created for a particular class of units. NAVs are published for the class of units. The way accounting is being done in case of AIFs is first at folio level and then consolidated to class level and then fund level. The industry is not mature to understand and appreciate the differences. The data compiled if published, will result in lot of chaos in the ecosystem and trust would reduce for clients who would see differences.
- SFA allows differential commercial terms in terms of fees, opex. In such cases, units within same class will not have same NAV.
- As permitted by regulations itself, each client could have different NAV. They have assumed that since they have standardised income or investment allocation, NAV should be standard for each class. Expenses are still allowed to be different, defaulting interest is allowed. Therefore, standardised ISIN based NAV is not practically possible.
- Since there is no standard for calculating NAV, Standards setting Forum [SFA] should first formulate standard for computing NAV and then enforce reporting.
SEBI’s aim through the proposal is aimed at promoting transparency in the AIF ecosystem by leveraging depository infrastructure to maintain updated NAV of AIF units. But accounting challenges in disseminating valuation across units as per present practices pose serious limitation and needs to be addressed.
3.2 A bunch of recent writ petitions in Bombay High Court by five Kirloskar Group companies has become the first big legal test of the SEBI’ Regulation 30A of the Listing Obligations and Disclosure Requirements
Basic Issue
Regulation 30A of SEBI’s Listing Obligations and Disclosure Requirements (LODR) mandates disclosure of private agreements among shareholders, promoters, employees, or directors that may impact a listed company’s management or control.
Problem Identified
- SEBI’s framework blurs the line between transparency and regulatory imposition, creating obligations outside company law.
- Violates privity of contract by binding companies to agreements they never consented to. Transforms disclosure into de facto enforcement, bypassing corporate governance norms where only boards can decide binding obligations.
Practical Risks
- Any shareholder or employee could compel disclosure, imposing unintended liabilities or restrictions. Firms must disclose within two days of intimation without evaluating validity or enforceability.
- Opens scope for mischief, reputational harm, and strategic disruption.
- Retroactive enforcement could conflict with existing business strategies.
- Family settlements, succession plans, or employment contracts risk unintentionally becoming corporate liabilities.
Regulation 30A, intended to enhance transparency, risks overreach by binding listed companies to private agreements they neither consented to nor ratified. This undermines corporate governance, creates legal uncertainty, and opens scope for misuse—highlighting the urgent need to separate disclosure from enforcement. A refined framework should distinguish governance-related agreements (e.g., voting rights) from purely private arrangements irrelevant to investor protection
3.3 SEBI on Friday has issued a circular streamlining the process of transfer of securities from nominees to legal heirs. Currently, nominees act as trustees of securities after the death of a security holder and transfer them to the legal heir as per the succession plan. However, under the existing process, nominees were sometimes assessed for capital gains tax while transferring such securities, even though the Income Tax Act exempts such transmissions from being treated as “transfers”. The changes proposed
- Simplifies the transfer of securities from nominees to legal heirs by introducing a new reporting code (TLH).
- Eliminates delays and unnecessary tax assessments on nominees, ensuring smooth, tax-exempt succession of securities.
TLH is expected to avoid the delay and inconvenience associated with transfer of securities to legal heirs and streamline the whole process.
3.4 SEBI has vide its circular issued on Friday
- Widened eligibility for the Social Stock Exchange (SSE), allowing more charitable entities to raise funds. Trusts, charitable societies, and Section 25 companies are now included as Not-for-Profit Organizations (NPOs).
- NPOs must file an Annual Impact Report (AIR).
- If they have not listed securities, the AIR must be self-reported, detailing major activities and methods used to assess significance.
- If linked to listed securities, the AIR must cover at least 67% of programme expenditure from the previous year, ensuring transparency and accountability.
SEBI’s move broadens fundraising access for charities while tightening accountability through mandatory impact reporting.
# 4 Economy
4.1 India notched its third sovereign credit rating upgrade this fiscal year with Japan’s Rating and Investment Information Inc. (R&I) raising the country’s long-term rating to BBB+ from BBB, with a ‘stable’ outlook. Drivers:
- Robust growth (6.5–7.8%), buoyant tax revenues, fiscal consolidation, elevated public investment, strong domestic demand, low external debt, and adequate reserves.
- Progress on fiscal deficit reduction (target 4.4% of GDP by FY26), improved debt dynamics, resilient services and remittances inflows, and limited risks from the financial system.
- The upgrade comes despite tariff headwinds (notably new US tariffs), noting India’s growth is domestically driven and less export-dependent; GST cuts soften tariff impact.
This follows earlier upgrades by S&P Global (BBB) and Morningstar DBRS (BBB). This is unusual for a major emerging market amid global uncertainty. Moody’s (Baa3) and Fitch (BBB-) still at the lowest investment grade. India’s rare streak of sovereign rating upgrades strengthens investor confidence, lowers external funding costs, and reinforces the country’s positioning as a resilient, high-growth market amid global headwinds.
4.2 Rules are being notified under the new Registration Bill, 2025 which seeks to replace the 117-year-old Act by:
- Empowering States to frame rules requiring registrars to verify land records before registration, curbing fraud and litigation.
- Introducing paperless registration, electronic document submission, e-certificates, and digital record-keeping to improve transparency and ease of doing business.
- Expanding the list of documents mandatorily requiring registration (e.g., agreements to sell, powers-of-attorney, equitable mortgages, court-linked instruments).
- Setting objective criteria to prevent arbitrary denial of registration and providing a framework for cancellation of registrations with due process safeguards.
This move is expected to enhance buyer confidence, reduce disputes, and modernize India’s property transaction system.
4.3 As per S&P Global Commodity Insights report released last week,
- No major jump in capex this fiscal, but USD 800–850 bn private capex expected over next 5 years
- Corporates delaying large projects due to global trade/tariff uncertainties; investments largely from internal accruals, not bank debt.
- Bank credit growth projected at 12–13% FY25.
- Banks cautious, private credit market rising fast (deals in H1 2025 equal full 2024).Private credit market, though only ~1% of GDP, expanding quickly with billion-dollar deals, aided by regulatory curbs on real estate/acquisition finance.
- FY26 real GDP pegged at 6.5%, but risks include weak monsoon and sluggish private capex.
- Services sector loans (28%) outpace manufacturing (21%); reversing this is key to raising manufacturing GDP share from 17% to 25%.
Private capex momentum is building for the medium term, but near-term caution, sectoral imbalances in credit, and policy bottlenecks remain key constraints.
4.4 As per data released by Govt. last week
- WPI inflation (YoY): 0.5% in Aug 2025 vs -0.6% in Jul 2025 and -1.3% in Aug 2024
- CPI inflation: 2.1% in Aug 2025 vs 1.6% in Jul 2025
- Manufacturing (64.23% WPI weight): 2.6% in Aug vs 2.1% in July
India’s wholesale inflation turned positive in August at 0.5%, led by food and manufacturing costs, despite continued fuel deflation.
4.5 As per data released by Govt. last week
- Exports rose 6.7% YoY to $35.1 bn in Aug, led by electronics, engineering goods, and gems & jewellery.
- Imports fell 10.1% YoY to $61.6 bn, narrowing the trade deficit to $26.5 bn (vs $27.35 bn in Jul; $35.6 bn a year earlier).
- Sequentially, exports fell 5.7%, imports down 4.6%.
- Gold imports plunged 57% to $5.44 bn in Aug.
- US exports slowed to 7.2% growth in Aug (from ~25% earlier in 2025) due to 25% tariffs and penalties on Russian oil-linked imports.
- Cumulative Apr–Aug FY26: exports up 2.5% to $184.1 bn, imports up 2.1% to $306.5 bn.
India’s August trade performance showed resilient export growth amid global headwinds, aided by lower imports and a sharply narrower deficit.
# 5 PE VC
5.1 Key highlights from Hurun India Wealth Report 2025 released last week
- Taxpayers declaring annual incomes above ₹1 crore nearly tripled from ~81,000 in AY 2017–18 to ~2.27 lakh in AY 2023–24.
- India now has 8.71 lakh millionaire households (net worth > ₹8.5 crore or $1 million), up 90% since 2021.
- Millionaire households hold a combined net worth of ₹40.5 lakh crore ($480 bn).
- Between 2017–2025, households worth >$1 million grew 445%, and those above $1.2 million grew 202%.
- Majority of growth is at the entry millionaire level:
- Only 5% of 2017 millionaires progressed to the ₹100 crore ($12 mn) bracket.
- Only 1.3% reached ₹200 crore ($24 mn).
- Just 0.07% crossed ₹1,000 crore ($120 mn), and 0.01% became billionaires.
- Top 10 cities account for 79% of millionaire households.
- Mumbai (142,000), Delhi (68,200), and Bengaluru (31,600) lead the list.
India is witnessing a rapid broad-basing of prosperity, with high-income taxpayers and millionaire households multiplying at record pace. Yet, wealth concentration at the very top remains steep, underscoring both the promise of growth and the challenge of inclusivity.