# 1 Markets
Indian equities advanced for the fourth consecutive session on Friday, buoyed by strong foreign institutional investor (FII) inflows, broad-based blue-chip buying, a strengthening rupee, and a sharp decline in global crude oil prices. The Sensex closed at 84,058 and the Nifty at 25,637, as both indices edged closer to record highs. Despite over ₹1 lakh crore worth of stake sales by promoters, PE/VCs, and strategic investors in the last two months—adding supply pressure—net FII inflows of ₹13,000 crore last week have underpinned the rally. While improving sentiment and declining crude prices indicate potential for further upside, the sustainability of market momentum will hinge on the corporate earnings trajectory.
On the bond market, RBI’s calibrated move to suck excess liquidity through variable reverse repo auctions hardened yields marginally pushing the 10-y yield to close at 6.31% on Friday.
The U.S. economy contracted by 0.5% in Q1 2025—its first decline in three years—driven by a surge in pre-tariff imports, the steepest drop in federal spending since 1986, and slowing consumer demand. May consumer spending fell 0.1%, undershooting expectations, as the boost from pre-emptive purchases ahead of tariffs faded. Despite macro weakness, U.S. equities rebounded sharply, with the S&P 500 and Nasdaq hitting record highs, buoyed by optimism around U.S.-China trade talks and a tech-led rally led by Nvidia crossing $3.85 trillion in market cap. The Dow and S&P gained ~2%, Nasdaq ~3%, while the 10-year Treasury yield softened to 4.27% amid easing inflation pressures.
# 2 RBI
2.1 Key takeaways from State of Economy in RBI Bulletin published last week
- GDP growth Estimated at 6.5% for 2024-25, with a robust Q4 outlook
- Rising trade barriers and geopolitical tensions threaten medium-term global prospects
- Industrial activity resilient with steady growth in steel and capital goods; automobile output rebounded in May.
- Headline inflation below target for four months, easing food prices significantly due to record crop yields in 2024-25: Core inflation remains muted, with some softening in recent months.
- Debt outflows paused; ECB inflows in April 2025 at US$3.2 billion with 72% for capex.
- Gross inward foreign direct investment (FDI) amounted to $8.8 billion in April 2025, higher than $5.9 billion in March 2025 and $7.2 billion in April 2024; manufacturing and business services accounted for nearly half of the gross FDI inflows in May
- Renewable capacity increased by 29.52 GW in FY 2024-25, primarily solar, wind, and hydro projects
Despite rising global risks from trade tensions and geopolitical conflicts, India’s economy remains resilient, with key sectors maintaining momentum. Prolonged trade policy uncertainty and increasing protectionism could leave a lasting impact on the global economy.
2.2 RBI released on June 26, 2025, data on the performance of the private corporate sector during 2024-25 drawn from abridged financial results of 3,902 listed non-government non-financial (NGNF) companies. Key takeaways are summarised below:
- Overall sales of listed private non-financial companies increased by 7.2% during 2024-25, up from 4.7% in the previous year.
- Manufacturing sector sales rose by 6.0%, compared to 3.5% in 2023-24, driven by industries such as automobiles, electrical machinery, food & beverages, and pharmaceuticals.
- IT sector sales growth improved to 7.1% during 2024-25 from 5.5% previously.
- Non-IT services recorded double-digit growth, led by telecommunications, transport & storage services, and wholesale & retail trade.
- Raw material expenses for manufacturing companies increased by 6.6%, with the raw material-to-sales ratio rising from 54.2% to 55.7% (indicative of input cost pressure).
- Operating profit growth moderated to 6.0% for manufacturing (from 12.4% in the previous year).
- Non-IT services saw profit growth of 15.9%, while IT companies’ operating profit growth was 6.1%.
- Operating profit margins declined marginally: manufacturing by 20 bps to 14.2%, IT by 80 bps to 21.9%, and non-IT services by 30 bps to 22.1%.
- The Interest Coverage Ratio [ICR] improved across major sectors during 2024-25 and remained above 1 (the viability threshold), indicating better debt servicing capacity.
With capacity utilisation already crossing 70% complimented by comfortable ICR, it is time for corporates to enhance capex for recording sustainable growth
2.3 As per Ind Ra rating agency’s Credit Growth Outlook released last week
- Credit growth slowed from 19.4% (Apr 2024) to 9.9% (Apr 2025).
- Causes: High base effect, and slower growth in NBFC and retail lending.
- Forecasts 13–13.5% YoY credit growth for FY26 driven by:
- RBI rate cuts and CRR reduction aiding liquidity.
- Monetary policy transmission softening lending rates.
- Private capex revival likely to boost corporate lending.
- Projected deposit growth: 12–13% YoY in FY26.
- Banks are lowering lending and deposit rates, improving credit availability and flow.
A sustained improvement in system liquidity and reduction in repo rates and CRR are likely to bode well for a pick-up in credit growth in the near term. Deposit growth could come under pressure with banks looking to an accelerated repricing of deposits as seen with 79% growth in CDs during the last 12 months.
- To combat the rising incidence of digital payment frauds, the RBI is spearheading the creation of a Digital Payment Intelligence Platform (DPIP) as a Digital Public Infrastructure (DPI). Developed under RBI supervision and in collaboration with both public and private sector banks, DPIP aims to enable real-time fraud intelligence sharing, facilitate proactive risk detection, and support secure digital transactions. The RBI Innovation Hub (RBIH) is leading the prototype development with 5–10 banks, and rollout is expected within the next few months. DPIP will leverage advanced analytics and AI to detect anomalies and prevent scams before execution.
Context:
- Total frauds in FY25 surged to ₹36,014 crore, nearly 3x from ₹12,230 crore in FY24.
- Public sector banks reported ₹25,667 crore worth of frauds (up from ₹9,254 crore).
- In terms of number of frauds: digital payments (cards/internet) dominate.
- In terms of value: advances (loan frauds) dominate, especially in public banks.
This initiative represents a foundational shift in proactive fraud management through industry-wide data collaboration under regulatory guidance. RBI’s push for a DPIP marks a structural move to pre-empt cyber frauds as digital transactions scale.
2.3 Key takeaways from the TransUnion CIBIL Credit Market Report for the quarter ended March 2025 released last week
- New loan originations fell to a two-year low, reflecting weak demand, particularly from consumers aged 35 and below.
- The Credit Market Indicator (CMI) dropped to 97, its lowest in two years, driven by a 3% YoY decline in new-to-credit (NTC) borrowers.
- The share of credit enquiries from borrowers aged ≤30 declined to 56% (from 58% YoY), indicating waning appetite among younger consumers.
- Despite lenders cautious approach, credit supply marginally improved, with the CMI supply component rising from 92 to 93 YoY.
- Lenders showed a clear preference for higher ticket, secured loans, including home loans > ₹1 crore and Two-wheeler loans > ₹1.5 lakh
- In contrast, entry-point products for NTC consumers (e.g., low-value personal and consumer durable loans) saw a relative decline.
TransUnion expects improved supply in the home-loan segment in the coming quarters due to monetary easing. The overall decline in NTC is the lagging effect of RBI’s measures to curb unbridled growth in unsecured loan segment making it costlier for both NBFCs and borrowers.
# 3 SEBI
3.1 SEBI last week has proposed a new governance framework for Market Infrastructure Institutions (MIIs)—stock exchanges, clearing corporations, and depositories—to reinforce their public-interest role over commercial objectives. Key proposals include:
- Mandatory appointment of two executive directors (EDs) with KMP status to oversee core functions like trading, settlement, compliance, risk, and grievance redressal.
- Codification of roles for MDs, EDs, CTOs, and CISOs to bring clarity and accountability.
- Restrictions on board memberships to reduce conflict of interest—MDs/EDs barred from serving on external commercial boards, with EDs allowed only on MII subsidiaries.
The move follows SEBI’s emphasis on deepening governance amid rising retail participation and profitability of MIIs. This exercise is seen in the context of deeper involvement of former NSE senior officials in the co-location scam with unlimited powers vesting with a single person. The proposals come as SEBI continues reviewing NSE’s delayed IPO, reiterating the primacy of public over commercial interest.
3.2 SEBI has issued circular last Thursday revising Rules on Related Party Transactions (RPTs) on Friday. Key highlights
- Management must submit a certificate from the CEO/Whole-time Director and CFO to the audit committee confirming that proposed RPTs are in the interest of the listed company.
- The earlier requirement for promoters to certify RPT terms has been withdrawn.
- For material RPTs requiring shareholder approval, companies must provide a valuation report from an external party.
- Companies must ensure shareholders can access external reports via a web link and QR code.
- Peer comparison requirement for royalty-related disclosures has been eased.
SEBI is shifting toward a more management-accountable and disclosure-driven framework for RPTs, reducing promoter oversight obligations while ensuring that shareholders receive independent, accessible information (via valuation reports and QR codes). This reflects a balancing act between investor protection and regulatory ease, with an emphasis on institutional governance over promoter-driven controls
# 4 Economy
4.1 As per S&P Global India’s economic activity accelerated sharply in June
- HSBC’s Flash Composite PMI rising to a 14-month high of 61, led by strong manufacturing and services output.
- Manufacturing PMI rose to 58.4 and services PMI to 60.7, driven by robust demand, export growth, and tech-led efficiency gains.
- New export orders hit record highs, especially in manufacturing, prompting increased hiring. While input and output prices continued to rise, inflationary pressures softened.
- Business sentiment remained strong but moderated, with optimism dipping slightly among service providers
4.2 S&P Global in its report released last week
- Revised India’s FY26 GDP growth forecast upward to 6.5% (from 6.3%), citing normal monsoon expectations, tax relief, lower crude prices, and monetary easing.
- emphasized India’s domestic demand strength and limited export dependence as buffers against global risks, aligning its view with the RBI’s estimate.
- cautioned that geopolitical tensions and oil price shocks remain key downside risks for the broader Asia-Pacific region
4.3 As per UN Sustainable Development Solutions Network’s latest report
- India ranks 99th in the 2025 SDG Index, breaking into the top 100 for the first time (up from 109th in 2024),
- With a score of 67, India lags China (49th) and the US (44th), but leads Pakistan (140th) and Bangladesh (114th).
- Global SDG progress remains stalled, with only 17% of targets on track for 2030.
- Top performers remain Nordic nations, while East and South Asia show the fastest improvement since 2015.
The report calls for urgent global financial reforms, highlighting underinvestment in emerging markets despite higher growth potential.
# 5 PE/VC
5.1 As per Tracxn data released last week Indian tech startups raised $4.8B in H1 2025, down 25% YoY and 19% vs H2 2024. Despite the funding slowdown, India became the 3rd-highest funded startup ecosystem globally, surpassing Germany and Israel.
- Stage-wise drop: Seed (-44%), Early (-16%), Late-stage (-27%)
- Top sectors: Transport & logistics (+54% YoY), Retail ($1.2B, -32% YoY), Enterprise apps ($1.1B, -26%)
- Large rounds: 5 raises >$100M, led by Erisha E Mobility ($1B)
- Acquisitions up: 73 in H1 2025 vs 54 YoY; major ones include Magma Insurance ($516M), Minimalist ($350M)
Tracxn noted continued ecosystem resilience, sectoral investor interest, and quality exits despite funding pressure.
5.2 Key takeaways from the India Private Equity Report 2025 published by Bain & Co
- Private equity and venture capital investments rebounded by approximately 9% in 2024, reaching around $43 billion after two years of contraction
- VC and growth investments saw a significant increase of ~40%, driven by higher deal volumes (from 880 in 2023 to 1,270 in 2024) and increased funding in consumer tech (~2x to ~$6 billion)
- VC investments grew by about 9% year-over-year, totalling ~$43 billion in 2024,
- PE investments remained steady at approximately $29 billion
- Deal activity significantly increased in consumer tech, with a surge in large deals ($100M+ megadeals rising from 4 in 2023 to 16 in 2024) 20.
- The healthcare sector experienced ~80% growth in deal volumes, driven by large med tech investments and momentum in specialty pharma and CDMOs 20.
- Financial services saw a ~25% growth, fuelled by a shift from unsecured retail loans to high yield, secured assets such as affordable housing and micro-LAP, supported by an anticipated investment boost due to revised MSME classification and a FY 2026 budget with enhanced credit guarantees.
- IT/ITeS investments surged ~4x, led predominantly by large ticket deals
- The proportion of buyout deals increased, comprising 51% of overall PE deal value in 2024—up from 37% in 2022—indicating a shift toward acquiring controlling stakes for value creation.
- Exit activity was robust, totalling ~$33 billion in 2024—showing a 16% increase year-over-year—with public market exits accounting for about 59%, driven by IPOs and block trades.
- India achieved a record year with domestic funds, underscoring India’s rise as an attractive investment destination in Asia-Pacific 5.
- Increasing participation from global funds and government-linked investors is boosting capital commitments.
- Funds are strengthening operating teams, adopting diverse models—sectoral, functional, and advisor-led—to add value and attract LP commitments. There’s a focus on operational value creation to meet increasing demands from LPs like sovereign wealth funds and pension funds.
India’s private equity and venture capital sectors are recovering, with investment volumes reaching ~$43 billion in 2024, buoyed by increased deal activity, sector-specific growth (notably healthcare, financial services, IT/ITeS), and strong exit momentum. Future growth depends on macroeconomic stability, policy support, and operational value creation to attract sustained investor interest