# 1 Markets
1.1 Markets ended March 30 with a steep sell-off, as the Sensex fell 2.22% and the Nifty declined 2.14%, pressured by elevated crude prices, a weakening rupee, and sustained FII outflows. At the start of FY27, markets staged a modest rebound, with the Nifty reclaiming 22,700, supported by easing geopolitical concerns and selective buying. However, upside remained limited through April 3 due to holiday-truncated trading and renewed geopolitical uncertainty, with volatility staying elevated. (Despite the recent market upheavals about 112 companies raised a record 1.79 lakh cr. through main board IPOs in FY26. The mop up was 10% higher than the previous high of 1.62 lakh cr. raised by 78 IPOs in FY25)
1.2 Indian government bond yields surged to a 19-month high last week, with the 10-year benchmark climbing to 7.11% as global crude prices above $110 and a weakening rupee fueled domestic inflation fears. Investors brace for prolonged pause in rate cut cycle as sentiment remained bearish.
1.3 US equity markets entered correction territory last week, with the S&P 500 and Nasdaq under intense pressure as Middle East conflict concerns pushed Brent crude above $110 and the 10-year Treasury yield to 4.48%. Sentiment remained fragile as investors digested a stronger-than-expected March jobs report and stayed sidelined ahead of the Good Friday market closure.
1.4 US Treasury yields climbed to their highest levels since July 2025 last week, with the 10-year benchmark hitting 4.44% as surging oil prices and sticky inflation data forced markets to price out near-term rate cuts in favor of a potential year-end hike.
# 2 RBI / Banking
2.1 CRISIL in its report last week
- Projected banking system credit growth at 13% in FY27, a marginal dip from the 14% estimated for FY26.
- Gross NPAs have bottomed out and may rise by up to 0.20%, reaching 2.5% by March 2027.
- MSME loans with exposure to West Asia are the primary monitorable; sectors like ceramics and diamond polishing have already felt adverse impact.
- Micro-loans against property and certain unsecured advances are also under watch.
- If the credit-deposit ratio stays elevated, banks may need to step up securitisations to sustain lending.
The banking system enters FY27 on reasonably solid footing, but West Asia headwinds, fragile microfinance pockets, and deposit mobilisation pressures make this year a year to watch credit quality closely rather than celebrate growth.
2.2 IBC Amendment Bill, 2025 approved by Parliament — Key Changes and impact
This Bill represents the single biggest overhaul to the insolvency framework since the IBC came into effect in December 2016.
- Where default is established and statutory requirements are fulfilled, NCLT shall mandatorily admit an application under Section 7. No other grounds can be considered to reject it. A record of default with an Information Utility (IU) is sufficient to ascertain the existence of debt and default by the NCLT, removing judicial discretion and speeding up the admission process.
Reduces the risk of NCLT rejecting admissions on technical or extraneous grounds. Lenders with IU-filed records can trigger CIRP faster and more predictably.
- 2. The Bill introduces a Creditor-Initiated Insolvency Resolution Process (CIIRP) that allows for out-of-court commencement of insolvency proceedings by select financial institutions. The debtor remains in control of the company during CIIRP – to be completed within 150 days.
Gives banks, large NBFCs a powerful out-of-court tool to initiate resolution — reducing NCLT burden, cutting timelines, and preserving going concern value. The debtor-in-possession model reduces management disruption, improving resolution prospects.
- The amendments prescribe time-bound processes — admission of cases within 14 days, approval of resolution plans within 30 days, disposal of appeals within 3 months, and liquidation timelines fixed at 180 days, extendable by 90 days.
Addresses the chronic problem of IBC delays. Faster resolution means less erosion of collateral value, quicker recoveries, and reduced carrying costs for NPAs.
- The Bill empowers the CoC to supervise; liquidator shall be appointed on the proposal of the CoC, and the CoC — with the approval of 66% of its members — may also replace the liquidator during liquidation.
Financial creditors (who dominate the CoC) now have end-to-end oversight from CIRP significantly reducing the risk of liquidators acting against creditor interests.
- The Bill proposes a new Section 28A enabling a creditor who holds a security interest over a guarantor’s asset — and has taken possession under SARFAESI or any other law — to transfer that asset as part of the corporate debtor’s CIRP, subject to CoC approval.
Lenders can now pool guarantor assets into the resolution plan, improving overall recovery prospects. Particularly important for consortium lenders dealing with promoter guarantees.
- The Bill expands look-back periods by shifting the threshold from the insolvency commencement date to the initiation date, capturing transactions undertaken before admission of insolvency applications.
Makes it harder for promoters to strip assets or move funds before formally triggering insolvency. Improves lender recovery in cases of fraud or asset diversion.
- The Bill clarifies that statutory dues do not have the status of secured creditors.
Removes the risk that government tax/duty claims rank ahead of secured financial creditors. This protects lender recovery priority in both resolution and liquidation.
- The group insolvency framework seeks to efficiently resolve insolvencies involving complex corporate group structures- aligns domestic practices with international best practices and paves the way for improved recognition of Indian insolvency proceedings in other jurisdictions.
Critical for lenders exposed to large conglomerate groups (e.g., Adani, Vedanta-type structures). Coordinated proceedings prevent subsidiaries from being used to shield assets.
Overall, the amendments are decidedly pro-lender — particularly for financial creditors. The shift of control deeper into the CoC, the out-of-court CIRP mechanism, and the plugging of fraudulent transaction loopholes collectively strengthen the lender’s hand at every stage of the insolvency process.
- RBI has revised its earlier guidelines on capital market exposures:
- Loans for purchase of shares/securities capped at ₹1 crore per individual across the banking system; Borrowing for IPOs, FPOs, and ESOPs restricted to ₹25 lakh per individual.
- Corporate guarantee is mandated when funding is extended to subsidiaries/SPVs for acquisition finance. Acquisition finance now includes mergers and amalgamations, limited to deals resulting in control of non-financial companies.
Overall, the RBI’s revised framework tightens leverage in capital market financing while ensuring a more stable and risk-contained credit environment for banks.
2.4 RBI’s revised guidelines for digital payments and money transfers – Key changes:
- Mandatory 2FA for all digital payments: Moves beyond OTP; requires two independent factors, including one dynamic (PIN/biometric/token). If not followed, banks compensate for fraud losses.
- Enhanced 2FA for cross-border card-not-present transactions by Oct 2026.
- Applies to UPI, cards, and wallets—ending single-click/static PIN transactions.
- AI-driven checks; low-risk = seamless, high-risk = extra verification.
A decisive shift toward tighter authentication and bank accountability, prioritising security over convenience in India’s digital payments ecosystem.
2.4 As per ICRA release last week
- Corporate credit profiles remained resilient in FY26, with 388 upgrades vs 124 downgrades; credit ratio improved to 3.1x (vs 2.0x in FY25).
- Healthy balance sheets, steady domestic demand, policy support, and infrastructure-led growth sustained overall credit quality.
- Power, real estate, hotels, auto components, and roads saw significant rating improvements.
- Microfinance and select chemical companies continued to face credit pressure.
- Escalation in West Asia conflict raises concerns on energy, food security, and supply chains; potential disruption (e.g., Strait of Hormuz) could trigger global shocks.
- GDP growth is expected to moderate to ~6.5% (from 7.5%)
Resilient corporate credit fundamentals face a cautious FY27 outlook, with geopolitical risks and rising commodity prices posing emerging downside pressures despite strong domestic drivers.
# 3 SEBI
3.1 SEBI’s revamped Mutual Fund Regulations, notified earlier, came into force on April 1, 2026, marking a sweeping overhaul of the regulatory framework in place for over three decades.
- From April 1, 2026, TER (Total Expense Ratio) will represent the total cost borne by investors with a clear internal break-up. Statutory levies like GST, STT, stamp duty, and exchange/clearing charges will be moved outside TER limits, giving investors clearer visibility into AMC-controlled costs versus government/regulatory charges.
- SEBI’s new algo trading framework became fully mandatory for all stockbrokers in India from April 1, 2026 – allowing exchanges to trace every automated order back to its source.
- AIF exit rules are eased by allowing funds to retain liquidation proceeds beyond their tenure under specified conditions, such as pending litigation or tax/regulatory demands, instead of mandating a zero balance before deregistration. “Inoperative funds” category introduced for inactive entities, with reduced compliance requirements.
- Net fund settlement (gross for securities) introduced to cut idle cash—lowering funding/hedging costs and boosting FPI efficiency.
- Stronger SEBI conflict-of-interest framework introduced (incl. family coverage, ethics office, recusal norms) and streamlined ICDR disclosure enhancing transparency, governance, and investor protection.
SEBI’s regulatory revisions effective April 1, 2026, is characterized by a significant regulatory reset at the start of the new financial year — overhauling mutual funds, AIF, FPI, and intermediary frameworks simultaneously, while also shoring up its own internal governance standards.
# 4 Economy
4.1 Key aspects of Jan Vishwas Bill 2026 passed by Parliament from Fin.Services perspective
The Big Picture
The legislation decriminalises 717 provisions across 79 central laws, replacing jail terms for minor, technical, and procedural offences with monetary fines, warnings, and improvement notices, the most comprehensive single-step decriminalisation exercise in independent India’s legislative history. The Bill converts several offences punishable by fines into civil penalties, enabling administrative adjudication without court prosecution. The bill introduces a structured, graduated approach to compliance — one that treats first-time violations differently from repeat offenses.
Financial Services
- Procedural and technical defaults under the RBI Act — such as minor reporting lapses, formatting errors in filings, or administrative non-compliances — will shift from potential criminal liability to civil penalty. This reduces the threat of personal criminal exposure for bank executives and compliance officers dealing with voluminous regulatory obligations.
- Amendments to Insurance Acts mean insurers, brokers, and intermediaries will no longer face criminal prosecution risk for procedural slip-ups. Given IRDAI’s evolving regulatory framework (Bima Sugam, composite licenses), this reduces friction for new entrants and incumbents scaling compliance operation.
- Similar decriminalisation for technical non-compliances under the PFRDA Act eases the environment for NPS intermediaries, Points of Presence (PoPs), and fund managers navigating a growing but compliance-heavy sector.
Broader Impact
- The shift to civil penalties lowers the risk of personal criminal exposure for procedural defaults for management team meaningfully, attracting more professionals to compliance and risk roles.
- Reduced criminalisation of compliance lapses lowers the legal risk premium in lending and credit assessment for small businesses — potentially improving credit access and formal sector participation.
- For foreign financial institutions and investors, the removal of arbitrary criminal risk from procedural lapses — long flagged as an India-specific governance concern — improves the attractiveness of the market for capital deployment.
The direct amendments to the RBI Act, Insurance Acts, and PFRDA Act signal the government’s intent to modernise the regulatory posture of India’s financial sector, reducing the “fear premium” that has long weighed on investment, talent, and formalisation. where proportionate, civil enforcement replaces criminal risk for procedural defaults.
4.2 As per Govt data release last week
- IIP growth accelerated to 5.2% YoY in Feb 2026 (two-month high), up from ~5.1% in Jan and ~2.7% a year ago, indicating gradual industrial recovery.
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- Manufacturing (≈78% weight) was the key driver, expanding by 6.0% YoY, with broad-based growth across 14/23 industries.
- Mining (3.1%) and electricity (2.3%) growth moderated sequentially, tempering overall momentum.
- Investment-led segments surged:
- Capital goods: +12.5% (sharp pickup)
- Infrastructure/construction goods: +11.2% (sustained double-digit growth)
- Intermediate goods: +7.7%
- Consumption trends mixed:
- Consumer durables: modest growth (+7.3%)
- Non-durables: slight contraction (-0.6%) → signals weak mass demand
Industrial recovery is gaining traction, led by manufacturing and investment demand, but remains uneven with consumption weakness and emerging external risks.
# 5 PE/VC
5.1 India has amended income tax rules last week to shield legacy PE investments from aggressive tax scrutiny, offering relief to investors.
The Background
When India introduced GAAR in 2017 to curb aggressive tax avoidance, it made a clear promise: investments made before April 1, 2017, would be grandfathered — exempt from anti-avoidance scrutiny. Thousands of PE and FPI positions, largely structured through Mauritius and Singapore, were built on this assurance.
What Broke It
In January 2026, the Supreme Court ordered Tiger Global to pay taxes on $1.6 billion in capital gains from its 2018 Flipkart exit ruling that GAAR could override the grandfathering protection if the underlying structure lacked commercial substance. This sent shockwaves through the investor community — suddenly, no legacy position routed through a treaty jurisdiction felt safe.
What India Just Did
On March 31, 2026, the CBDT issued Notifications 54 and 55, amending Rule 10U of the Income-tax Rules to explicitly exclude GAAR application on income from transfers of investments made before April 1, 2017, irrespective of the date of transfer.
What It Means for PE
- Funds holding pre-2017 India positions can now exit without fear of GAAR being invoked, regardless of when the sale occurs.
- The protection covers capital gains specifically — other income from such investments could still face anti-avoidance scrutiny.
- Cases already disputed between 2017, and March 2026 remain unresolved.
A welcome and overdue correction that restores India’s original promise to investors. But the Tiger Global ruling’s broader message stands — the bar for substance in offshore structures has been permanently raised.Top of FormBottom of Form
5.2 Key findings from the India Venture Capital Report 2026 (Bain & Company / IVCA):
- India VC/growth investments hit ~$16B in 2025, up 1.2x from $14B in 2024 — second consecutive year of growth
- This outperformed broader PE-VC, which declined ~18% YoY
- Total deals reached 1,385 (~18% growth), with average deal size rising to $11.7M
- Growth was balanced — both volume and deal size up ~1.1x each
- Fintech– Deal value up 2.2x YoY; Software/SaaS: Up 1.5x YoY
- VC fund-raising doubled to ~$5.4B; average fund size up 35%+ to ~$68M
- $100M+ fund raises jumped from 4 in 2024 to 18 in 2025
Exits
- Total exit value steady at ~$7B; public market exits remained dominant at 65%+ of exit value
- IPO-led exits up ~30% YoY; $100M+ IPOs rose from 2 to 5
- Strategic sales rebounded to $1B+ (~15x vs. 2024)
- Fintech exit value up ~70% YoY; AI Trends
Outlook (2026+)
- Capital expected to concentrate around AI/GenAI, Q-commerce infrastructure, and clean energy
- Robust IPO pipeline: Zepto, PhonePe, Oyo, Shiprocket among companies advancing toward listings
India’s VC ecosystem has decisively shifted from recovery to resilience — capital is now chasing quality, monetization, and exits rather than growth at any cost, positioning the market for sustained, disciplined expansion into 2026 and beyond.