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Aditya Birla Capital Q2 FY26: Lending Momentum Accelerates, but Profit Expansion Stays Mild
Economy, Equities, Markets - October 7, 2025

Asia’s rise as a capital magnet: why investors are diversifying beyond the U.S.

Asia’s rise as a capital magnet: why investors are diversifying beyond the U.S.

At the Milken Institute Asia Summit in Singapore on October 1, 2025, Kevin Sneader, president of Goldman Sachs for Asia-Pacific (ex-Japan), said investors have channelled roughly $100 billion into Asia excluding China over the prior nine months as part of a diversification trend away from concentrated U.S. exposure. That shift does not imply an abrupt exit from U.S. markets but signals reweighting across global portfolios toward Asian equities, fixed income and private assets.

Why now? valuation, performance and policy differentials
There are three measurable, near-term drivers:
* Valuation gaps: The MSCI AC Asia ex-Japan index traded at a trailing price/earnings (P/E) of about 16.5 and forward P/E ~14.2 as of late September 2025, compared with the S&P 500’s forward P/E in the mid-20s (around 23–27 depending on source and date). That P/E discount makes Asia an attractive source of potential relative total-return upside for global allocators.
* Income and yield dispersion: Many Asian markets offer higher dividend yields and steeper credit spreads on corporate and sovereign debt than comparable U.S. instruments, increasing carry for yield-seeking investors in a world where central bank policy divergence remains important.
* Strategic re-positioning around resilience: Large investors and sovereign funds increasingly prioritise supply-chain resilience, near-shoring and regional diversification after recent geopolitical shocks. Institutional allocators — from private wealth to sovereigns — are rotating allocations to capture secular growth in Asian technology, healthcare and consumer sectors.

Where the money went — pockets of demand
Flows are not uniformly spread. Japan, Korea, Taiwan and selected Southeast Asian markets have been net beneficiaries, while China’s equity gains in 2025 were driven more by domestic participation than by outsized foreign inflows. Meanwhile, India has seen mixed signals: despite a robust IPO pipeline, foreign portfolio investors withdrew about $2.7 billion in September 2025 and roughly $17.6 billion year-to-date through September, reflecting tactical repositioning among global funds. This divergence highlights that “Asia” is heterogeneous — investors are favouring markets with clearer earnings momentum or more attractive relative valuations.

The investor case — returns, diversification and sector exposure
From a portfolio perspective, several quantitative arguments drive allocation changes:
* Expected excess return: If Asia ex-Japan’s forward P/E trades at ~14 and the U.S. at ~24, and if earnings re-rate modestly or grow faster, the relative return cushion is material.
* Diversification: Lower correlation between U.S. mega-cap AI winners and broader Asian cyclicals/consumer names reduces portfolio concentration risk, especially for multi-asset funds.
* Sector exposure: Asian allocations increase exposure to manufacturing, semiconductors, private healthcare and consumer discretionary segments that may offer higher secular growth rates than some mature U.S. sectors.
However, investors must weigh these against higher political, regulatory and liquidity risk in select markets. The OECD and IMF continue to warn that capital-flow volatility can spike with global risk aversion.

Risks and caveats
The inflow headline masks sizeable regional variation and risks. China remains a special case — much of its 2025 equity bounce was home-grown, and foreign mutual funds remain cautious. India is experiencing FPI withdrawals even as large IPOs (projected to raise several billion dollars into year-end) continue to attract domestic and retail demand. A sudden U.S. policy shock, a spike in global yields, or regional geopolitical events could reverse flows quickly. Multinational managers must therefore stress-test portfolios for currency swings, liquidity squeezes and regulatory shifts.

What this means for investors
Institutional and retail investors contemplating higher Asian weights should: tilt toward liquid, large-cap exposures or diversified ETFs to manage liquidity risk; use active managers for markets with higher regulatory complexity; hedge macro tail risks (currency and rate exposures); and
reassess country allocations quantitatively — not by headline flows alone. Importantly, diversified Asia allocations should be motivated by long-term structural factors (population, tech adoption, manufacturing re-shoring) rather than short-term momentum alone.

Conclusion
The roughly $100 billion of inflows into Asia (ex-China) over nine months to October 1, 2025, marks a meaningful re-balancing by global investors seeking valuation advantage, yield, and strategic resilience. Yet the rotation is nuanced: country-level fundamentals, governance, liquidity and geopolitical risk will determine winners and losers. For disciplined investors, Asia’s re-emergence is a call to rethink global allocations with careful sizing, robust risk controls, and an eye on long-term secular growth trends.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Rupee Surge and the RBI Hold: What It Means for Indian Investors

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Rupee Surge and the RBI Hold: What It Means for Indian Investors
Banking, Currency, Economy, Markets - October 6, 2025

Rupee Surge and the RBI Hold: What It Means for Indian Investors

Rupee Surge and the RBI Hold: What It Means for Indian Investors

On October 1, 2025 the Reserve Bank of India’s Monetary Policy Committee kept the policy repo rate unchanged at 5.50% and retained a neutral stance, while revising its real GDP forecast for fiscal 2025–26 upwards to 6.8% and trimming inflation projections. The decision was framed as a “dovish pause” that balanced upside growth revisions against still-benign inflation signals. The same day, the Indian rupee delivered its strongest simple daily gain in two weeks, closing around ₹88.69 per USD, as the U.S. dollar weakened amid geopolitical and US-political uncertainty. Indian equity indices also responded positively, with the BSE Sensex and Nifty 50 up roughly 0.9% on the day.

Why the RBI hold matters for markets
A central bank decision to pause (rather than hike) does more than freeze borrowing costs — it signals the path of future policy and affects risk appetite. By holding at 5.50% while revising growth upwards, the RBI has telegraphed that inflation is under enough control to allow a lenient stance if growth needs support. For investors this means:
* Equities: A neutral stance plus stronger growth forecasts typically supports higher earnings expectations for cyclical sectors (private consumption, banking, capital goods). The immediate market reaction — a near 1% rise in headline indices — reflects this linkage.
* Fixed income: Hints of future easing can pressure bond yields lower over time, but in the short run yields rose: India’s 10-year G-sec yield moved to the mid 6.5% area (around 6.52–6.59% on Oct 1), reflecting recent supply and global yield dynamics. That rise suggests spillovers from global rates and near-term liquidity rather than domestic policy surprise alone.
* FX: The rupee’s modest bounce was aided more by a softer U.S. dollar and potential RBI intervention than by a structural reversal. The central bank’s willingness to stabilise FX via state-bank dollar sales (if necessary) remains important given India’s open-economy exposures.

The rupee move — temporary reprieve or trend change?
The rupee’s ₹88.69 close on October 1 marked a technical recovery after a run of losses, but several factors argue caution before calling a structural reversal. First, India’s trade balance and dollar demand from importers and oil bills remain material; second, global dollar strength and yields set the backdrop for capital flows. ANZ and other banks flagged that a gradual depreciation remains a reasonable baseline absent large positive external shocks. Therefore, investors should treat the October 1 rally as a stabilising move, not definitive appreciation.

Sector and portfolio implications — practical takeaways
* Banks and financials: A neutral RBI stance plus growth upgrades typically favour loan growth and credit demand. Banking stocks often lead short-term rallies, but watch net interest margin (NIM) sensitivity to future rate cuts. If the RBI moves to ease later, NIM compression is a medium-term risk; however, higher loan volumes may offset some margin pressure.
* Exporters & IT services: Exporters benefit from a stable or weaker rupee. A sharper rupee depreciation supports reported rupee revenue for US-dollar earners; conversely, a strengthening rupee can compress margins. Given the RBI’s interventions and global dollar drivers, exporters should hedge near-term FX exposures selectively.
* Defensive consumer and domestic plays: Stronger growth forecasts support consumption themes—FMCG, retail and autos—but margin pressure from input inflation remains the watchpoint.
* Fixed income investors: With 10-year yields near 6.5–6.6%, investors must weigh duration risk versus yield pick-up. Shorter-dated government papers and dynamic bond funds offer ways to capture yields if the market expects eventual easing. Institutional investors should watch primary G-Sec supply calendars and CCIL indicative yields for yield curve shifts.

Risks and what to monitor next
Investors should track: RBI forward guidance — any explicit timing for cuts; inflation prints month-by-month to confirm the 2.6%/lower inflation trajectory the RBI signalled; external flows (FPI flows) and the US dollar index (which was ~97.6 on Oct 1) because global liquidity will dominate FX moves; and 10-year G-sec yields which set borrowing cost expectations for corporates. Market participants should prepare for volatility around US macro and political developments that have outsized short-term FX and rate implications.

Conclusion
The RBI’s October 1, 2025 hold with an upward GDP tweak provides a constructive backdrop for growth-oriented allocations in India, but the rupee’s bounce looks tactical rather than decisive. Prudent investors should overweight cyclicals and credit plays that benefit from growth if valuations permit; hedge significant FX exposure in export/import business models; and manage duration in fixed income, balancing attractive mid-6% yields against potential policy and supply shocks. The central bank bought markets a moment of clarity; the coming weeks of data and global sentiment will determine whether that clarity becomes a durable trend.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Activist Investors on Overdrive: The 2025 Surge in Corporate Campaigns

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How India’s Fiscal & Monetary Settings Are Shaping Investment Flows
Banking, Economy, Markets - October 3, 2025

How India’s Fiscal & Monetary Settings Are Shaping Investment Flows

How India’s Fiscal & Monetary Settings Are Shaping Investment Flows

On October 1, 2025 the Reserve Bank of India’s Monetary Policy Committee left the repo rate unchanged at 5.50% and described stance as neutral, while upgrading its FY26 GDP forecast to 6.8%. The policy note emphasised “policy space” to support growth if needed. On the fiscal side, the Union Budget 2025–26 set a fiscal-deficit target of 4.4% of GDP (budget estimate) after a Revised Estimate of 4.8% for FY24–25 — reflecting gradual fiscal consolidation ambitions. These headline numbers (repo 5.50%; GDP 6.8%; fiscal deficit 4.4–4.8% of GDP) are the starting point for investor reactions.

Direct transmission to bond markets and yields
Monetary calm — a pause or eventual easing — lowers the expected terminal rate and thus puts downward pressure on sovereign yields, all else equal. India’s 10-year G-sec yield traded around ~6.52% on October 1, 2025, after a brief oscillation driven by supply and global rate moves. Lower domestic policy rates or an explicit easing cycle typically compress short-end yields first; longer maturities respond to expectations for growth, inflation and fiscal financing needs. Because India’s fiscal path still implies sizeable market borrowing (net market borrowings remain a multi-lakh-crore exercise each year), the supply-side of debt can offset some rate easing, keeping the curve steeper than peers. Investors therefore watch the 10-year yield as the principal fulcrum for duration allocation.

Effects on equities — valuation and sectoral tilt
A neutral-to-dovish RBI alongside an upward GDP revision lifts the earnings-growth narrative: cyclical sectors (banks, consumer discretionary, capital goods) benefit from higher projected loan growth and consumption. Equity markets priced this in on Oct 1 with domestic indices rallying on the policy decision and bank-stock strength. But two caveats matter for equity investors: sustained outperformance requires earnings visibility — not just rate psychology — and foreign portfolio investor (FPI) activity can swamp domestic flows in the short term. Valuation multiples (P/E and EV/EBITDA) expand when real yields fall; hence, any durable multiple expansion depends on a credible path to lower real rates without fiscal slippage.

FPI flows: sensitivity to yield differentials and risk
Foreign investors trade across fixed income and equities based on relative reward-adjusted carry and near-term political or macro risk. September 2025 saw net FPI selling in equities (reports show continued net sales in September, though at a slower pace), driven by global risk-off and U.S. policy uncertainty. When India’s real yields are attractive — and global risk-on returns — FPIs buy; when global liquidity tightens or political/frictional risks rise, they exit. Hence the RBI’s communication (clarity on rate path) and the fiscal arithmetic (smaller-than-expected deficits) are both key to stabilising FPI flows. A credible glide-path on deficit reduction can reduce risk premia and entice long-duration foreign buyers of G-secs.

FX and the rupee: two-way pressure
Monetary policy and fiscal strategy combine to determine the rupee’s vulnerability to shocks. A dovish RBI may reduce carry attractiveness relative to the U.S., favouring rupee depreciation; but if dovishness is accompanied by stronger growth and narrowing fiscal deficits, that can offset depreciation pressures through improved capital inflows. On Oct 1, 2025 the rupee staged a technical rebound (closing near ₹88.69/USD) after the RBI pause and dollar softness, yet analysts still warn of gradual depreciation absent a durable improvement in the external current account or steady FPI inflows. In short, FX moves are the net outcome of yield differentials, external balances (oil/imports), and capital flow swings.

Interaction of fiscal policy with investor confidence
Fiscal consolidation commitments — moving fiscal deficit from 4.8% (RE 2024–25) toward 4.4% (BE 2025–26) — matter because investors price sovereign risk via both expected supply and macro credibility. A clear, multi-year plan to reduce deficits without choking growth reduces term premia and encourages long-term foreign holdings of government bonds and listed corporate paper. Conversely, fiscal slippage or unanticipated off-budget liabilities would raise required yields and depress both bond and equity valuations. Transparent issuance calendars and predictable bond supply are therefore as important as headline deficit numbers for market functioning.

Practical takeaways for investors
* Fixed income investors should monitor the 10-year G-sec (≈6.5% range) and RBI guidance; favour short-to-intermediate duration if supply risks persist.
* Equity investors can tactically overweight cyclical sectors if growth revisions sustain; manage risk from potential FPI outflows and currency moves.
* Foreign investors will track fiscal consolidation credibility and real-yield differentials versus the U.S./EM peers before committing longer-duration capital.

Conclusion
India’s current policy mix — an RBI pause at 5.50%, an upgraded growth outlook (6.8%) and a fiscal-deficit glide-path toward ~4.4% — creates a constructive but nuanced backdrop for capital flows. Lower-for-longer policy expectations support equities and lower short-end yields, while fiscal credibility and global risk appetite will determine whether foreign investors return in meaningful size to bonds and stocks. For market participants, the interplay of central-bank signalling, budget execution, and external-flow dynamics will dictate asset allocation decisions in the quarters ahead.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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India’s year-end IPO blitz: risks, rewards and what to watch

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RBI raises loans-against-shares limit fivefold: will it meaningfully deepen market liquidity?
Banking, Economy, Markets - October 1, 2025

RBI raises loans-against-shares limit fivefold: will it meaningfully deepen market liquidity?

RBI raises loans-against-shares limit fivefold: will it meaningfully deepen market liquidity?

On October 1, 2025, the Reserve Bank of India (RBI) announced a set of measures to ease capital-market related lending: the ceiling on loans against shares for individuals has been increased from ₹20 lakh to ₹1 crore, and the IPO financing limit per investor has been raised from ₹10 lakh to ₹25 lakh. The governor flagged these as part of broader steps to improve credit flow and deepen market participation.

The mechanics — what these limits mean in practice
“Loan against shares” refers to loans banks or NBFCs extend to borrowers who pledge listed equity as collateral. Historically, regulatory ceilings (like ₹20 lakh) constrained the simple retail and HNI use of equity as a liquidity source. Raising the ceiling to ₹1 crore expands the notional collateral value an individual can mobilise, subject to the lender’s internal margin (loan-to-value, or LTV) rules and credit appraisal. Separately, the higher IPO financing cap (now ₹25 lakh) permits investors to borrow more to subscribe to primary offerings — a direct boost to IPO subscription capacity.

Immediate market and product implications
Banks and retail lenders are likely to respond in two ways: offer larger secured lines against listed portfolios to affluent retail and HNI clients, and relaunch or expand IPO-funding products aimed at active retail investors. This could raise short-term demand for allocations in large upcoming IPOs — for example, the scheduled Tata Capital offering (₹15,511 crore) and other year-end deals — by increasing the pool of financed bids.

Liquidity vs. leverage — the risk trade-off
Easier access to cash via pledged equities increases liquidity for households and corporates, but it also raises systemic leverage and margin-call vulnerability. If lenders set high LTVs (say 50–70% for highly liquid large-cap stocks), a ₹1 crore permissible loan could imply a portfolio value of ₹1.4–2 crore pledged. In falling markets, forced liquidations or margin calls can accelerate selloffs — a classical procyclical effect. The RBI’s move removes a regulatory cap but does not automatically change prudent underwriting: banks still control LTVs, haircuts and concentration limits.

Potential winners and losers
Winners: retail brokers, margin-finance desks, NBFCs and private banks that can scale collateralised lending products; IPO issuers that may see stronger subscription momentum; and large-cap liquid stocks (which make more attractive collateral). Losers/ Risks: highly leveraged retail investors using small-cap holdings as collateral face amplified downside; volatile small-caps might see short-term selling pressure if lenders apply strict haircuts. Sectoral beneficiaries will likely include wealth tech platforms that package IPO financing and banks with dedicated prime-broker desks.

Macro and monetary context
The announcement coincided with the RBI’s Monetary Policy Committee (MPC) communication in which the policy repo rate was left unchanged (reported at 5.5% in some real-time coverage), indicating the central bank’s aim to balance monetary normalcy with targeted structural liquidity measures. By enabling more market-linked lending without broad rate easing, the RBI appears to be nudging credit allocation toward capital-market activity while maintaining overall price and financial stability vigilance.

Regulatory safeguards and open questions
The RBI has also proposed removing regulatory ceilings on lending against listed debt securities — another liberalising step — but the detailed supervisory safeguards (uniform LTV caps, concentration limits across banks, stress testing of pledged collateral) will matter for outcomes. Key open questions: Will lenders broadly adopt high LTVs or remain conservative? How quickly will IPO-financing products scale? And what contingency plans exist for abrupt market corrections triggered by margin calls? The answers will shape whether this becomes a sustainable liquidity expansion or a source of cyclical vulnerability.

Investor takeaway
Retail and HNI investors should treat the higher limits as an opportunity, not an unconditional green light. If considering borrowing against shares or using IPO financing, investors should: check lender LTVs and margin-call terms, avoid pledging concentrated small-cap positions, stress-test portfolios for 20–30% market declines, and use financing selectively for high-conviction, liquid exposures. Financial advisers should re-run scenario analyses (VaR / stress tests) before recommending leveraged solutions.

Conclusion
RBI’s decision on October 1, 2025 to raise the lending caps against equities to ₹1 crore and lift IPO financing to ₹25 lakh is a clear attempt to deepen capital-market intermediation and ease short-term funding frictions. It promises greater market liquidity and new product flows, but also reinstates an age-old trade-off between liquidity and leverage. The net effect will depend on how prudently banks price risk and how retail participants manage leverage in a potentially volatile market environment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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LG Electronics’ India unit IPO: valuation, strategy and sector implications

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LG Electronics’ India unit IPO: valuation, strategy and sector implications
Business, Equities, IPO research - October 1, 2025

LG Electronics’ India unit IPO: valuation, strategy and sector implications

LG Electronics’ India unit IPO: valuation, strategy and sector implications

LG Electronics India Ltd. has set a price band of ₹1,080–₹1,140 per share for an offer-for-sale of up to 101.8 million equity shares (≈15% stake) by its Korean parent, opening October 7 and closing October 9, 2025. At the top of the band the deal would raise about ₹11,607 crore and imply an equity valuation in the ₹77,400–₹77,500 crore range (≈$8.7 billion). The parent intends to pare a minority stake while keeping control.

The numbers — size, pricing and implied multiples
Key deal metrics are straightforward and material to investor maths:
* Offer size: ~10.18 crore shares (offer-for-sale), raising ₹11,500–₹11,607 crore depending on final pricing.
* Implied market cap: ~₹77,400 crore at the top of the price band.
* Stake being sold: 15% of the India unit.
Against LG India’s most recent fiscal figures (reported FY24 revenue ~₹21,352 crore and net profit ~₹1,511 crore), the headline valuation translates to a trailing P/E of roughly 51x (₹77,400 / ₹1,511). That multiple is high versus typical domestic appliance peers, reflecting either investor expectations of rapid earnings growth, premium brand positioning, or the gap between listed peer valuations and private-market pricing assumptions. Investors should view that P/E in light of growth projections, margins and the fact this is an OFS (no fresh capital to the company).

Why LG is listing now — strategic aims and timing
LG’s India business has expanded rapidly in recent years across home appliances, air solutions and consumer electronics, tapping booming demand for premium appliances, higher replacement cycles and a widening service footprint. An OFS lets the parent monetise part of its India exposure while keeping operational control. The timing — early October 2025 — also slots LG into a crowded year-end IPO window that includes other marquee deals (such as Tata Capital), which could either fuel demand via calendar momentum or compete for investor attention and allocation.

Investor demand dynamics — who’s likely to subscribe?
The investor base for a high-profile branded consumer name typically spans domestic retail (brand-loyal buyers), HNIs using discretionary allocations, and institutional investors (mutual funds, insurers, FPIs) searching for stable consumer plays. Given the OFS structure, anchor and institutional interest will be watched closely: strong anchor bids would help justify a premium listing, whereas weak institutional demand could result in muted listing gains or pressure on pricing. The allotment mix, lot size and minimum investment will determine retail participation levels.

Sector implications — competition, pricing power and margins
If priced at the top end, LG India’s valuation would place it among the largest appliance firms on Indian bourses by market cap, potentially re-rating sector comps. Key metrics to watch post-listing are gross margins, EBITDA margins, and return on capital employed (ROCE). LG’s premium product mix (increasing share of value-added appliances and smart devices) can sustain higher margins than mass-market peers, but competition from established domestic players and private labels limits pricing power. Investors should track quarterly margin trends and the company’s channel expansion costs (distribution, service, marketing) to gauge earnings conversion.

Risks and valuation sensitivities — what could go wrong
Three principal risks could challenge the IPO thesis: high implied valuation relative to trailing earnings means expectations are richly priced; macroeconomic/ consumer discretionary weakness could slow replacement cycles and compress margins; because this is an OFS, no fresh equity enters the business — so the parent is simply monetising an asset rather than funding growth, which may lead investors to demand a sharper growth narrative or yield premium. Currency swings and supply-chain disruptions (given reliance on imports for some components) are additional operational risks.

Practical takeaway for investors
Prospective investors should compare the IPO’s implied multiples with listed appliance and consumer durables peers, read the DRHP / RHP for segmental margins, working capital cycles and related-party transactions, and model scenarios: even modest margin expansion could justify a premium valuation, but downside scenarios (5–10% topline miss or margin compression) would produce sharp earnings stress given the high P/E. Given the OFS nature, investors should also weigh potential selling pressure from the parent over the medium term.

Conclusion
LG Electronics India’s IPO (Oct 7–9, 2025) is a marquee OFS that will test investor appetite for high-quality branded consumer franchises at premium multiples. The offering provides an avenue for global parent monetisation and for Indian investors to own a leading appliance platform, but the implied ~51x trailing P/E (based on FY24 PAT) demands a strong growth and margin story — and disciplined, long-term holders will need to track execution closely.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Can India’s Private Sector Growth Sustain Itself Amid Cooling Momentum?

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IndiQube Q2 FY26: Scaling Workspace Portfolio as Core Metrics Improve
Economy, Market News, Markets - September 30, 2025

Can India’s Private Sector Growth Sustain Itself Amid Cooling Momentum?

Can India’s Private Sector Growth Sustain Itself Amid Cooling Momentum?

India’s private sector entered the autumn of 2025 on a high—then showed signs of moderation. Flash PMI data released in late September recorded a slowdown from August’s multi-year highs: the S&P Global/HSBC composite PMI slipped to 61.9 in September from 63.2 in August, with manufacturing at 58.5 and services at 61.6. While these readings still indicate robust expansion, the moderation is meaningful because it follows exceptionally strong momentum earlier in the summer and coincides with increased external headwinds.

Where the cooling shows up: sectors and indicators
The moderation is broad-based rather than concentrated. Manufacturing’s PMI fell from its more euphoric August print—after a run that saw factory growth hit a 17-year high—suggesting a normalization in new orders and production. Services, though still expanding strongly, recorded slower demand growth and a softening in job creation. Survey respondents cited weaker international orders and heightened competition as key constraints, which dented confidence among exporters and service providers that rely on cross-border demand. Employment gains weakened; firms reported smaller increases in hiring compared with August, which is notable for an economy that depends on sustained private-sector job creation to translate growth into inclusive outcomes.

Macro context: strong growth, but rising external vulnerabilities
At the macro level, India’s headline growth remains solid. Official projections and government releases pointed to a strong start to FY 2025–26, with real GDP expanding by 7.8% in Q1 (released August 30, 2025) compared with a year earlier—evidence that the domestic economy retains considerable underlying strength. Yet this vigor exists alongside mounting external pressures. Portfolio flows turned negative in recent weeks: foreign investors had net sold about $1.3 billion of Indian equities through September 25, 2025, and August saw sizeable FPI outflows from Indian financials (roughly ₹232.9 billion, or about $2.7 billion sold from financial stocks in August). The rupee also tested weaker levels, prompting occasional market intervention. These capital-flow dynamics can blunt private-sector momentum by tightening local financial conditions and raising funding costs for corporates.

Which segments are weakening — and which are holding up
Export-oriented manufacturing and some business services have shown the earliest signs of strain because of softer overseas demand and new tariff frictions affecting global trade. Sectors with larger export exposure reported weaker new orders and tougher pricing environments. By contrast, domestic-facing sectors—construction, FMCG, certain parts of retail and organised consumption—continue to benefit from festival-season demand and easing domestic inflation trends. Financials and infrastructure-linked industries are mixed: credit demand is improving in pockets, but foreign selling and investor caution have amplified volatility in financial stocks. Overall, the pattern is one of decelerating export momentum while domestic demand remains a key plank sustaining activity.

Policy levers: what authorities can and are likely to do
Policymakers have tools to shore up private-sector momentum. The Reserve Bank of India’s immediate stance—markets expected the RBI to hold the repo at 5.50% at its early-October meeting, though a surprise cut was discussed by some economists—reflects a willingness to be data-driven and respond if growth weakens or global conditions warrant easing. Targeted liquidity support, calibrated cuts to policy rates, or regulatory nudges to ease credit to MSMEs and exporters are plausible near-term measures to sustain growth without stoking inflation. On the fiscal side, the government can deploy demand support via capex acceleration, sector-specific relief for export-linked industries, and tax measures timed around festive consumption to keep domestic demand buoyant. The effectiveness of these levers will depend on timely calibration and the persistence of external shocks.

Investor signals to watch
For investors and market observers, five indicators will be especially informative in judging sustainability:
* Final PMI releases (early October 2025) — confirmation that the flash PMI’s moderation is a temporary wobble or a deeper softening.
* Monthly FPI flow data — continued net outflows would tighten financial conditions and raise risk premia for private corporates.
* Rupee movement and central bank intervention — sharp depreciation can raise imported input costs and squeeze margins.
* Corporate earnings guidance for Q2 2025–26 — early warning if demand softening is translating quickly into revenue/ margin pressure.
* Credit off-take and bank lending rates — signs that credit availability is loosening or tightening materially, particularly for MSMEs and capex loans.

Practical implications and conclusion
India’s private sector is not collapsing — the economy had a strong Q1 and PMI readings remain expansionary — but growth is entering a more precarious phase where external shocks (trade policy, global demand) and capital outflows can quickly alter the path. A constructive baseline sees domestic demand, policy support and fiscal capex keeping growth robust; a downside scenario would combine weaker exports, persistent foreign outflows and policy passivity, which could tip the economy into a wider slowdown.
For investors and corporate decision-makers, the prudent course is to monitor the five signals above, prioritize balance-sheet resilience, and avoid over-exposure to highly export-dependent niches until clarity on global demand and capital flows returns. Policymakers can help by deploying targeted, timely measures to support credit and demand without undermining inflation anchors. The private sector’s ability to sustain growth will be tested in the coming months — and the balance between domestic engines and external shocks will determine whether the current expansion evolves into a durable upswing or a temporary burst.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Biggest Gainers from the Upcoming Nifty Rebalancing

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Why Indian Markets Bounced After a 7-Session Losing Streak
Banking, Economy, Markets - September 30, 2025

Why Indian Markets Bounced After a 7-Session Losing Streak

Why Indian Markets Bounced After a 7-Session Losing Streak

On Tuesday, September 30, 2025, Indian equity benchmarks staged a modest recovery after a seven-session slide. The Nifty 50 rose to 24,677.9 and the BSE Sensex moved to 80,469.39 in early trade — a small rebound that stopped a run of losses and reflected sector-specific buying rather than a broad risk-on shift.

What triggered the rebound: banks and metals
Two visible threads explain the recovery. First, financials — particularly public sector banks — led buying as market participants priced in regulatory changes that make credit more flexible and encourage lending. Public sector bank indices rose noticeably, reflecting expectations of easing credit conditions and better capital access for lenders. Second, metal stocks rallied on a softer U.S. dollar and commodity dynamics that improve dollar-priced commodity returns for rupee investors, boosting the metal index by around 1% on the day. Together these pockets of strength produced enough index weight to nudge the benchmarks higher.

The RBI’s role: targeted easing, not looser supervision
A critical proximate driver was a set of Reserve Bank of India (RBI) circulars published around September 30 that relax specific lending rules while strengthening oversight in other areas. The changes allow banks to revise some components of small-business loan spreads more frequently, let borrowers switch to fixed-rate loans at reset, and broaden permissible working-capital lending against gold for businesses that use gold as raw material. The package is explicitly designed to improve credit flow to MSMEs and gold-intensive industries without compromising supervisory oversight. Markets interpreted those moves as supportive for lenders’ core business — hence the banking sector rally.

How big is the market move, really?
The moves were modest: Nifty’s intraday gain was about 0.18% and Sensex added roughly 0.14% in early trade — enough to halt the slide but not to signal a sustained reversal of the recent downtrend. The rebound followed a painful stretch during which Indian indices fell over multiple sessions and experienced their sharpest weekly drops in almost seven months, reflecting a mix of domestic and global headwinds.

The sombre backdrop: foreign investor outflows and macro risks
Despite the knee-jerk rebound, the underlying story remains fragile. Foreign portfolio investors (FPIs) have been net sellers in recent weeks and months; data through September shows FPI withdrawals of about ₹7,945 crore in the month, contributing to cumulative net outflows for the year that run into tens of thousands of crores. On some measures, foreign selling in financials and other cyclical segments has been pronounced, and international hedge funds have registered sizeable short-term selloffs in emerging-market Asia — a reminder that domestic relief measures have to work against broader global risk aversion. These flows can blunt or reverse any domestic policy-driven bounce.

What investors should watch now
* RBI communications and MPC outcome (early October): The market is parsing not just the technical circulars but the Monetary Policy Committee messaging. Any signal that the RBI will prioritise growth via liquidity or forbearance could sustain the financials rally; hawkish language would do the opposite.
* FPI flows and dollar/ rupee moves: Continued net foreign outflows or a stronger dollar would keep downward pressure on risk assets and on the rupee, offsetting domestic positives.
* Earnings and valuation checks: Gains concentrated in weighed sectors (banks, metals) can make headline indices look healthier while individual stocks — especially in mid and small caps — remain vulnerable if earnings don’t meet expectations.

Tactical and strategic takeaways
For short-term traders, the rebound offers intraday and swing opportunities in beaten-up bank and metal names, but positions must be protected with tight stops because macro flows can re-assert quickly. For long-term investors, the RBI moves are constructive for credit availability and MSME financing, but they do not negate systemic risks posed by persistent foreign selling and external shocks. A balanced approach — trimming into strength, adding selectively to high-quality franchises with healthy balance sheets, and keeping an allocation to macro hedges (cash/gold or defensive sectors) — is prudent.

Conclusion
The September 30 bounce was real but contained: regulatory tweaks by the RBI acted as a catalyst for sectoral buying in banks and metals, yet the market’s longer-term direction remains hostage to global investor flows and macro signals. The rebound bought breathing room, not certainty — investors should treat it as an opportunity to reassess exposures, not as proof that the sell-off is over.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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PhonePe Files for $1.5B IPO at a $15B Valuation: A New Era for India’s Fintech Investing?

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Sustainable transition and energy security: investment implications for Indian utilities and grid players
Business, Equities, Markets - September 27, 2025

Power Grid Outperforms in a Weak Market: Is India’s Utility Sector a True Defensive Play?

Power Grid Outperforms in a Weak Market: Is India’s Utility Sector a True Defensive Play?

On 26 September 2025 Indian markets sold off sharply — the BSE Sensex fell ~733 points, pressured by global tariff headlines, rupee weakness and FII selling. In that down session many cyclical names underperformed, but Power Grid Corporation of India Ltd. (POWERGRID.NS) only dipped modestly and outperformed the broader market, signalling the classic “flight to defensive utilities” behaviour.

Power Grid — financials and ratios
Power Grid’s most recent audited FY numbers and Q1 FY26 disclosures (company investor presentation and exchange filings) give the clearest picture:
* Total income (FY 2024-25): ₹46,325 crore (reported 19 May 2025). Consolidated FY25 Profit after tax: ₹15,354 crore.
* Q1 FY26 (quarter ended June 30, 2025): consolidated revenue ~₹11,444–11,657 crore and consolidated PAT ~₹3,630–3,631 crore. These were reported in investor presentation / Q1 release (July–Aug 2025).
* Trailing twelve-month EPS (TTM): ₹16.59 (Jun 2025 TTM). Trailing P/E (market data around late Sep 2025): ~17.2x. Price/Book: ~2.8–2.9x. Market capitalisation: ≈₹2.56–2.67 trillion. Dividend declared: ₹1.25 (final dividend announced 19 May 2025; ex-date 19 Aug 2025). Dividend yield (TTM, late Sep 2025): ~3.1–3.2%.
* Return on Equity (ROE, Mar-2025 consolidated): ~17.1–17.3%.
* Return on Capital Employed (ROCE): ~12.4%.
* Total Debt / Equity (consolidated, Mar-2025): ~1.42x (≈142%) and reported net debt around ₹1.24 trillion (gross debt ~₹1.35t, cash ~₹100.8b). These leverage levels are material but typical for asset-heavy regulated utilities.

Why Power Grid (and utilities) behave defensively
* Regulated cash flows and indexation. Transmission tariff frameworks and the quasi-regulatory nature of transmission revenue create high cash visibility versus cyclical industrial firms. That makes earnings less volatile during short global shocks.
* High net margins and steady payouts. Power Grid’s consolidated net margins (PAT/Total income) and historically high dividend payout (>50% in many years) mean investors receive income even when capital returns lag. The company paid interim/final dividends across 2024–25, supporting a ~3% yield in a falling market.
* Defensive valuation anchors. With trailing P/E in the high-teens and ROE ~17%, Power Grid is not a “cheap” beaten down cyclical — but the valuation reflects predictable cashflows and dividendability. During risk-off bouts FIIs and domestic yield-seeking investors rotate into such names.

Risks that temper the defensive narrative
Utilities are defensive only to an extent. Key risks include project execution delays (which have pressured recent quarterly growth), rising interest rates impacting project financing costs, and regulatory changes around tariffs or capital cost pass-throughs. Power Grid’s leverage (debt/equity ~1.4x and net debt >₹1 trillion as of Mar-2025) means a sudden spike in funding cost would compress returns. Reuters and company filings flagged project delays as a near-term headwind in 2025 results.

Practical investor checklist — what to do now
1. If you want defence + income: hold or add high-quality regulated utilities such as Power Grid in size consistent with a portfolio yield target (i.e., 5–15% allocation). Focus on names with stable payout histories and ROE >12%. Use staged buys to average in around 16–18x forward P/E ranges.
2. If you want growth exposure with lower risk: rotate part gains from cyclicals into mid-sized transmission/renewable-integration plays, but check net debt/EBITDA and capex commitments — avoid highly levered EM infra juniors.
3. Balance-sheet check: insist on latest net debt, interest coverage (EBITDA / interest expense), and capex guidance. For Power Grid, confirm that gross debt (~₹1.35t as of Mar-2025) and available liquidity are aligned to project pipelines.
4. Hedge macro risk: maintain cash/fixed-income buffer to exploit sharper dislocations if FIIs rotate back quickly; defensive rotation can reverse fast and lead to short-term volatility even in utilities.

Conclusion
Power Grid’s modest decline amid a broader Sensex sell-off in late September 2025 illustrates the defensive pull of regulated utilities: steady cashflows, attractive ROE and reliable dividends cushion downside and attract yield-hungry flows. Investors must weigh leverage, project execution risk and valuation before adding exposure. Prudent position sizing, dividend-adjusted total return math and weekly flow/earnings monitoring are essential.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Government Mulls Relaxing FDI Rules for E-Commerce Exports — Who Wins, and by how much?

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Government Mulls Relaxing FDI Rules for E-Commerce Exports — Who Wins, and by how much?
Economy, Market News, Markets - September 27, 2025

Government Mulls Relaxing FDI Rules for E-Commerce Exports — Who Wins, and by how much?

Government Mulls Relaxing FDI Rules for E-Commerce Exports — Who Wins, and by how much?

On 25 September 2025 Reuters reported that the Directorate General of Foreign Trade (DGFT) circulated a confidential draft that would permit foreign e-commerce platforms (e.g., Amazon) to directly purchase Indian goods for export via dedicated export entities, subject to compliance and penalties. The draft is explicitly export-only and requires cabinet approval; timing for finalisation remains unclear. This is the immediate policy event investors should watch.

Why the change matters
India’s goods exports (FY25) were roughly ₹3.12 lakh crore (~US$36.6bn) for textiles and apparel segments — textiles account for a substantial share of export volumes and a direct channel to global marketplaces can materially shorten time-to-market. The policy’s objective (per reporting) is to lift export participation of small sellers (currently <10%) and to support platform goals (e.g., Amazon cited an ambition to lift exports from $13bn since 2015 toward much higher targets). If implemented, this could accelerate export volumes and unit economics for many MSME sellers.

Textiles & Apparel
Investors should watch export revenue share, EBITDA margin, inventory turns and leverage. India textile exporters posted FY24–FY25 revenue growth and modest margin improvement: sector EBITDA margins among organised apparel players are in the ~9–13% band (industry trackers report mid-single-digit to low-teens operating margins in FY25), with export-heavy firms often delivering EBITDA margin ≈11%. Healthy listed textile names often target Net Debt / EBITDA <2.0x; firms above 2.5x are leverage-sensitive if working capital expands. Expect quicker order conversion and higher inventory days if platforms hold exported inventory — test models with inventory days +10–30% scenarios.

Pharmaceuticals & CDMOs
Leading domestic pharma players show wide margin dispersion. A concrete example: Mankind Pharma’s Q1 FY26 presentation reported an EBITDA margin of 23.8% (Q1 FY26) and improving ROCE metrics — a template for consumer/OTC players riding platform exports. For export-oriented contract manufacturers, expect EBITDA margins typically ~15–25%, with Net Debt/EBITDA often <1.5x for defensive mid-caps but vulnerable MSMEs may run >2.0x leverage. Regulatory compliance and GMP certification remain gating constraints (and can affect margin conversion).

Electronics & Components (EMS / small appliances)
Industry reports (PwC, SAS Partners) show India’s electronics objective and rising exports; typical listed EMS/OEM incumbents trade with EBITDA margins ~6–12% depending on product mix. For capital-light electronics suppliers (components / accessories), EBITDA margin nearer 8–10% and Net Debt / EBITDA 0.5–1.5x are common. Unit economics for cross-border e-commerce rely on logistics cost per order and return rates; model take-rate / fulfilment cost per order for margin break-even (>10% of AOV is risky).

Agri-processing & Food (packaged foods)
Agri-processors tend to have lower operating margins; listed players show EBITDA margins ~6–12% (higher for branded, lower for commodity processors). Working capital days (inventory + receivables) are critical: watch OCF / Sales and current ratio. Firms with Operating Cash Flow / Net Income >1.0 and Net Debt/EBITDA <2.0x will scale export pilots more comfortably.

Logistics & Fulfilment partners
Logistics partners that handle cross-border fulfilment often deliver EBITDA margins ~7–10%; their incremental scale benefits (higher utilisation) can lift margins 150–300 bps. Track asset turns, EV/EBITDA and free cash flow conversion.

What investors should do now
1. Map exposure: identify portfolio names with >20% seller exposure to platform exports or supply-chain links (logistics, packaging).
2. Wait for formal policy text: do not assume the draft will pass unchanged; focus on cabinet approval and DGFT notification dates.
3. Screen for unit economics: prefer companies where adjusted EBIT margin is positive or improving and Net Debt/EBITDA <2x.
4. Use event-driven sizing: initiate small positions on confirmed pilots or sanction letters; increase on clear tariff/compliance frameworks.
5. Hedge distribution risk: consider short-dated hedges or reduce size where seller concentration or low cash conversion is evident.

Conclusion
The DGFT draft of 25 September 2025 opens a possible new export channel that could materially improve market access for Indian SMEs. Textile, pharma, electronics and agri-processing could be principal gainers – but investors must demand hard, prospectus-level unit economics, low leverage and explicit policy clarity before re-rating names. The policy’s final shape and cabinet timetable will determine who wins and who gets squeezed.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Ashok Leyland–CALB Tie-Up: A Game Changer for EV Investors

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Ashok Leyland Rally Extends: Growth, EV Strategy, and Investor Outlook
Automobile News, Autos, Business - September 26, 2025

Ashok Leyland–CALB Tie-Up: A Game Changer for EV Investors

Ashok Leyland–CALB Tie-Up: A Game Changer for EV Investors

Ashok Leyland announced a multi-year strategic collaboration with China’s CALB Group that will begin with importing cells and assembling battery packs in India, with an aim to move to domestic full-cell production within roughly five years. The company has signalled a headline capex plan of about Rs.5,000 crore (≈ $570–580 million) for next-gen battery manufacturing and related facilities.

An Overview of CALB and Its Significance
CALB (Changzhou CALB Energy Co./CALB Group) is one of China’s leading lithium-ion battery makers — ranked among the top three domestic players by several industry trackers — with multi-billion dollar revenues and an aggressive international expansion play (including gigafactory projects overseas). CALB brings cell design IP, pack-level expertise and manufacturing know-how that Ashok Leyland lacks at scale today. Partnering with a proven cell supplier accelerates time-to-market for commercial vehicle electrification programmes.

Financial Context — How Impactful is Rs. 5,000 Crore for Ashok Leyland?
On group and balance-sheet metrics, Ashok Leyland is comfortably sized to make targeted battery investments while funding core vehicle operations. For FY2025 the company reported record revenue and improved margins, with consolidated revenue in the vicinity of Rs.49,500 crore and PAT in the low thousands of crores; recent quarterly reporting showed EBITDA of ~15% (Q4 FY25 EBITDA ≈ Rs.1,791 crore). Key per-share metrics—basic EPS around Rs.11.25 and book value per share near Rs.39—illustrate healthy earnings power and a strengthening cash flow profile to support capex and R&D. Market-cap and valuation metrics place the stock in a range where investors are pricing growth expectations for EV transition.

Strategic Implications for the EV Supply Chain
* De-risking battery supply: a local pack-assembly and eventual cell manufacturing capability reduces reliance on fully imported battery systems and shortens lead times.
* Cost & margin pressure: domestic cell production can compress per-kWh costs over time and protect vehicle OEM margins (critical for commercial vehicles where battery is a large portion of system cost).
* Ecosystem ripple: suppliers (BMS, thermal management, pack-integrators), real estate and O&M services in the region stand to benefit from factory and campus builds.

Critical Financial Indicators for Investment Decisions
* Capex intensity: the Rs.5,000 crore commit is the headline; track how much is front-loaded vs. phased over 3–5 years and whether government incentives (PLI/subsidies) offset capex.
* Gross margin / EBITDA conversion: watch for changes in vehicle gross margins as in-house battery sourcing replaces bought-in packs; a 100–200 bps swing materially affects EPS.
* Return on Capital Employed (ROCE): battery plants are capital-heavy; a multi-year ROCE recovery profile will determine the value added versus returning cash to shareholders.
* Per-kWh cost trajectory: investors should monitor announcements around per-kWh costs for assembled packs and, later, cell production — this drives competitive pricing for fleet customers.
Risks and Counterpoints
There are execution and geopolitical risks. CALB has faced patent-dispute headlines and its China ties could become sensitive in some policy contexts; converting a pack-assembly line into full-cell manufacturing requires time, talent and capital. Domestic competition (Tata, Ashok Leyland’s OEM peers) and global battery firms are also scaling, so market share is not guaranteed. Finally, battery economics are highly cyclical and raw-material prices (nickel, lithium, cobalt) remain a risk to realized margins.

Recommended Investor Actions
* If you are long-term (≥3–5 years): this is a strategically positive move. Maintain or modestly accumulate positions if Ashok Leyland fits your EV/industrial exposure thesis, but size allocations knowing battery returns are lumpy and realized benefits may take several years. Monitor capex phasing and first-year pack margins.
* Event-driven traders: watch for operational milestones (MoUs → definitive agreements → ground-breaking → first pack shipments). These events can trigger re-rating if accompanied by cost or revenue guidance.
* Sector plays: consider adjacencies — listed suppliers (BMS, pack integrators, thermal-management vendors), local EMS/real-estate names near plant locations, and logistics providers — that might see earlier revenue impact. Do due diligence on balance sheets and margins before speculating.
* Risk management: cap position sizes, set stop-losses or rebalancing rules, and keep an eye on raw-material price trends and policy shifts affecting Chinese tech partnerships.

Conclusion
Ashok Leyland’s tie-up with CALB and a headline Rs.5,000 crore investment marks a meaningful step toward localized battery capability in India’s commercial-vehicle segment. For long-term investors, it raises the company’s addressable EV opportunity and supply-chain control; for traders, it creates event-driven catalysts. The key to value creation will be execution speed, per-kWh cost improvement and converting pack capacity into revenue while maintaining healthy margins. Monitor quarterly capex disclosures, pack/unit economics and early revenue recognition tied to the new facilities.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Infosys’s ₹300 crore Mohali Campus: What it Means for the IT Sector and Investors

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