Menu

Markets

Gold Prices Plunge as Israel-Iran Ceasefire Triggers Market Volatility
Equities, Markets - February 24, 2025

Gold Prices hit all time high amid Trump Tariffs

Gold Prices hit all time high amid Trump Tariffs

 

Overview

Gold prices remain stable, poised for an eighth straight weekly rise, owing to fears over US President Donald Trump’s tariff plans, which could spark trade wars and drive inflation. On Thursday, the spot gold price touched an all-time high of $2,954.69. Officials at the United States Federal Reserve are warning of increased inflation concerns as a result of Trump’s initiatives.

 

As of 0020 GMT, spot gold was stable at $2,934.82 per ounce. The U.S. gold futures fell 0.1% to $2,950.10, while bullion reached an all-time high of $2,954.69 on February 20, 2025. Bullion is viewed as a hedge against geopolitical dangers and inflation, but rising interest rates reduce the non-yielding asset’s appeal. Gold has increased over 12% so far this year, setting numerous records as economic and geopolitical uncertainty increase.

 

Trump’s Tariffs so far

Trump stated last week that he would announce new tariffs within the next month or sooner, adding lumber and forest products to already announced taxes on imported vehicles, semiconductors, and pharmaceuticals. This comes after an additional 10% fee on Chinese goods and a 25% tariff on steel and aluminum.

 

On the geopolitical front, Trump shifted course on Friday, stating that Russia had indeed invaded Ukraine and that Kyiv would soon sign a minerals agreement with the US as part of attempts to end the war.

 

Meanwhile, gold exports from Switzerland increased year on year in January as shipments to the United States reached their highest level in at least 13 years, offsetting decreased deliveries to top users China and India, according to Swiss customs statistics released on Thursday.

 

Demand for physical gold remains muted

Physical gold demand in China and India remained minimal last week, as buyers avoided purchases due to record-high prices. Spot silver fell 0.1% to $32.58 per ounce. Platinum rose 0.7% to $976.25, while palladium climbed 0.4% to $972.93.

 

Traders eye Fed Rates

Traders are eagerly watching the Federal Reserve’s interest rate trajectory for signals, as Trump’s policies are viewed as inflationary. If strong inflation causes the Fed to keep rates steady, gold’s appeal as a non-yielding asset will wane. Markets will now look to the Fed’s preferred inflation measure, the Personal Consumption Expenditures (PCE) index, which is coming on Friday, for more confirmation of the central bank’s rate path while central banks continue to add to their gold stockpiles, while gold ETFs change from net sellers to marginal purchasers, further bolstering prices.

 

Gold Prices in India

Going into 2025, gold has not only reversed the price reduction witnessed in November-December (a 6% decrease), but it has also consistently achieved new highs. So far in 2025, the LBMA gold price AM in USD has increased by $286/oz, or 10%, to $2,938/oz. Domestic prices have risen in tandem with international pricing, jumping 14% to a record INR86,831/10g, with the bigger gains owing to the INR’s weakness versus the USD (1.1% depreciation y-t-d). According to the World Gold Council’s study, the rise in gold prices is due to a combination of geopolitical uncertainties, growing inflation fears, and increased investment flows.

 

RBI increases its gold reserves

The RBI resumed gold purchases in January, after suspending in December after 11 months of buying. The central bank added 2.8t of gold to its holdings last month, bringing its total gold reserves to a new high of 879t. This fresh buying signals that the RBI will continue to accumulate gold, following a big purchase of 72.6t in 2024, which made it the third largest buyer of gold among world central banks that year.

 

In addition to increasing its gold holdings, the RBI has been increasing the proportion of gold in its foreign exchange reserves, which increased from 7.7% in January 2024 to 11.31% in early February 2025. Along with a decrease in its holdings of foreign currency assets (from 88.5% to 85.2%), this increase shows the RBI’s efforts to diversify its foreign exchange reserves.

 

Conclusion

The prices of gold reached record levels in 2025 owing to gold prices skyrocketing due to US tariff policies, inflation concerns, and ongoing geopolitical tensions. While demand is low in vital markets, gold continues to be a strong hedge against economic risks. Gold’s influence will be affected by the Federal Reserve’s interest rate policies, while the gold price will be sustained by actions such as increasing reserves of gold at the Reserve Bank of India which point towards diversification.

 

 

The image added is for representation purposes only

Bain Capital likely to close Manappuram Finance Deal

 

 

 

 

, , 0 Comment
Read More
Torrent Power Teams Up with BP for LNG Partnership
Equities, Markets - February 24, 2025

Bain Capital likely to close Manappuram Finance Deal

Bain Capital likely to close Manappuram Finance Deal

 

Overview

An agreement for Bain Capital to buy a majority share in Manappuram Finance is almost finalized. A secondary share sale by promoters and further funding from Bain are part of the deal, which may raise Bain’s ownership to 46%. It is anticipated that the deal will result in early joint operations and a new CEO.

 

Details of the Deal

Bain Capital is negotiating a deal with Manappuram Finance’s promoters to acquire a majority share in the Kerala-based gold loan provider and non-bank lender. The Reserve Bank of India removed limitations on the latter’s subsidiary, Asirvad Micro Finance, a month ago. The promoter group, led by managing director and CEO Nandakumar VP, currently owns 35.25% of Manappuram, which has a market valuation of Rs 17,000 crore based on its BSE closing share price of Rs 200.85 on February 21, 2025.

 

While the preferred allocation is expected to be priced at a premium of 12.5-15% over the current market price, the secondary share sale will be priced at 22.5-25% above Friday’s closing price, according to the sources.  The blended price is likely to be Rs 237-240 per share.

 

The transactions, which will result in Bain acquiring a quarter of the company, will be followed by a voluntary open offer for an additional 26% interest due to a change of control, at a price comparable to the secondary share sale.  If the open offer is fully subscribed to, Bain might wind up controlling up to 46% of the new equity capital base, spending Rs 9,000–10,000 crore.

 

Managerial changes on the way

Even though the company will initially be controlled jointly, Bain is considering affirmative rights, which will give it management control. The Boston-based fund will also hire a new CEO, with Nandakumar and his family members taking on non-executive roles in the organization.

 

Stock Performance of Manappuram

Manappuram’s stock has climbed 36.67% in the last three months ahead of the transaction.  However, the regulatory intervention in October of last year, which barred IPO-bound Asirvad Microfinance from making new loan disbursements due to inadequacies in its pricing policy and evaluation of borrowers’ income and debt, caused a 37.5% drop in the share price from its 52-week high.

 

Manappuram Finance shares rose 4% to a high of Rs 209 on the BSE in early trade on Monday, after negotiations between the company Bain Capital neared a conclusion.

 

Manappuram’s history for buy-ins or M&A

Manappuram has flirted with many PE and shadow banks, including IDFC and Poonawalla Finance, as well as PE funds like Carlyle, over the years to investigate a buy-in, business carve-out, or even a merger of operations, but nothing has come of it. Nandakumar’s succession was called into question when his daughter Sumitha Jayasankar was appointed executive director to the board and many anticipated her to take over the reins.

 

Financial Performance of Manappuram

Manappuram’s consolidated assets under management (AUM) increased 9.5% year on year to Rs 44,217 crore by the end of December. The AUM, however, fell 3.3% sequentially due to the regulatory ban on Asirvad’s expansion. Manappuram’s core gold loan business increased 18.8% year on year to Rs 24,504 crore, accounting for 55.4% of the combined AUM.

 

Asirvad, like its microfinance peers, is still under pressure, requiring Manappuram management to provide direction on a shift toward secured lending — both gold and non-gold loans. The company lost Rs 189 crore in the third quarter due to a 5.8% increase in gross non-performing assets, despite wiping down bad loans worth Rs 400 crore.

 

It also violated financial covenants governing its borrowings and is negotiating with its lenders for a waiver of their right to seek quick repayment of debts.  So far, no lender has requested immediate payback following this noncompliance. Manappuram owns 97.6% of the microfinance subsidiary, which the group acquired in 2015 and expanded in quest of higher returns.

 

Potential Risks

Asirvad’s profitability has been impacted by collection challenges in the microfinance sector caused by a variety of factors, including climatic disruption, dilution of the joint liability group model, weekend borrower discipline, and external influences on microfinance borrowers, according to Nandakumar in a post-earnings analyst call. Furthermore, he stated that it has implemented extensive corrective steps to rationalize the cost and disbursement with rigorous underwriting.

 

Expert views

The organised gold loan market is expected to grow to Rs 15 lakh crore by March 2027, from Rs 7.1 lakh crore at the end of FY24. Morgan Stanley analysts believe the company’s valuations are low, with a standalone share price of about nine times estimated profits per share for fiscal 2026, which it claims is among the lowest in the industry in terms of return on equity.

 

Conclusion

Thus, Bain Capital’s acquisition of a majority stake in Manappuram Finance will mark a remarkable change for the company and could increase Bain’s stake to 46%. Even with recent shifts in regulation and scrutiny on the microfinance subsidiary Manappuram, Asirvad, the company’s gold lending division is prospering.  In addition to the change in a recently appointed CEO, the new structure will drive further focus toward the facilitation of secured loans. Manappuram is likely to experience some growth in revenues due to the anticipated expansion in the gold loan market, but the doubts raised from Asirvad’s problems still linger.

 

 

 

The image added is for representation purposes only

Surge in adoption of EV in quick commerce led to expansion in business for battery-swapping companies

 

 

 

 

, , 0 Comment
Read More
Why gold funds saw a record weekly inflow — and what it signals for Indian investors
Equities, Markets - February 24, 2025

Gold investment remains high in the midst of subdued gold jewellery demand

Gold investment remains high in the midst of subdued gold jewellery demand

 

In the midst of high jewellery prices, the retail jewellery market records subdued demand. Despite this, investment in gold continues to remain strong in the upcoming terms as per the report of the World Gold Council (WGC).

 

WGC Report

In the latest report of WGC stated that people need to make their statutory payments and tax-saving investment at the end of the financial year 2025. It will lead to contraction in discretionary spending which in turn slowdown demand for jewellery. Though, if the prices of gold stay stable then the demand for jewellery can be boosted in the financial year 2026.

 

Performance of Gold in  CY2025

In the month of November to December recorded a contraction of 6 percent. Coming to the year 2025, the gold prices recorded a turning point as the prices not only rallied but also hit new highest records. 

In the year 2025, the LBMA gold price surged to $2,938 per ounce compared to $2,86 per ounce which accounts to growth of 10 percent. In India, domestic prices are increasing in line with the international gold price trends. It has surged to 14 percent which accounts to around Rs. 86,831 per 10 grams. The reason for the rally is also partially due to depreciation of Indian Rupee against US Dollar by around 1.1 percent year-to-date.

Other factors contributing to the rally of gold prices are inflation level, expansion in investment flows, and growing geopolitical tension in the world.

 

Impact of the gold prices on the retail market

Since the start of the year 2025, the gold prices continue to record new all-time highs in the market. It has adversely impacted the demand in the retail gold jewellery market. The demand in the year 2025 was also affected by uncertainty pertaining to the announcement of the Budget 2025. 

In the month of January, 2025, the gold demand contracted in the retail market and continued in the month of February as well. This situation persisted even after the end of the inauspicious period in the Hindu Calendar and in the post Union budget. The purchases during the wedding season are usually high but it is recorded to remain low.  The reason for this is many consumers have already bought gold in the month of November, 2024 when gold prices were low. In the current scenario, people are exchanging their old gold with new gold jewellery rather than buying a new one.

Further, many consumers are selling their old golds to get profits in this situation of high gold price trends.

 

Impact on jewellery retailers

In the midst of subdued gold jewellery demand, many retailers are not ready to restock. The reason for this is difficulty in fulfilling payment terms and conditions with the jewellery manufacturers. Overall, it has led to liquidity squeeze in the industry. 

 

Gap between domestic and international gold prices

The domestic market in India is facing the issue of slowdown in gold jewellery demand. Its effect is clearly observed in the price gap between domestic and international prices. Following the month of December, the price gap between domestic and international prices is increasing. It was earlier US$ 3 per ounce in December and now it is US$ 23 per ounce. 

Despite the moderate demand for jewellery in the market, people are keen to invest in gold coins and bars. Investors project further rise in the gold price and this is the reason why they continue to invest in these investment products. 

 

Performance of ETFs

In the month of January 2025, Indian gold ETFs recorded growing preference by investors. As per the data of Association of Mutual Funds in India (AMFI), the gold ETFs registered net inflow of about INR 37.5 billion ( 435 million US dollars) in the month of January. It is a major hike compared to an average inflow of about INR 9.4 billion (112 million US dollars) in the last 12 months. The total assets under management (AUM)  of gold ETFs surged by 15 percent which accounts to INR 51.8 billion (6 billion US dollars) compared to the AUM in the last month. Further,  4.6 tonnes of gold were added in the overall holdings leading to total holdings of 62.4 tonnes.

In the month of January, many investors redirected their free cash flow by investing in Gold ETFs. The reason for this is to diversify their investment portfolios in the midst of growing domestic and international uncertainty. One of the reasons for this is subdued performance of the equity market led many investors to prefer gold ETFs as a safer investment option.

In the month of February, a new gold ETF product was launched known as 360 ONE Gold ETF. It led to 19 gold ETFs in India, indicating a robust growth in this segment.

 

The image added is for representation purposes only

Surge in adoption of EV in quick commerce led to expansion in business for battery-swapping companies

 

 

 

 

, , 0 Comment
Read More
Walmart’s Indian Bet: E-commerce and Sourcing Power Next Wave of Global Growth
Equities, Markets - February 24, 2025

Surge in adoption of EV in quick commerce led to expansion in business for battery-swapping companies

Surge in adoption of EV in quick commerce led to expansion in business for battery-swapping companies

 

In recent times, the quick commerce sector is recording a surge in use of electric vehicles for the purpose of last-mile deliveries. It has resulted in higher business activities for startups firms developing charging infrastructure and also providing battery swapping services.

 

Adoption of EVs by quick commerce platforms

The Indian quick commerce sector is considered to be growing at a rapid speed with intense competition among various platforms. The companies like Swiggy Instamart, Blinkit, Flipkart’s Minutes, and Zepto are competing to grab a large share in the market. In midst of this intense competition, these platforms are focused on adopting electric vehicles as a means of transport for deliveries in order to reduce operational costs. Though the majority of money is spent on their marketing initiatives, dark store expansion, and discounts, these companies are focusing on expanding EVs for deliveries. 

 

Impact on battery swapping and charging infrastructure business

The shift in approach of quick commerce platforms towards adopting EVs has resulted in remarkable growth in business for startups like BatterySmart, EMO Energy, Kazam, and more startups. These startups focus on giving charging and energy management solutions to the delivery partners of quick commerce companies. 

 

Performance of EMO Energy

The startup EMO Energy’s 90 percent of business comes from its services to quick commerce companies. This company focuses on giving hardware and software battery solutions to its clients. The business has successfully established fast-charging facilities at close to 200 stores of quick commerce platforms like BigBasket and Blinkit. In the future, the company has goals to expand it around 10,000 stores and about 100,000 EVs will be on the road using the company’s battery packs and energy ecosystem.

 

In this year, the company successfully raised equity funding of about 6.2 million dollars. Its aim was to expand its two-wheeler and three-wheeler energy solution to be provided to more than 100,000 EVs in the upcoming two years. 

 

In the years 2022 to 2024, the EV sector in India recorded contraction to fund raising close to halved. The reason for this is a change in policies and investors growing preference for better profitability. In the midst of this scenario, EMO Energy remained positive and raised funding of around 6.2 million dollars. It believes that surge in demand from the quick commerce segment will lead to rise in interest of investors towards the EV sector.

 

Performance of Kazam

In the period of December 2023 to December 2024, Kazam recorded growth revenue by 126 percent. The company serves charging products and services to BigBasket, Zepto, and Blinkit. The company recorded its second biggest contribution in revenue growth from the services provided to the quick commerce segment. 

 

The company provides services to more than 300 dark stores and fulfillment hubs in 53 cities in India. According to the company, adoption of fleet and charging management systems leads to about 30 percent of operational efficiency in the business activities. The cities like Bengaluru and Delhi are recorded to have more than 35 percent of their quick commerce deliveries operating on EVs. It is anticipated to hit 50 percent in the year 2027. 

 

Performance of BatterySmart

According to BatterySmart, the gig workers working for quick commerce turned out to be its major customer segment of the company as strong demand for battery-swapping services is recorded in this segment.  The company works with Zomato and Zepto by providing them easy access to battery swapping services. In the previous year, the company partnered with Zepto to give battery swapping services to its delivery partners. It gave access to more than 1,000 battery-swapping units. In the financial year 2024, the company recorded revenue growth of Rs. 165 crore which is almost three times higher than Rs. 56 crore of revenue growth in the last financial year. 

 

Steps taken by quick commerce platforms

In the month of September, 2024, the companies like Blinkit and Zomato have delivery partners using EVs which accounts to 49,000 delivery partners across 400 cities in India. Zomato has future plans to make its delivery activities 100 percent electric by the year 2030.

 

In the month of August, 2024, Flipkart Minutes entered in the quick commerce segment. It is also focusing on broadening and developing its EV infrastructure. For this, it is developing charging stations at its dark stores to ease logistics activities. 

 

The Walmart-owned company stated that around 20 percent of their deliveries are carried out with the use of electric vehicles. The company is presently working on broadening its EV fleet. 

 

Impact on EV manufacturers

The growing adoption of EVs by quick-commerce companies has led EV manufacturers to expand their manufacturing activities. In present times, Ola Electric launched its new electric scooter model which provides a facility of removable batteries. It is particularly made for gig economy workers as many of them work as delivery partners of quick commerce companies. 

 

In conclusion, the growing adoption of EVs by quick commerce platforms has led to increase in business activities for EV startups. 

 

 

The image added is for representation purposes only

Personal Loan Growth contracted to 13.7 percent in the third quarter of FY25

 

 

 

 

, , 0 Comment
Read More
Hike in limit on small-value credits of Urban co-operative banks
Banking, Equities, Market News, Markets - February 24, 2025

Personal Loan Growth contracted to 13.7 percent in the third quarter of FY25

Personal Loan Growth contracted to 13.7 percent in the third quarter of FY25

 

Overview

Personal loan growth has slowed to 13.7% by December 2024, down from 15.2% in September, due to regulatory warnings. Total bank credit growth also slowed, despite the fact that all population categories continued to rise by double digits. Lending for commerce, finance, and professional services increased, while credit for agriculture and manufacturing remained stable.  Aggregate deposits increased by 11%, with term deposits showing significant growth.

 

Personal Loan Growth slowed down

Personal loan growth slowed in the December quarter due to regulatory concerns about potential overheating. According to quarterly data from the Reserve Bank of India, the annual growth rate for the personal loan segment was 13.7% in December 2024, down from 15.2% in September. Total bank credit growth also slowed to 11.8% in December 2024, down from 12.6% in September.

 

Further, at the end of January this year, RBI released key data according to which, bank lending to the personal loan segment moderated in December to 14.9% year on year, owing mostly to a reduction in growth in other personal loans, vehicle loans, and credit card outstanding. The RBI has issued statistics on sectoral bank credit deployment for December 2024, which was collected from 41 select commercial banks and accounts for approximately 95% of total non-food credit deployed by commercial banks.

 

The banking regulator stated that all population categories in rural, semi-urban, urban, and metropolitan branches of banks experienced double-digit credit growth, albeit with some slowdown which was true for both public and private sector banks.

 

Credit distribution

Previously, the RBI had presented that the growth in non-food bank credit as of the fortnight ending December 27, 2024, slowed to 12.4% on a year-over-year (y-o-y) basis from 15.8% in the same fortnight the year before. The data showed that bank lending to agricultural and related businesses increased by 12.5% year over year as of the fortnight ending December 27, 2024, compared to 19.4% for the same fortnight the year before.

 

Additionally, industry credit growth stayed relatively constant at 7.4% annually. Out of all the major industries, food processing, petroleum, coal products and nuclear fuels, and all engineering had the highest growth rates. Nonetheless, the infrastructure segment’s credit growth slowed.

 

Further, credit growth in the services sector also slowed to 13.0% year-over-year as of the fortnight ending December 27, 2024. For the equivalent two weeks of the prior year, the growth was 20%. The primary trigger of the moderation was the slower expansion of lending to trade segments and non-banking financial companies (NBFCs). However, credit growth for professional services and computer software increased year over year.

 

Recently, RBI stated that the credit to agriculture and industry sectors also saw some slowing in growth, while lending to commerce, finance, and professional/other services increased in the third quarter. About half of the loans granted by banks had interest rates ranging from 8% to 10%, while approximately 16% had interest rates less than 8%. According to the RBI, the remaining loans carried interest rates of 10% or above.

 

Deposits saw an uptick

Meanwhile, aggregate deposits increased by 11% in December 2024, compared to an 11.7% rise a quarter earlier.  Granular data revealed that approximately 80% of incremental term deposits mobilized between April and December 2024 were held in the one to three-year maturity bucket, indicating a potential lag in the softening of banks’ deposit costs. The proportion of total term deposits with an interest rate of 7% or more climbed from 61.4% to 70.8% by December 2024.

 

Term deposits increased 14.3% year on year, while savings deposits increased by 5.1%.  This resulted in a further increase in term deposits’ percentage of total deposits to 62.1% at the end of December, up from 60.3% the previous year.

 

Q3FY25 Banking Sector Performance

The banking industry reported a mixed quarter, with modest business momentum, high credit costs, and moderate margins. As observed in both public and private sector banks, the growing cost of deposits and heightened competition for funds contributed to the ongoing reduction in net interest margins (NIMs). All segments saw a slowdown in credit growth, with corporate lending recovering slowly as a result of a muted capital expenditure cycle and pressure on large-ticket loan prices.  Risks associated with asset quality are still a major worry, especially in unsecured lending, where personal loan and microfinance portfolio slippages are still common.

 

Systemic credit offtake as of December 31, 2024, was INR 175.9 trillion, representing an 11.3% YoY growth rate that is lower than the 12.6% growth rate from the previous year (excluding merger impact).  Our coverage’s overall credit growth stayed modest at about 10.3% year over year. Secured lending, such as home, auto, and SME loans, drove expansion in retail credit, which continued to grow albeit at a slower rate. A slowdown in unsecured lending, which includes credit cards, personal loans, and microlending, was brought on by tighter regulations, increased risk perception, and an increase in delinquencies. HDF Commercial Bank continues to show a modest gain of 3.0% YoY (+0.9% QoQ), while Bandhan bank led the growth with 15.6% YoY (+1.1% QoQ).

 

Conclusion

To sum up, legal measures led to a decrease in the growth rate of personal loans in December 2024. The expansion of bank credit also moderated.  The lending development to professional services, finance, and commerce grew while Manufacturing and agriculture remained stable.  Investor’s shifts in their preferences resulted in deposit growth, especially term deposits.  The banking industry had mixed results during Q3FY25 so far with concerns regarding asset quality, most notably in unsecured lending, loan growth has slowed with a shift toward an emphasis on secured lending, which is a more positive quality for the industry.

 

 

The image added is for representation purposes only

India’s Ports Sector to increase capacity by the financial year 2028

 

 

 

 

, , 0 Comment
Read More
Port of Los Angeles Records Significant Drop in Imports Due to U.S. Tariff Impact
Economy, Equities, Market News, Markets - February 24, 2025

India’s Ports Sector to increase capacity by the financial year 2028

India’s Ports Sector to increase capacity by the financial year 2028

 

Industry Overview

India’s ports play a crucial role in its trade and economy, accounting for 95% of export volumes and 70% of export values. India has 13 major ports and more than 205 designated minor and intermediate ports. Indian ports and the shipping industry are critical to the country’s economic progress. India is the world’s sixteenth-largest marine country, with 7,516.6 km of coastline and 20,275 km of national waterways throughout 24 states. This posture aligns India with 80% of the global maritime oil traffic, highlighting its potential to become a significant maritime player.

 

The Indian government plays a vital role in assisting the port industry and has permitted Foreign Direct Investment (FDI) of up to 100% through the automatic route for port and harbor building and maintenance projects. It has also provided a 10-year tax break for businesses that construct, maintain, and operate ports, inland waterways, and inland ports.

 

In FY24, all major ports in India handled 817.97 million tonnes (MT) of cargo volume, up 4.45% from 784.305 million tonnes in FY23. India’s merchandise exports in FY23 reached $451 billion, up from $417 billion the previous year. The government has implemented many initiatives to improve operating efficiency, including mechanization, deepening the draft, and expedited evacuations.

 

Capacity in increase by FY28

According to Motilal Oswal Financial Services, India’s ports sector is expected to increase capacity by 500-550 MTPA (Maximum Torque Per Ampere) yearly between FY2023 and FY2028. Further, port expansion will be driven by increased handling of petroleum, oil, and lubricants (POL), coal, and containerized goods. India’s ports today handle 95% of the country’s export volume and 70% of its export value, demonstrating the sector’s importance in facilitating trade.

 

The sector currently works at a capacity of 2,604 MTPA, although this is likely to increase dramatically in the next years. Between FY23 and FY28, India’s ports are forecast to increase capacity by 500-550 MTPA per year, driven by sustained expansion in petroleum, oil, and lubricants (POL) handling, as well as coal and containerized cargo.

 

In addition, freight traffic is likely to increase at a constant annual pace of 3-6%, with utilization rates stabilizing at around 55% in the medium term. Container traffic is expected to expand at a 4-7% annual rate over the next five years, driven by rising imports, lower freight costs, and the normalization of global supply chains. Transshipment, which today accounts for roughly 25% of India’s container throughput, remains a significant market, with key ports such as Chennai playing an important role in supporting it. The research also emphasizes the different responsibilities that major and non-major ports play in India’s port ecosystem.

 

Major and Non-major ports to play a vital role

Major ports, which are supervised by the central government, are typically located near industrial areas and handle a diverse range of cargo types based on regional demand. However, shared access channels cause congestion at these ports on a regular basis.  Non-major ports, administered by state governments or private operators through public-private partnerships, exhibit greater operational flexibility and efficiency, resulting in less congestion.

 

Non-major ports experienced a 7.6% increase in cargo traffic in FY23, exceeding major ports’ 4.7% gain.  According to the research, both big and minor ports will play important roles in boosting the sector’s overall growth.  India’s ports will continue to play a crucial role in trade and economic growth due to increased cargo traffic, improved infrastructure, and operations, according to the research.

 

Government initiatives

The Indian government has adopted policies and initiatives to improve port capacity and efficiency. The Sagarmala Programme, which began in 2016, is a major program targeted at lowering logistics costs for both export-import (EXIM) and domestic freight. The program aims to boost port capacity to 3,300 MTPA by 2025, with investments of INR 6t over 800 projects.  Optimizing logistics efficiency and lowering transit time can save INR 350-400 billion yearly.

 

Other initiatives include the Maritime Amrit Kaal Vision 2047 proposes to create six mega ports with world-class facilities, increasing India’s port handling capacity from 2,500 MTPA to 10,000 MTPA by 2047. This strategy aims to achieve 100% cargo handling at PPP berths and integrate sophisticated digital technologies into port operations.

 

Conclusion

India’s ports are vital for its economic trade and growth, and with the country’s massive coastline and strategic neighborhood, there are significant upbeat opportunities for marine expansion. The Government’s policies to support FDI, Sagarmala, and the Amrit Kaal Vision 2047 are fostering growth in capacity and operational efficiency. All these efforts along with the rising significance of India’s major and minor ports, make them powerful engines for the country’s economic growth and global trade competitiveness in the future.

 

 

The image added is for representation purposes only

US oil export to India becomes double in the month of February

 

 

 

 

, , 0 Comment
Read More
https://www.equityright.com/bel-bags-fresh-defence-orders-worth-%e2%82%b9585-crore-expands-strategic-focus/
Equities, Market News, Markets - February 24, 2025

US oil export to India becomes double in the month of February

US oil export to India becomes double in the month of February

 

On the 10th January, 2025, the Trump regime imposed sanctions on Russian oil producers, tankers and insurers. The aim of these sanctions was to prohibit secret oil exports and also to block money used for the war with Ukraine. Prior to these sanctions, Russia exported oil in India to around 30 percent. 

In present times, the sanctions have resulted in contraction of crude oil exports from Russia to around 25 percent of the total Russian oil exports to India. In this ongoing scenario, the oil exports from the USA have come close to twice of the earlier export levels. The government of India also plans to expand the level of imports of American energy to about two-thirds which accounts to 25 billion dollars. In the last year, it was around 15 billion dollars. 

 

Russia and USA’s share in India’s crude oil imports

In the initial 20 days of the month of February, 2025, Russia exported an average of 1.07 million barrels of oil per day to India which is lower compared to export of 1.4 million barrels per day in the month of January, 2025. 

In contrast to this, the USA’s crude oil export to India accounts for an average of 0.2 million barrels of oil per day in the month of February. It indicates a higher export level to India compared to 0.11 million barrels per day in the month of February.

The possible reason for expansion in crude oil export by the USA in India is to balance out the losses caused due to sanctions on Russian crude oil, especially ESPO Blend type. 

The ships loaded with Russian oil and the USA crude oil are set to reach India in the month of March. The average time required for the USA ships to reach Indian ports is about 45 days. Russian ships take around 25 to 30 days to reach Indian ports.

 

Oil export’s share of other countries to India

The sanctions have not only led to expansion in oil exports of the USA to India but also export from Iraq and Saudi Arabia. The market share of Iraq oil export expanded to about 1.08 million barrels per day compared to earlier 0.8 million barrels per day. While, the market share of oil imports from Saudi Arabia surged to 0.91 million barrels per day in the period of 1st to 20th February, 2025 compared to 0.77 million barrels per day in the past. 

The average oil export from UAE to India was recorded to be 0.31 million barrels per day in the period of 1st to 20th February, 2025 against 0.48 million barrels per day in the last month.

The average exports from countries in the Middle East to India in the month of February is likely to be marginally lower compared to the average export recorded in the initial 20 days of the month of February, 2025. The reason for this is that exports from the Middle East are usually at low levels in the second half of every month against the export levels in the first half of each month. 

The crude oil loaded tankers from Middle East countries are set to reach in  the month of February only as it takes around 6 to 12 days to reach Indian ports.

 

Impact on Indian companies

The oil loaded on the USA and Russian ships are anticipated to reach India in the month of March. The sanctions imposed by the USA on Russia has led to market disruption in the oil trade between India and Russia. The Indian companies have a period up to 12th March to finalize their trade dealings with sanction-imposed Russian companies. After this, the Indian companies will face secondary sanctions in case of continuing trade with these companies. 

 

Current oil trades of India

In the present times, oil companies in India are purchasing more from the USA and Middle East. Indian oil companies are avoiding imports from  Russia as to not face the issue of blocked delivery due to imposed sanctions. In order to offset the trade imbalance between India and the USA, India is facing pressure from the Trump regime to expand its energy imports from the USA. 

Recently, the government of India announced plans to expand import of energy from the USA by around two-third level which accounts to 25 billion dollars in the upcoming terms. 

 

 

 

The image added is for representation purposes only

Burman family takes over Religare becoming its biggest stakeholder

 

 

 

 

, , 0 Comment
Read More
The FII turnaround: What’s behind the ₹3,000-crore inflows into Indian equities?
Equities, Markets - February 21, 2025

Burman family takes over Religare becoming its biggest stakeholder

Burman family takes over Religare becoming its biggest stakeholder

 

Overview

The Burman family, who own Dabur, has formally assumed control of Religare Enterprises Ltd (REL), a financial services company based in Delhi, as its new promoter following a contentious 18-month legal struggle. According to those with knowledge of the strategy, the Burmans are now anticipated to invest in the company and select a new management group in order to transform Religare into a competitive non-banking financial corporation (NBFC).

 

Fresh fund infusion

The primary operations of REL are retail brokerage (Religare brokerage), health insurance (Care Health Insurance), and loan (Religare Finvest).  Religare Finvest was taken out of the Central Fraud Registry database last year by State Bank of India, one of its lenders.

 

By purchasing preferential shares, the Burman family is likely going to contribute ₹2,000 crore, which was originally intended for the open offer, bringing their ownership interest to more than 50%. Further, the new promoters are also anticipated to carry out a rebranding effort, which might involve renaming the business and its subsidiaries in the upcoming months to conform to the Burmans’ strategic vision.

 

New Vision for REL

The company’s top priorities right now lie with stability, strengthened governance, and sustainable growth. Governance, integrity, and trust will continue to be important as REL moves toward a future characterized by resilience and stakeholder value maximization. Additionally, the Burman Group will collaborate with REL’s board and leadership to strengthen long-term value development and reaffirm the company’s strategic direction.

 

The Takeover Battle

After gaining a 25 percent interest in Religare, the Burmans made an open offer to purchase an additional 26 percent, sparking the start of the takeover struggle.  However, the offer was rejected by the senior management, which was led by Rashmi Saluja. They claimed that the firm was overvalued at Rs 235 per share. The former board also questioned if the Burmans satisfied the regulators’ “fit and proper” requirements in a letter to the authorities.  According to the Burman family, they successfully run insurance companies and an NBFC, so they satisfy all requirements.

 

Open Offer gets muted response

There was not much participation in the Burman family’s open offer; only 0.07% (2,31,025 shares) of the offered equity was tendered. But before the offer, the family already owned 21.10% of Religare Enterprises, and after the offer was over, that ownership grew to 25.16% (8,32,01,819 equity shares). Open market transactions on January 31, 2024, where they obtained roughly a 3.99% interest (1,32,00,000 equity shares), had already reinforced their position. M.B. Finmart Private Limited (MFPL), Puran Associates Private Limited (PAPL), VIC Enterprises Private Limited (VIC), and Milky Investment & Trading Company (MITC), all controlled by the Burman family, were used to make these acquisitions.

 

Religare’s recent performance

Religare Enterprises is a multifaceted financial services organization that operates in three different industries. Through its operating businesses and underlying subsidiaries, it provides a comprehensive range of financial services, such as retail broking, affordable home finance, health insurance, and loans to SMEs.

 

In comparison to the net profit of Rs 19.50 crore in Q3 of 2023, Religare Enterprises reported a net loss of Rs 43.08 crore in Q3 of 2024. In Q3 of 2024, total income reached Rs 1,670.24 crore, an 8.65% year-over-year increase.

 

Share Price Hike

While staying on a green course, Religare’s shares have fluctuated. The company’s shares surged by more than 8% in the early hours of Friday’s trading day. Since then, there have been ups and downs, with the gains falling to 2%.

 

The opening price of the stock was Rs 240.00, which was more than the closing price of Rs 223.01 per share the day before. The firm shares jumped, with the value increase standing at 4.79 percent, or Rs 10.69, after a series of ups and downs that seemed to be on the rise until lunchtime. As a result, each share of the corporation was worth Rs 233.70. Religare Enterprises’ stock ended the day at Rs 265.30, up 18.97% on the BSE.

 

Conclusion

The Burmans have successfully taken over Religare Enterprises thanks to these calculated acquisitions. Investor faith in the Burman family’s leadership is reflected in the share price spike. A lengthy disagreement between US-based investor Danny Gaekwad and outgoing chairperson Rashmi Saluja has come to an end with this takeover.

 

 

 

The image added is for representation purposes only

Adoption of high speed rails can aid in growth of India’s EV adoption rate like China

 

 

 

 

, , 0 Comment
Read More
MRF Q1 FY26: Revenue Up, Profits Down on Margin Pressures
Automobile News, Autos, Equities, Markets - February 21, 2025

Auto industry anticipates boost in demand by wedding season and recovery of infra projects

Indian automobile industry anticipates boost in demand by wedding season and recovery of infra projects

 

The Indian automobile industry is looking forward to the upcoming marriage season and also recovery of public infrastructure projects. The auto industry believes that it will lead to growth in sales of the vehicles, particularly affordable cars and two-wheelers. 

 

Challenges faced by Automobile industry

Following the festive season, the automakers in India faced issues in sales growth. It is also due to gradual removal of discounts. In recent times, the automakers are paying attention to two crucial factors which are overall demand trends and surge in price levels in the market. It will aid them in anticipating the future outlook of the auto industry and company as well. 

 

Higher rural demand

In terms of rural and urban demand, the demand for vehicles by rural region was higher in the range of 200 to 300 bps compared to the urban growth in the third quarter of FY25. This demand trend in rural areas highlights that people living in rural regions are showcasing higher interest in buying vehicles against the people living in urban regions. Despite strong growth from rural areas, the auto industry required a stronger boost in order to have complete revival of demand in the industry.

 

Factors contributing to revival of demand

As per the past trends, the auto industry recorded higher demand for vehicles in the wedding or festive season.  As the wedding season is coming up, many automakers anticipate that it will lead to higher demand for autos in the market as many purchase vehicles for personal use or as gifts. 

 

Apart from wedding and festive season, government incentives and infrastructure projects play a crucial role in strengthening the auto demand in the industry. In recent times, the auto industry believes that recovery in the infrastructure project by the government of India would lead to a boost to the auto sector. These plans will lead to faster infrastructure growth, expansion in income generation, mainly in rural regions. This will ultimately lead to strengthening of sales in the auto industry.

 

Additionally, other factors like interest rates and income tax cuts can also help in boosting demand for vehicles in the market. In case of contraction in interest rates, it will encourage people to take more loans for purposes like auto purchases as they have to repay less amount of loan. 

 

In the Budget 2025, the government of India announced income tax cuts up to Rs.12.75 lakhs of income. It led to expansion in disposable income of the people. It resulted in marginally easier for consumers to purchase new vehicles. 

 

International demand trend

In the third quarter of the financial year 2025, many automakers recorded robust strength demand in the international market which was higher than earlier estimates. In contrast to this, automobile component players recorded slowdown in demand trends in this third quarter. This current trend is anticipated to remain in the future quarters as well. 

 

In present times, the automobile industry in India is in a situation of uncertainty. The driving factors like contraction in interest rates, wedding season, and higher rural demand can lead to a boost to the revival of demand and sales in the auto industry in the upcoming terms.

 

 

 

The image added is for representation purposes only

Adoption of high speed rails can aid in growth of India’s EV adoption rate like China

 

 

 

 

, , 0 Comment
Read More
Adoption of high speed rails can aid in growth of India’s EV adoption rate like China
Equities, Markets - February 21, 2025

Adoption of high speed rails can aid in growth of India’s EV adoption rate like China

Adoption of high speed rails can aid in growth of India’s EV adoption rate like China

To enhance the electric vehicles penetration in India, it has to expand its high-speed rail networks like China. In the year 2008, China adopted EV high-speed trains. One of the reasons for the country’s successful EV adoption which stands at 48 percent. Adoption of high speed rails running on batteries will aid in reducing concern about running out of battery due to lack of charging infrastructure in the country. It will help in better travelling for people in terms of reliability and convenience. Additionally, it will promote a strong relation between growth of high-speed train network and EV market growth in the country.

 

China’s EV adoption

As per the latest study of 328 cities in China for the period of 2010 to 2023 indicates strong relation between EV and high-speed train networks. Currently, China has a remarkable success in terms of EV vehicles which accounts for 48 percent. This large share includes hybrid vehicles as well as its extensive high-speed trains. 

In the year 2008, China started its first EV train which currently covers 96 percent of the region with the capacity of 500,000 and more. In the year 2014, Tesla came and started to develop EV vehicles. The country successfully achieved 22 million EV cars running on its roadways by the year 2023. It is higher than the half of the international EV trends in the world. 

Though, EV penetration was not at the same level in all parts of China. The cities connecting to the high-speed rail network recorded higher adoption of EV vehicles than other regions. It resulted in expanding the EV market by about 1.22 percentage points and sales volumes by 91.39 percent. 

India’s EV adoption

In India, the auto market recorded lower than 3 percent of EV cars sold in the previous financial year. The reason for this is the lack of availability of charging infrastructure in the country which accounts to 25,000 leading to discouraging consumers to buy electric vehicles. Even the auto manufacturers faced the issue of insufficient incentives to build extensive charging stations networks like China which account for around 3 million charging stations. In India, EV car owners charged their cars at home. It seems fine but it is good in terms of driving in the city only. When it comes to driving long distances, there is always anxiety among consumers about running out of battery. 

Railway Infrastructure in India

India largely considers highways as its prominent transport infrastructure. The country has had railways since British rule and today its infrastructure and development suffers from underinvestment. The express service via railways in India only accounts to average speed of 32 miles per hour in the period of April to November 2023. The speed of regular trains in India is about 22 miles. Compared to this, the speed of railways in China is 10 times faster. Further, it plans to accelerate to more than 31,000 miles in the current year. 

India plans to launch its first bullet train connecting Mumbai and Ahmedabad which is still in work-in-progress phase. It is projected to be completed by the year 2026. 

 

In recent times, there is a possibility of India contracting its import duties on auto due to the rising pressure of tariffs from the USA. Additionally, Tesla is planning to launch some cars in India in the near term. It will lead to higher competition in the EV market in India. In present times, the EV market is strongly dominated by companies like Tata motors and JSW MG Motors which account for 58 percent and 25 percent of EV market share, respectively. 

Apart from Tesla, companies like BYD and Suzuki are also planning to expand EV models in India. It is projected to lead to growth of the EV market in India to the level of the European or American EV market which is in the range of 10 to 25 percent. Though, there is a long way for India to reach at the level of China’s EV market which is currently positioned at 45 percent. 

In conclusion, EV high-speed rails can act as a great push for higher adoption of EV in India along with the prevailing tax rebates and subsidies in the country. 

 

The image added is for representation purposes only

GDP likely grew by a median 6.3% in Q3, slightly higher than RBI’s 6.2% estimate

 

 

 

 

, , 0 Comment
Read More