Welcome to Samosa Capital’s daily briefing — the best way to stay up-to-date on India’s financial markets. Here’s what’s in today’s newsletter:

• India’s trade deficit slightly narrows,

• Jio is raising more debt,

• and, Meta Platforms may need to pause or shutdown features in India because of an antitrust dispute.

• Finally, we’ll close with Gupshup, a round-up of the most important headlines.

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—Shreyas, [email protected]

Market Update

Overall, markets shifted upwards after a massive Monday selloff, closing up 0.53 percent.

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Trade Deficit Narrows

India’s trade deficit for December narrowed to $21.94 billion, significantly below economists’ forecast of $25.6 billion, according to data released by the trade ministry. 

Why you should care: With a smaller trade deficit, there is less downward pressure on the rupee, and the Reserve Bank of India does not need to use as much of its foreign exchange reserves to defend the currency. With dwindling reserves, this gives the RBI increased flexibility to protect the rupee from further weakening.

Here are some drivers:

• Exports: Down 1 percent y-o-y to $38 billion in December, reflecting subdued global demand. However, this is a bit unusual given India’s weakening rupee, making its products relatively cheaper to the world.

• Imports: Increased 4.9 percent to $59.95 billion, driven in part by rising energy prices.

• Gold Imports: Fell to $4.7 billion in December, a sharp decline from the revised $9.4 billion in November, as lower custom duties boosted domestic gold purchasing earlier in the year.

Keep in mind: The recent revelation of miscalculations in precious metals import data has cast doubt on India’s trade statistics; revised November figures show a trade deficit of $31.83 billion.

Jio is Raising New Debt

Jio Finance Ltd., a shadow lender owned by Mukesh Ambani, Asia's richest businessman, is in discussions with multiple lenders to make its debut in the local currency debt market. The company aims to issue either bonds or loans as early as the January-March quarter, typically a peak season for credit demand in India, according to insiders familiar with the matter. Jio Finance offers mortgages, loans against property, insurance, and corporate lending. 

Excellent ratings: Crisil Ratings has assigned its debt facilities an AAA grade with a stable outlook, a rating higher than most non-banking financial companies (NBFCs) in India.

The move comes amid tighter Reserve Bank of India (RBI) regulations, which have made it increasingly difficult for shadow lenders to secure local currency loans from banks. These constraints have led to a surge in offshore debt issuance by Indian shadow lenders over the past year. Despite this trend, Jio Finance is prioritizing the local debt market for its debut due to its higher credit rating which should lead to better financing terms. 

Bad News, WhatsApp’ers.

Meta is fighting India's antitrust ruling that bans WhatsApp from sharing user data with Meta for advertising. The company warns it may need to pause or roll back features in India, where it has over 350 million Facebook users and 500 million WhatsApp users.

What happened: The Competition Commission of India imposed a $24.5 million fine and a five-year ban on Meta's data-sharing practices, claiming the company coerced users into accepting its 2021 privacy policy. Meta argues this ban could hurt its ability to use data collected by WhatsApp to offer personalized ads across Facebook and Instagram, impacting its commercial viability.

The case adds to Meta's global regulatory challenges and will be heard by an Indian appeals tribunal. Meta criticizes the CCI's technical expertise, arguing the watchdog should have consulted with the company before issuing directives to change its behavior.

BTW: India is Meta’s top country by users, with 378.05 million people who log-in daily. The United States is a far second, with 193.8 million users.

Gupshup

Macro

• The Reserve Bank of India announced it will hold daily variable rate repo auctions to address liquidity shortages in the banking system. As of Jan. 14, liquidity was in deficit by 2.09 trillion rupees, with the first auction scheduled for Jan. 16 to inject 500 billion rupees.

Equities

• CEAT Ltd, a Mumbai-based tire manufacturer, reported a sharper-than-expected 46.5 percent drop in Q3 profit as surging rubber costs offset revenue growth driven by strong replacement tire demand. Net profit fell to 971.1 million rupees, missing analysts' estimates of 1.33 billion rupees, while revenue rose 11.4 percent to 33 billion rupees.

• HDFC Life Insurance, operated by India’s largest private sector bank, reported a 14 percent rise in Q3 profit to 4.15 billion rupees, driven by strong retail insurance policy sales and a 10 percent increase in net premium income. The company's value of new business grew 14 percent year-on-year, though margins were slightly impacted by a higher share of unit-linked insurance plans.

• Aditya Birla Fashion and Retail plans to raise $500 million through share sales, including $275 million via preference shares to controlling shareholders and Fidelity, and $225 million through institutional placement. The Birla family’s stake will rise to 52.78%, while Fidelity will acquire a 3.45% stake.

• L&T Technology Services reported weaker-than-expected Q3 revenue due to reduced spending by automotive clients, with revenue rising 9.6% year-on-year to 26.53 billion rupees, missing analyst estimates. Net profit fell 4.1% to 3.22 billion rupees, weighed down by higher administrative costs.

Alts

• India is expediting payments for Russian crude ahead of new U.S. sanctions set to take effect next month, aiming to settle trades within two days instead of five. With Russian oil accounting for a third of India’s imports, refiners are leveraging the wind-down period to secure discounted supplies while shifting payments to rubles to bypass price cap restrictions.

Policy

• India’s Defense Minister Rajnath Singh highlighted growing geopolitical competition in the Indian Ocean, emphasizing the importance of a strong naval presence to safeguard vital trade routes. Without naming specific nations, Singh underscored India’s focus on countering regional security challenges, including China’s expanding influence and naval capabilities.

See you Thursday.

Written by Yash Tibrewal. Edited by Shreyas Sinha.

Disclaimer: This is not financial advice or recommendation for any investment. The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.