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

• India welcomes new LNG shipments,

• India has twenty new cities in the pipeline,

• and, Foreign investors are shorting India.

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

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—Shreyas, [email protected]

Market Update

The Nifty50 and Sensex slipped by 70 basis points after Tata Consulting Services — the first major company to report earnings — slightly underperformed, with investors fearing more bad news coming soon.

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India Welcomes New LNG Shipments

India’s newest liquefied natural gas (LNG) terminal, owned by Hindustan Petroleum Corp. Ltd. (HPCL), has received its inaugural shipment, signaling progress toward New Delhi’s goal of increasing natural gas's share in the energy mix to 15 percent by 2030. The terminal in Gujarat is the country’s eighth LNG facility.

Challenges in Adoption. Currently, it makes up 6 percent of the energy mix but LNG facilities are being built to boost that figure to 2030 goals. LNG imports in 2024 reached their highest levels since 2020, underscoring increasing demand despite periodic price volatility that has deterred some buyers. While the new terminal expands import capacity, affordability remains a critical issue. Price spikes in the global LNG market can render the fuel too costly for Indian consumers, potentially slowing adoption rates. Additionally, New Delhi must balance infrastructure expansion with policies that ensure price stability and broader access to natural gas.

India Has Twenty New Cities in the Pipeline

India’s ambitious initiative to develop 20 new industrial cities has already attracted $20 billion (₹1.7 trillion) in investment commitments and is projected to create 80,000 jobs, despite most cities still being in the planning phase. Among them, the Shendra-Bidkin Industrial Area in Maharashtra stands out, with over 80 percent of its industrial land allocated and factories, such as Toyota-Kirloskar’s EV plant, under construction.

The program, launched in 2016 with four cities, has since grown to 20 under the National Industrial Corridor Development Corporation (NICDC). These cities are designed to bridge regional economic disparities, targeting areas with industrial gaps, abundant skills, and significant hinterland populations.

But... many cities start with as little as 2,000 acres due to India’s complex land acquisition processes. Large projects like this face delays from coordination among multiple agencies. Also, only four of the twenty cities are near ports, meaning the city’s growth cannot depend on trade. Freight corridors aim to mitigate this, but infrastructure like expressways and airports lags. Additionally, these cities lack plans for residential and commercial development thus far.

Foreign Investors Are Shorting India

Just when most thought foreign investors could not become more bearish, overseas funds added 19,000 short positions on Indian index futures on Wednesday, bringing total net shorts to 238,000 contracts — the highest in seven months.

Investors are positioning themselves defensively as earnings season is set to kick off. The last time investors were this short was after the BJP underperformed in the Lok Sabha right as earnings came out. But India’s market — thankfully — is volatile: the market improved to all-time highs by September even with a bearish sentiment among many.

Gupshup

Macro

• Bearish rupee bets have pushed forward hedging costs to their highest since 2022. Forwards are favored by funds and corporations for guaranteed exchange rates back into dollars. Forward points, reflecting the premium over spot rates, hit a November 2022 peak amid rising hedging demand driven by expectations of reduced RBI intervention and bullish dollar sentiment. 

• The RBI accepted 77 percent of January government security buyback bids as banks, facing liquidity deficits, aggressively sought return-generating instruments to bolster reserves. The auctions drew $5.5 billion (₹472.5 billion) in bids for just $3 billion (₹257.7 billion) of securities. The RBI attributed the limited allotment to government concerns.

Equities

• Kotak Mahindra anticipates a stronger IPO market in 2025 than in 2024. A leading IPO promoter, the bank expects market valuations to remain manageable, with foreign and domestic investors drawn by strong growth prospects. Following Swiggy’s $1.3 billion (₹111.7 billion) share sale, Kotak predicts new-age tech will drive 2025’s IPO surge.

• Tata Consultancy Services reported a 12% rise in net income to $1.4 billion (₹123.8 billion), falling $23 million (₹2 billion) short of analyst expectations. While this quarter is typically weaker for software outsourcers, overseas clients remain slightly cautious about investing in info-tech.

• Vodafone raised $222 million (₹19.1 billion) in preferred share allotments to Omega Telecom and Usha Martin.The unprofitable wireless operator is attempting to turn around key businesses amid losing share to Airtel and Jio which have been faster at rolling out 5G networks.

Alts

• Adani Group has raised $833 million (₹71.5 billion) by selling its stake in Wilmar, a joint venture focused on consumer goods. The spinoff is aimed at enabling the conglomerate to concentrate on its core businesses. Proceeds from the transaction will help Adani reinvest in infrastructure, as ongoing corruption cases in the U.S. continue to limit its ability to secure fresh capital.

• Two private credit funds, Neo and Avendus, are seeking $1 billion (₹85.9 billion) to start off 2025. Neo is looking to raise $699 million (₹60 billion) for its second private credit fund while Avendus PE is launching a third fund for $300 million (₹26 billion). Private credit has been growing due to the focus on infrastructure projects from the central government.  

• Neo and Avendus are targeting $1 billion (₹85.9 billion) in early 2025, with Neo raising $699 million (₹60 billion) for its second private credit fund and Avendus $300 million (₹26 billion) for its third. The sector's growth is driven by the central government's infrastructure push.

Policy

• The Taliban called India a "significant regional partner" after their meeting. Foreign Secretary Vikram Misri met with the Taliban representatives in Dubai. India has been one of the few countries extending some trade and aid to the Afghan region since the Taliban took over.

• India's government has announced a preliminary mining agreement with Mongolia focused on geology and exploration. Mongolia, rich in copper and coking coal—key resources for India's electricity and steel industries—has drawn interest from companies like Adani, Hindalco, and Vedanta. The memorandum raises hopes for a finalized deal in the near future.

See you Friday.

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.