📰Citadel Eyeing India Expansion | Daily India Briefing

Today’s deep dives: Citadel Securities is ramping up its presence in India. The White House claims that India has begun sharply reducing its imports of Russian crude. India’s securities watchdog plans to strengthen its oversight of algorithmic and high-frequency trading.

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Macro

• India is planning to boost liquefied petroleum gas (LPG) imports from the U.S. as part of a prospective trade deal, shifting dependence away from Middle Eastern suppliers to support diplomacy and energy security goals.

• Markets are rallying as IT stocks gain on expectations of improving global demand, aided by a rupee recovery and better-than-expected quarterly results across key sectors fueling optimism.

Equities

• Infosys raised its full-year revenue growth forecast to 2–3 percent on expectations of renewed IT spending and AI-driven demand. The firm’s quarterly profit rose 13 percent, boosting confidence despite global uncertainties and new US visa restrictions.

• Reports show LG India’s bankers were paid more than those managing Tata’s larger IPO, sparking debates over fairness, fee structures, and preferential treatment in big-ticket listings.

• LTI Mindtree delivered stronger-than-expected revenue in its Q2, driven by healthy demand across digital and cloud services, reinforcing hopes for momentum in India’s tech outsourcing sector.

Alts

• Quick-commerce startup Zepto raised fresh capital at a $7 billion (₹616 billion) valuation, underscoring investor confidence in India’s e-commerce and last-mile delivery boom despite global headwinds and increasing competition.

Policy

• The RBI intervened heavily in the foreign exchange market, selling dollars to squeeze rupee short-sellers and reassert control over sudden currency volatility, catching speculators off guard.

• India’s tax authorities conducted raids on proprietary trading firm Graviton amid investigations, signaling stronger regulatory scrutiny of algorithmic trading, accounting practices, and opaque financial flows.

• India’s markets regulator accused participants in energy derivatives of insider trading on an energy options exchange, promising tougher enforcement and market integrity measures amid rising scrutiny.

• India’s markets regulator is pushing reforms to attract institutional investors into commodity trading, aiming to deepen liquidity, enhance price discovery, and broaden participation beyond retail-focused trading.

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1. Citadel Eyeing India Expansion

Citadel Securities is ramping up its presence in India, with plans to expand cash equities operations and enter the country’s commodity markets as part of a broader push to tap one of the fastest-growing economies globally.

The Miami-based market maker, which executes about $652 billion (₹57.4 trillion) in trades daily across 50 markets, views India as a key growth driver over the next decade, said Gustaf Ericson, Citadel’s chief operating officer for India, at Bloomberg’s Investment Management Forum in Mumbai. “If I look at where growth is coming in India in the next two-three years, first is deepening cash market liquidity,” Ericson said. “Two is something like commodities, where growth is tremendous.”

The company’s onshore business remains unaffected by India’s market regulator’s ongoing probe into rival Jane Street Group. Citadel has recently expanded its India team and taken a minority stake in the National Commodity & Derivatives Exchange, alongside Tower Research Capital — marking a rare investment by a global market maker in Indian infrastructure.

Citadel’s move aligns with the SEBI efforts to attract more offshore liquidity providers via hubs like GIFT City. Other global firms such as Optiver, Jump Trading, and IMC have also deepened their India footprint, underscoring the country’s emergence as a pivotal market in global trading and capital flows.

2. India Cutting Russian Oil? Or is it a Hoax?

The White House claims that India has begun sharply reducing its imports of Russian crude — down by roughly 50 percent — after self-proclaimed “productive” trade discussions with New Delhi, a senior US official told Reuters on Thursday.

The move comes amid high-stakes negotiations to finalize a trade pact between the two countries, which had been strained since Trump imposed a 50 percent tariff on Indian goods in retaliation for its Russian oil purchases. Washington has tied tariff relief to India’s willingness to curb discounted Russian crude flows, part of Trump’s broader effort to squeeze Moscow’s wartime revenues.

However, confusion followed Trump’s statement that Prime Minister Narendra Modi personally pledged to halt Russian oil imports. India’s foreign ministry said it was “not aware of any such conversation” between the leaders and reiterated that consumer interests remain central to its energy policy.

Indian refiners privately said they had not received new government directives but expect a near-term decline in Russian shipments. Moscow, for its part, expressed confidence India would continue buying, calling the trade “economically viable.”

The developments mark a potential turning point in India-US economic relations as negotiators push to finalize a trade deal by November. Yet they also highlight the geopolitical tightrope New Delhi faces, balancing access to cheap Russian energy with the need to preserve deepening ties with Washington.

3. India Wants Foreigners to Expand the Corporate Bond Market

India’s securities watchdog plans to strengthen its oversight of algorithmic and high-frequency trading to promote fair competition and protect smaller investors, SEBI Chairman Tuhin Kanta Pandey said Thursday.

“The technology is evolving very fast. We have to march with technology, but with due guardrails,” Pandey said at Bloomberg’s Investment Management Forum in Mumbai.

The announcement comes amid heightened scrutiny following SEBI’s allegations that U.S.-based Jane Street Group manipulated Indian equity and derivatives markets. The firm denied wrongdoing, calling its trades basic index arbitrage. “We consider it manipulation, somebody else could consider it arbitrage,” Pandey said.

The case has intensified debate about India’s fast-growing high-frequency trading sector, which now accounts for roughly 60 percent of equity-derivatives volume. Global market makers including Citadel Securities, Optiver, IMC Trading, and Jane Street have expanded aggressively to capture India’s $5.2 trillion stock market boom.

Pandey said SEBI will issue a consultation paper on new HFT rules once internal deliberations are complete, signaling potential changes to how algos are registered and monitored. He also noted that some recent measures are already curbing speculative activity, the number of individual options traders fell by about 20 percent between December and May.

The regulator is also weighing reforms to India’s derivatives market — the world’s largest by contracts — including a shift from weekly to longer-tenor products to boost cash-market depth and reduce retail risk.

See you tomorrow.

Written by Eshaan Chanda & Yash Tibrewal. Edited by Shreyas Sinha.

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