📰Explained: The Hermès of India?

Good afternoon, 

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

• Sabyasachi Mukherjee, India’s leading luxury designer, is setting his sights on transforming his brand into a global powerhouse,

• The State Bank of India is expanding solutions to AI, e-commerce, and fintech,

• and we take a 10,000-foot view of India to discuss the fastest-growing industries broadly.

Then, we close with Gupshup, a round-up of the most important headlines.

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—Shreyas, [email protected]

Market Update.

The Hermès of India.

Sabyasachi Mukherjee, India’s leading luxury designer, is setting his sights on transforming his brand into a global powerhouse that could one day rival Hermès and Chanel. Having built his empire around India's love for extravagant weddings, Mukherjee is now looking beyond bridal couture and expanding into fine jewelry, bags, eyewear, perfumes, beauty products, and eventually, designer homes and hotels. His strategy aligns with India’s rising affluence, growing nationalism, and evolving consumer mindset that increasingly values homegrown luxury brands over Western labels.

India’s luxury market, while still relatively small compared to China, is experiencing rapid growth. The country is home to the fastest-growing ultra-high-net-worth population, attracting an influx of global luxury brands. Since 2020, 60 international brands have entered India, with 27 arriving in the last year alone. Despite this expansion, the Indian luxury market remains only about one-seventh the size of China’s, partly due to low per capita luxury spending, which stands at just $50 (₹4,360) compared to China’s $380 (₹33,000). Luxury purchases in India were once dominated by old money or untaxed income. Still, today, the market is expanding to include self-made, tax-paying consumers who are more confident in their national identity and consumption choices.  

Currently generating an estimated $60 million (₹5.2 billion) in annual revenue, the House of Sabyasachi remains small compared to the likes of Chanel and Hermès, which are nearly 300 times larger. However, Mukherjee understands that luxury brands take time to build and are focused on long-term growth rather than short-term profitability. His 2021 decision to sell a 51 percent stake in his company to billionaire Birla’s retail business was a strategic move to scale his operations while maintaining creative control. Although Ambani’s retail empire also sought to acquire a stake, Mukherjee chose Birla, citing a long-standing relationship and a preference for a quieter business partner who operates behind the scenes.  

Mukherjee is confident in his vision. He has gained valuable insights through collaborations with global names like Christian Louboutin, Estée Lauder, H&M, and Bergdorf Goodman, where his jewelry line is now sold. Unlike fast-moving consumer goods, he sees luxury as an industry that thrives on exclusivity and brand mystique. He emphasizes that his focus is on creating a legacy rather than chasing rapid expansion.  By tapping into India’s rich heritage, rising wealth, and changing consumer preferences, Mukherjee is betting that his brand can become the first truly global luxury house from India.

SBI is Expanding Fintech Solutions.

State Bank of India (SBI), the country’s largest lender, is expanding its project financing capabilities to cater to high-growth sectors such as artificial intelligence, e-commerce, and fintech. The bank is establishing a dedicated unit, named the Center of Excellence for Project Financing, to manage project financing solutions according to Ashwini Kumar Tewari, a managing director at SBI. The initiative is expected to be completed within a year and will involve hiring specialized professionals, alongside the appointment of an external consultant to guide the process.  

Traditionally focused on funding large infrastructure projects, SBI’s project finance and structuring unit is diversifying its portfolio to include industries poised for rapid expansion. With India undergoing a significant infrastructure overhaul under Modi’s administration, the bank is aligning itself with emerging opportunities in technology-driven sectors and renewable energy. According to SBI’s annual report, the bank financed 48 large projects through this unit in the 2024 fiscal year, highlighting its crucial role in India's development.  

Beyond financing, the Center of Excellence for Project Financing will also serve as a knowledge hub, sharing insights with other financial institutions. By broadening its focus to include industries driving India's digital transformation, SBI is positioning itself as a key player in shaping the country's economic future while capitalizing on new investment opportunities.

10,000 Foot View: What’s Growing?

Several industries are shaping modern India’s economic transformation, each presenting distinct investment opportunities. The Global Capability Centers sector is expected to double in market value to $110 billion (₹9.6 trillion) by 2030, with companies like JPM and BlackRock investing heavily. India’s highly skilled workforce is turning former back-office functions into innovation hubs, with companies such as Verizon leveraging their India-based teams to drive AI and 5G developments.  

The Aerospace and Defense industry is another sector experiencing steady growth, projected at 6.8 percent annually until 2030. India’s deepening ties with the US and a growing talent gap in Western defense industries have positioned Indian firms as key players in global supply chains. Hyderabad-based JEH Aerospace, founded just two years ago, has already secured over $100 million (₹8.7 billion) in orders, supporting the likes of General Electric’s aero engines.  

India’s consumer goods market is also transforming, with spending growth of 300 percent over the past decade. Rising incomes and urbanization are driving demand for branded products. Eyewear retailer Lenskart, for example, has expanded aggressively, now operating in nearly 20 countries with over 2,500 stores, of which 2,000 are in India. Investors see this as one of the biggest opportunities in India’s growing retail sector, with IPOs offering a potential entry point.  

The digital economy is projected to account for 20 percent of India’s GDP by 2026, with fintech firms and cybersecurity companies playing a pivotal role. Mumbai-based IDfy, for instance, started as a background verification company and evolved into a key player in regulatory compliance and fraud prevention for financial institutions. India ranks third in total fintech and unicorn companies, with banking-focused fintech firms projected to capture over 20 percent of banking revenue by 2030, far exceeding the global average.  

Infrastructure remains a critical area for investment, particularly in renewable energy, where green investments are expected to surge 500 percent by 2030. Companies like Greenko Group are leading the charge in decarbonization, growing from a 21 MW biomass plant to nearly 10,000 MW of renewable energy projects across 15 Indian states. The government has introduced investment instruments such as InvITs, allowing institutional and individual investors to participate in revenue-generating infrastructure projects.

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Gupshup.

Macro

• Indian FX reserves hit the biggest weekly gain since 2021 by $15.3 billion (₹1.3 trillion). The total reserves are now at $654 billion (₹57 trillion) which comes after the few billion dollars of forex swaps. Keep in mind that the swaps add to FX reserves in the short term but are essentially liabilities where the dollars will leave in a few months when the swaps mature.   

• Indian refiners have turned to Latam and African to replace Russian oil. Russian exports to India fell by 3 percent to 1.54 million barrels per day; African imports rose by 200,000 barrels per day and Latam ones grew by 60 percent to 453,000. India for the first time got Gabonese and Argentinian oil.  

Equities

• India is going to deliver a US summons to Adani for bribery. The summons would require Adani or his legal counsel to appear in the US for court proceedings. Adani has maintained his views that the trial is baseless. There most likely will not be any extradition or arrest back to the US.

Alts

• Apollo Hospitals is investing in AI tools to reduce work hours. Apollo has set aside 3.5 percent of all digital spending on AI investing to grow online tools. The goal is to have computers recommend diagnoses, medicines, tests, and treatment. AI should also be able to expedite nurse and doctor note-taking. Apollo wants to roll technology out across their nationwide 10,000 beds and online medical services as well.  

• Jio Finance is testing commercial paper issuance before a debut bond sale. The commercial paper was issued at 7.8 percent with bids of $115 million (₹10 billion). The bond issue will likely be at 7.75 percent for $345 million (₹30 billion) on five-year bonds.

Policy

• RBI Governor Malhotra urges NBFCs to set up a common pool of climate-related bankable projects. The common pool would allow regulated entities to vet climate projects before investing allowing for faster growth. The RBI has started taking a more active hand in climate discussion, publishing a paper estimating a $86 billion (₹1 trillion) spend in adapting industries to be more climate-ready.

• India's telecom ministry will only allow satellite permits for five years, defying Musk's desire for 20. The TRAI wants to limit the contract length initially until figuring out how the industry is going to develop. Domestic leaders like Jio and Airtel have agreed with the TRAI regulation, given that they will still have an active hand in development. 

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.