📰India’s Stock Market Loses Favor Abroad | Daily India Briefing

India’s stock market loses favor from abroad. New Delhi looks to patch up its relationship with Beijing as relations with Washington collapse. India is looking to let private firms mine uranium, a seismic shift in nuclear energy policy.

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Macro

• India’s public sector banks have matched private lenders’ stock performance for the first time in four years, aided by stronger retail lending in areas like home and small business loans, Bernstein said, challenging assumptions of private bank dominance.

• The Indian rupee logged its biggest gain in over a month, rising 0.31 percent to 87.44 per dollar, as softer U.S. inflation data boosted expectations of a September Fed rate cut. Dollar weakness lifted emerging market currencies and improved investor risk appetite.

Equities

• Blackstone-owned Horizon Industrial Parks is weighing a $500 million (₹43.7 billion) IPO in Mumbai next year at a possible $4 billion (₹349.6 billion) valuation. Talks with banks are underway, but size and timing remain tentative as discussions are still at an early stage.

• ONGC’s quarterly profit fell 10 percent as crude prices dropped and production from aging fields stagnated, with oil output up just 1 percent and gas flat, prompting plans to boost recovery and diversify into new energy.

• Paytm shares jumped up to 6 percent to their highest since January 2022 after its unit won RBI approval to operate as an online payment aggregator, lifting a 2022 ban on onboarding new merchants and opening a potential new revenue stream.

• Maruti Suzuki will launch a new mid-sized SUV on Sept. 3 from its Kharkhoda plant, aiming for 10,000 units a month and doubling segment sales as it shifts focus from declining small-car demand to capitalize on India’s growing SUV market.

• Fractal Analytics, India’s first AI unicorn, has filed for a Mumbai IPO seeking up to $560 million (₹48.9 billion), potentially valuing it above $3.5 billion (₹305.9 billion). The listing aims to tap strong investor demand for AI and India’s rapid tech adoption.

• United Spirits’ Q2 profit fell 14 percent year-on-year, missing analyst estimates of $34.7 billion (₹3.03 billion), as higher marketing spending offset strong demand for premium liquor from affluent consumers.

• Infosys will acquire a 75 percent stake in Versent Group, an Australian cloud services unit of Telstra, for $153 million (₹13.4 billion) to strengthen its local presence. The deal is expected to close in H2 FY26 pending regulatory approvals.

• BPCL’s quarterly profit doubled to $700 million (₹61.24 billion), beating estimates on lower costs and stronger fuel demand. Revenue rose 1.2 percent, while expenses fell 2 percent, driven by an 8.8 percent drop in material costs.

Alts

• ​​Alvarez & Marsal has hired ex-Apollo Global Management MD Arpito Mukerji to lead its new India private credit advisory unit, which will target real estate, metals and mining, healthcare, and industrials. The team aims to grow to about 20 professionals.

Policy

• Modi is leveraging tensions with Trump’s new 50 percent tariffs to rally farmer support before Bihar’s election, vowing to block U.S. access to India’s agriculture sector, a stance analysts say may falter if economic pain deepens.

• Indian PM Narendra Modi may meet U.S. President Donald Trump during his likely visit to the UN General Assembly in New York next month, with trade and tariff disputes expected to be a key discussion topic.

• An RBI committee has proposed an AI development framework for India’s financial sector, recommending indigenous model-building infrastructure, a multi-stakeholder risk-review committee, and a dedicated fund to foster homegrown AI while balancing innovation with risk mitigation.

• SEBI has proposed adding algorithmic and proprietary trading explicitly into its stockbroker regulations, replacing the current reliance on ad hoc guidelines. The move follows last month’s temporary ban on Jane Street and seeks formal oversight of high-profit, algo-driven trading activity.

• India’s Atomic Energy Regulatory Board and the U.S. Nuclear Regulatory Commission held a bilateral meeting in Maryland from Aug. 6–8 to deepen cooperation on nuclear safety and regulation. The talks covered advanced reactor regulation, codes, and standards as India targets expanding capacity to 100 GW by 2047.

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1. India’s Stock Market Loses Favor Abroad, But Retail Keeps Buying the Dip

India has gone from the most-loved to the least-loved Asian market among global fund managers in just three months, according to Bank of America’s latest survey. Thirty percent of respondents are now underweight India, a sharp reversal from May when it topped the list. Trump’s 50 percent tariffs on Indian goods, retaliation for Delhi’s Russian oil purchases, have weighed on sentiment, alongside weak earnings and stretched valuations.

But while foreign investors pulled $4 billion (₹349.6 billion) from Indian equities this quarter, domestic retail hasn’t flinched. Mutual funds focused on stocks, which get the bulk of flows from individual investors, brought in a record $4.9 billion (₹427 billion) net in July. That’s not just passive inflows; trading app activity has spiked, with expiry-day index options volumes still dominated by retail punters chasing small premium swings.

Part of this is habit. Over the past few years, Indian retail has been conditioned to “buy the dip” on every foreign selloff, backed by rising incomes and SIP (systematic investment plan) discipline. Another part is conviction; many still see India’s long-term growth story as intact, tariffs or not.

The risk is that global selling meets an eventual slowdown in retail inflows, especially if tariffs start to bite corporate earnings. For now, though, the message from the street-level trader is clear: foreigners may be bailing, but desi capital is still at the table.

2. Modi Turns to Beijing as Trump Tariffs Continue to Apply Pressure

With Trump’s 50 percent tariffs tearing into Indian exports and relations with Washington souring fast, New Delhi is moving to patch up its fraught economic relationship with Beijing. Modi is expected to announce the resumption of direct flights to China, frozen since COVID and the deadly 2020 border clash, when he visits Tianjin later this month to meet Xi Jinping at the SCO summit.

The thaw comes with early signs of pragmatic trade rebuilding. China has eased urea export curbs to India, potentially lowering fertilizer costs, and the Adani Group is exploring a tie-up with BYD for EV battery manufacturing. The reopening of tourist visas for Chinese nationals adds to the normalization push.

Strategically, both sides see an opportunity. China shares India’s distaste for Trump’s tariff brinkmanship, with Beijing’s envoy publicly backing New Delhi’s defiance. For India, diversifying supply chains toward China could cushion the blow from lost US market access and provide critical inputs for manufacturing.

Still, trust remains thin. Beijing’s military aid to Pakistan earlier this year underlines the structural rivalry. But with the US now a hostile trade partner, Modi’s message is clear: India won’t be cornered, and will court partners wherever leverage can be found, even across a contested Himalayan border.

3. India to End State Monopoly on Uranium in Nuclear Push

Modi’s government is preparing to let private firms mine, import, and process uranium, a seismic policy shift ending decades of state monopoly and aimed at attracting billions in investment to fuel a 12x expansion in nuclear power capacity by 2047.

Currently, the state controls every step of uranium handling, citing security and safety. Under the new plan, it will retain control of spent fuel reprocessing and plutonium waste, but open upstream and midstream uranium activities to domestic private players, and allow foreign investors minority stakes in nuclear plants.

India’s domestic reserves, 76,000 tonnes, enough for ~30 years at current capacity, will meet only about 25 percent of the fuel needed for the planned buildout, forcing heavy reliance on imports and expanded processing. The policy will also greenlight private supply of control systems for plants.

Unlocking the sector will require amending five major laws, from mining and electricity to FDI rules. Several large conglomerates are already drafting entry plans, but analysts warn that execution speed is critical to meet demand growth.

The move mirrors uranium market liberalization in countries like Canada and the US, positioning India to secure long-term supply in an era of volatile global energy geopolitics, and offering a new high-barrier, high-reward frontier for Indian corporates.

See you tomorrow.

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

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