📰IPO Galore | Daily India Briefing

SEBI is fast-tracking IPO approvals. The RBI has been shifting away from U.S. treasuries. India accelerates development of rare-earth-free EVs.

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Macro

• Consumption tax cut has been an economic boost, except for durable goods. Goods like fans and ACs saw limited growth due to a milder than expected summer so festive demand/upgrades will likely be from leftover stock. Domestic stock was up to 2 million compared to an expected 1.2 million.

Equities

• Indian auto stocks have added $33 billion (₹2.9 trillion) based on Modi's tax cuts. August 15th is when the government lowered GST to bolster economic growth, which has led to the top 20 auto stocks adding immense value. GST was cut from 31 to 18 percent on most cars. 

• State-owned refiners are seeking to restore Russian oil flows, but a lack of cargoes is holding them back.Refiners are getting less quotes and more barrels are being allocated to China after US levies on India. Since Trump cracked down on the country, the 4 biggest refiners (Indian Oil Corp, Bharat Petroleum, Hindustan Petroleum, and Mangalore Refinery) dropped imports from 1.9 million barrels per day to 1.3 million.

Alts

• Jefferies new quant model sees investing opportunity in SMID-caps. Small and medium sized companies have had larger earnings per share growth than regional and global emerging markets. Return dispersion (gap between best and worst performing stocks) has shrunk for large caps, signalling limited alpha left. 

• India is expected to see 40 percent annual growth in lithium batteries over the next five years. There are larger production incentive plans with large-scale gigafactory rollouts too. EVs and battery energy storage will lead to domestic cell demand becoming 160 GWh by 2030. 

• Trafigura says Indian urbanization and rising income will make Indian oil demand outpace China.China has grown in consumption, but most has been in stockpiles rather than usage.

Policy

• Jane Street is appealing against SEBI, saying that the regulator withheld defense documents. The Securities Appellate Tribunal asked SEBI to respond within three weeks to Jane Street, but a lawyer for SEBI says that the regulator is within bound. The case is going to proceed November 18.

• New Delhi hasn't commented since Trump's positive comments on Modi and strong US-India ties. Trump softened his tone at the end of last week during a White House speech, leading to Modi responding on X. Since then, there have been no new comments as India continues to navigate the 50 percent tariffs. Indian officials are waiting for more reassurement on improving ties before speaking on tariffs. 

• Israel and India's finance ministers signed an agreement to boost bilateral investment. Israel is now the first member of the OECD to sign such an agreement with India. India exports $1.6 billion (₹140.8 billion) while importing $3.1 billion (₹272.8 billion) worth of goods. There are also some defense ties already, with Adani’s stake in Haifa Port. 

• Xi and Putin are going to Brazil BRICs trade summit without Modi; India is sending a senior representative instead.The meeting is going to be virtual with an agenda of discussing trade tariffs imposed by Trump and bolster EM country trade. The move could be strategic to not draw the US’s ire with Trump vowing larger levies on countries bypassing the US and the dollar in trade.

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1. SEBI Fast-Tracks IPOs

India’s market regulator is accelerating approvals for IPOs, aiming to cut processing times in half as companies rush to tap investors in what could be another record year for fundraising.

The SEBI now intends to clear most IPOs within three months of filing, compared with as long as six months previously, according to regulatory and banking sources. The move, driven by new SEBI chief Tuhin Kanta Pandey, comes as part of broader efforts to simplify regulation and ease the pressure on issuers in a crowded pipeline.

SEBI has adopted artificial intelligence tools to scan filings for deficiencies and is working closely with merchant bankers to accelerate clarifications, sources said. The regulator has not formally commented.

India remains the world’s second-largest IPO market after the US, with $20.5 billion (₹1.8 trillion) raised in 2024 and another $8.2 billion (₹723.4 billion) already raised this year. Bankers expect 2025 fundraising to reach $17–20 billion (₹1.5-1.8 trillion), potentially eclipsing last year’s record.

Public offerings worth nearly $13 billion (₹1.1 trillion) already have approval, while another $18.7 billion (₹1.6 trillion) await clearance. Big-ticket IPOs expected this year include LG Electronics’ Indian arm, edtech player Physicswallah, and WeWork India.

While India’s secondary markets have lagged global peers amid heavy foreign outflows and US tariff pressures, primary issuances remain resilient, drawing $4.7 billion (₹414.6 billion) in foreign investor participation so far.

2. RBI Moves Away from US Treasuries

India’s central bank trimmed its holdings of US Treasuries and stepped up gold purchases even before Trump’s 50 percent tariff shock, underscoring a strategic shift to diversify reserves away from the dollar.

Data from the US Treasury Department show India’s holdings fell to $227.4 billion (₹20 trillion) in June, down from $235.3 billion (₹20.8 trillion) in May and about $242 billion (₹21.3 trillion) a year earlier. Meanwhile, the RBI boosted gold reserves to roughly 880 metric tons by July, compared with 841.5 tons a year earlier.

Finance Minister Nirmala Sitharaman said last week the RBI was taking a “considered decision” to diversify its $694 billion (₹61.2 trillion) in reserves. the world’s fourth largest. Officials are increasingly wary of the US dollar’s dominance, particularly after Washington froze Russia’s assets in 2022.

“There is a sense that if the US can shut Russia off from its assets, that can be repeated with any country,” said Gaurav Kapur, chief economist at IndusInd Bank. “Any central bank will want to diversify.”

Alongside fresh purchases, the RBI has also repatriated more of its bullion, holding 512 tons domestically versus 292 tons in 2020. Former deputy governor Michael Patra has argued that central banks need direct access to their gold in case of sanctions or asset freezes.

3. India Accelerates EV Motor Alternatives

India is fast-tracking the development of rare-earth-free electric vehicle motors as Beijing’s export restrictions threaten supplies of critical minerals.

In a lab outside New Delhi, Sterling Gtake E-Mobility is testing high-density reluctance motors that replace rare-earth magnets with tightly wound coils. The company aims to start production within a year, far ahead of its earlier 2029 target, after China announced rare earth export curbs in April.

Seven Indian automakers are evaluating the technology, which could reduce reliance on China, the dominant processor of rare earths. While Beijing has since resumed some shipments to the West, Indian firms remain cut off amid political tensions.

India holds the world’s fifth-largest rare earth reserves but lacks processing capacity. To address this, the government plans to incentivize domestic mining and partner with Japan and South Korea to develop magnet supply chains.

Local start-ups like Chara Technologies and Conifer are also advancing alternatives, with magnet-free motors or ferrite-based designs that can rival performance at lower costs. Global players, including BMW and Nissan, are exploring similar paths.

Though magnet-free motors are heavier and less compact, demand is rising as automakers seek insulation from geopolitical shocks. “Everybody’s scrambling for local solutions,” said Ankit Somani, founder of Conifer.

The shift underscores India’s bid to cut strategic dependence on China as EV adoption accelerates, while securing its place in a reconfigured global supply chain.

See you tomorrow.

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

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