📰India's Industrial Output Slows, Wheat Harvest Surpasses Expectations, EQT Secures Loan

Good afternoon, 

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

• India’s industrial production growth dropped to an eight-month low of 2.7 percent,

• India’s wheat harvest exceeded expectations,

• EQT has secured a $162 million (₹13.9 billion) loan to fund a shareholder payout at Indira IVF,.

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

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Market Update.

India’s Industrial Output Slows to 8-Month Low.

India’s industrial production growth dropped to an eight-month low of 2.7 percent in April, down from a revised 3.9 percent in March, dragged down by weak performance in the electricity and mining sectors, according to government data released on Tuesday.

The slowdown comes amid broader signs of cooling momentum in the economy, with India’s core sector, which makes up 40 percent of the Index of Industrial Production (IIP), also expanding at its slowest pace in eight months. Core industries growth fell sharply to 0.5 percent in April from 4.6 percent the month before, largely due to a high base and uncertainty around new US trade tariffs introduced by the Trump administration.

Market weaknesses: The weakness in industrial activity was broad-based. Mining contracted for the first time in eight months, declining 0.2 percent y-o-y and down 17 percent from March. Electricity generation also decelerated sharply, growing just 1.1 percent compared to 7.5 percent in the previous month.

Manufacturing, which accounts for the bulk of the IIP, posted a modest decline in momentum. Growth eased to 3.4 percent in April from 3.9 percent in March, but still provided some support to overall industrial activity.

Bright spots: Despite the overall deceleration, some use-based industries showed resilience. Capital goods output surged 20.3 percent, the fastest pace in nearly two years, aided by a favorable base effect. Consumer durables grew by 6.4 percent, only slightly below the 6.9 percent seen in March.

However, challenges remain. Infrastructure goods growth slipped to a seven-month low of 4 percent, while consumer non-durables continued to contract for the third consecutive month, declining 1.7 percent y-o-y.

A cautious outlook: Looking ahead, analysts are cautious about May’s industrial performance. An early monsoon and unseasonal rains could dampen power generation and disrupt construction-related activity. The base effect from May 2024, when factory output grew 6.3 percent, is also expected to weigh on the year-on-year comparison.

While some segments of the economy show signs of resilience, India’s industrial landscape remains vulnerable to external shocks, weather disruptions, and policy uncertainties — factors that could weigh on recovery in the coming months.

India’s Wheat Harvest Surpasses Expectations, No Imports Needed.

India will not need to import wheat this year after a stronger-than-expected harvest, the government said Tuesday, quashing speculation that supply shortfalls would force purchases from overseas. The Ministry of Consumer Affairs reported that wheat procurement by government agencies reached 29.7 million metric tons so far this season, the highest in four years. That’s a sharp turnaround from previous years, when procurement fell short due to adverse weather and lower yields.

The ministry also noted that favorable weather and improved seed varieties contributed to a strong crop. The update comes amid market rumors of potential imports to control food inflation, which have now been put to rest.

Revised estimates from the agriculture ministry peg wheat production at 117.5 million metric tons for the 2024-25 crop year, up from 113.3 million tons a year earlier. Overall foodgrain output is forecast to hit a record 353.95 million tons, helping support food security and curb volatility in staple prices.

Hoarding regulation: To prevent speculative hoarding and ensure stable prices, the government has also imposed new stock limits on wheat. Retailers can hold no more than 10 tons, while traders are capped at 3,000 tons. Wholesalers and large chain retailers face limits of 10 tons per outlet and 3,000 tons per entity. 

Officials say these measures are essential to keep wheat flowing into markets and prevent price spikes, especially ahead of the festive and monsoon seasons.

Market stability: Wheat prices in major wholesale markets have eased in recent weeks after a brief uptick earlier this year. The Food Corporation of India continues to offload grain under its Open Market Sale Scheme to ensure adequate availability and support retail prices. Several officials across the government have then reiterated the idea that domestic supply is sufficient and that prices remain flat. 

India is the world’s second-largest wheat producer but has had to manage volatility in recent years due to erratic weather and rising food demand. The current harvest relieves pressure on policymakers as they work to control inflation and balance food exports with domestic needs. With healthy procurement, improved storage, and a stronger crop outlook, India appears well-positioned to meet its food security goals this year.

EQT Secures Loan to Fund Payout for Indira IVF Stakeholders.

Swedish private equity firm EQT has secured a $162 million (₹13.9 billion) loan to fund a shareholder payout at Indira IVF, India’s largest fertility services provider, in which it holds a majority stake, according to people familiar with the matter.

The loan, structured as a dividend recapitalization, involves participation from 16 banks, including BNP Paribas, HSBC, and DBS, along with multiple Taiwanese lenders, one of the investors said. The financing package carries a six-year tenor.

Dividend recapitalizations are commonly used in private equity when conventional exit routes, like a sale or IPO, are delayed or unattractive. By piling debt onto portfolio companies, sponsors can generate cash returns for investors while continuing to hold the asset. EQT declined to comment on the transaction.

The deal adds to a growing list of similar transactions globally, as private equity firms face mounting pressure to return capital to limited partners amid sluggish exit markets. Earlier this year, EQT-backed Fitness Passport launched a $500 million (₹42.8 billion) syndicated loan aimed at partially funding a dividend payout. 

IPO still in play: Indira IVF’s latest financing comes just six months after EQT was reported to be exploring an IPO for the company, which could raise as much as $400 million (₹34.2 billion). While a formal listing timeline hasn't been announced, a public share sale could come as early as this year.

EQT acquired its controlling stake in Indira IVF in 2023 from TA Associates and the founding team, who retained a minority interest and continued to lead the business. Founded in Udaipur, Indira IVF now operates more than 150 fertility centers across India and employs over 330 IVF specialists, making it the country’s largest network of reproductive health clinics.

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Gupshup.

Macro

• Bajaj Auto warned that India’s vehicle production could be disrupted by July due to China’s export curbs on rare earth magnets, with no Indian import applications approved so far. Despite the supply risk, Bajaj posted strong Q4 results, with net income rising 5.7 percent to $240 million (₹20.5 billion).

• India's chief negotiator is hopeful of a good outcome for US-India trade talks. The negotiator, Rajesh Agrawal, spoke at an event saying that trade talks were moving smoothly. He did not announce a direct timeline or expected trade concessions as of this time. 

• Gold holds firm as markets are digesting a potential judicial blocking of Trump tariffs. Gold has been up this past week due to volatile US economic prints and the potential of widespread tariffs being reduced. Sectoral tariffs remain a potential concern.  

Equities

• Google starts to sell Pixel phones in direct online sales ahead of physical store openings. Indian users can now finally purchase Pixels from the Google Store; currently, Google uses services like Walmart and Flipkart. Google is also launching its first physical stores in a bid to reach success, similarly to how Apple markets its international stores.

• VinFast will open its Tamil Nadu EV plant a month later than planned as it negotiates a $200 million (₹17.12 billion) loan with Indian state banks. Shifting focus to Asia, the automaker eyes India, Indonesia, and Vietnam to drive expansion amid scaling back in Western markets. 

• Ola Electric Scooters reported a large quarterly loss after revenue halved to $98.2 million (₹8.4 billion). Increased regulation, scrutiny, and slowing sales have caused the company to run into financial hardship lately. The CEO announced a silver lining, expecting gross margins to hit around 30 percent. New Ola vehicle registrations still fell by 52 percent y-o-y.

• Indian equities are expected to rally in the second half of 2025, driven by strong foreign inflows and improving earnings, according to strategists from Nomura, HSBC, and others. The rebound could help India outperform Asian markets for a fifth straight year, a feat last achieved in 2003.

Alts

• India’s Shapoorji Pallonji Group has secured $3.4 billion (₹291 billion) in the country’s largest-ever private credit deal, selling high-yield zero-coupon rupee bonds to global investors including Ares, Cerberus, and Farallon. The financing reflects growing interest in India’s private credit market amid rising infrastructure investment.

• LIC was the sole buyer in Adani Ports’ record $585 million (₹50 billion) 15-year rupee bond sale at a 7.75 percent coupon, signaling renewed investor confidence after past controversies. The funds will support capex and debt refinancing, marking Adani Ports' largest rupee deal to date.

• Bank frauds in India tripled to $4.2 billion (₹360 billion) in FY2025, mainly due to loan-related scams, while digital payment frauds fell. Private banks saw a 270 percent surge in frauds, prompting the RBI to plan a Digital Payments Intelligence Platform.

• JPMorgan forecasts rising deal activity in Asia-Pacific as firms pursue M&A, divestments, and capital raising. Japan and India are key hotspots, with normalized valuations and growing private equity interest driving momentum.

Policy

• The RBI posted record profits driven by forex and interest gains, allowing it to pay a historic dividend to the government. It also plans to review its monetary policy and expand digital currency efforts while aiming for 4 percent inflation.

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.