Newspaper Summary - 051125

 Financial Markets and Investments are operating within a complex global landscape characterized by rising scrutiny of corporate finance, significant regulatory changes, and India’s growing prominence despite internal market pressures in Q2 FY26.

Indian Financial Markets & Corporate Performance: Indian financial markets are seeing intense regulatory focus and structural shifts, particularly in capital raising and trading mechanisms. The Securities and Exchange Board of India (SEBI) is planning to revise its 30-year-old stockbroker regulations by December 2025 to adapt to today's technology-driven markets, including addressing algorithmic trading and ensuring stronger governance frameworks. The National Stock Exchange (NSE) has made a nearly ₹1,300 crore provision to settle litigation with SEBI, potentially paving the way for its long-delayed IPO. Meanwhile, the IPO environment is noted for "investor euphoria" where aggressive pricing sometimes eliminates the traditional listing-day premium, as retail investors increasingly treat IPOs as short-term profit vehicles rather than long-term investments.

Corporate earnings for India Inc. in Q2 FY26 showed core operational income recovering (up nearly 5% year-on-year), but overall net profit growth slowed to 7.5% year-on-year due to a significant collapse in non-core income. The Banking, Financial Services, and Insurance (BFSI) sector faced challenges, with both core and non-core income falling to nine-quarter lows, although State Bank of India (SBI) raised its FY26 credit growth outlook to 12-14% based on expected sustained consumption demand supported by GST and interest rate cuts. Private equity activity remains robust, highlighted by ChrysCapital raising its largest India-focused fund of $2.2 billion, signaling India as a "rare bright spot in global investment markets".

Global Economic and Corporate Landscape: Globally, corporate borrowers face intense scrutiny in the credit market following a string of alleged frauds, prompting lenders to increase due diligence and demand more historical financial data from companies. In a significant shift, Japanese companies have raised a record $132 billion in foreign-currency bond and loan deals in 2025, driven by the end of easy monetary policy and the AI boom, establishing Japan as the biggest source of dollar bonds from the Asia-Pacific region, surpassing China.

The adoption of technology, specifically Artificial Intelligence (AI), is a critical component of the corporate landscape, but Nobel laureate James A. Robinson warns that AI is expected to cause the next major inequality shock. Reflecting India's growing technological market importance, OpenAI has started hiring engineers and solutions architects in India, which it identifies as its largest market outside the US. Finance Minister Nirmala Sitharaman also highlighted India’s ascension from the 10th largest economy in 2014 to the 5th currently, positioning it to soon become the 3rd largest. Furthermore, venture debt funds are expanding operations overseas to regions like West Asia and Europe to diversify their exposure, citing limited opportunities domestically and ongoing geopolitical uncertainties.

The global economic and corporate landscape in late 2025 is profoundly shaped by advancements in technology and Artificial Intelligence (AI), characterized by intense geopolitical competition over advanced computing, rising concerns over economic inequality, and strategic expansion by major AI firms into key markets like India.

Geopolitics and Advanced Computing: The geopolitical struggle for technological dominance is evident in the US government's restrictions on exporting advanced AI chips to China. The Trump administration is debating whether to allow Nvidia to sell its latest Blackwell generation of Graphics Processing Units (GPUs) to China, a decision flagged as a "seismic policy shift" that could give Beijing a "technological accelerant". Top US officials and Congress members argue that greenlighting the export of Blackwell chips threatens national security and would boost China’s AI data-center capabilities. Nvidia CEO Jensen Huang has lobbied the administration to gain access to the Chinese market, which is potentially worth tens of billions of dollars. The US is currently requiring Nvidia to develop a less powerful Blackwell chip for China, potentially reduced by 30% to 50% in capability.

AI's Economic and Social Impact: Nobel laureate James A. Robinson warned that AI is expected to cause the next major inequality shock, driving inequality "through the roof". This is because investments in AI infrastructure (like data centers and power) are currently concentrated in rich countries, leading to massive productivity gains there, but exacerbating the gap with developing nations. Within developed countries, the inherent capitalistic logic favors using this technology to replace workers, which Robinson warns will have enormous social consequences on wages and employment. While India’s Niti Aayog projects AI could add $600 billion to the Indian economy by 2035, this forecast relies heavily on successfully reskilling and redeploying displaced workers, a massive logistical and educational challenge given India's scale.

Corporate Strategy and Market Adoption (India): India is emerging as a critical global market for technology firms. Finance Minister Nirmala Sitharaman emphasized that technology is the fifth factor of production, crucial for economies to progress faster. OpenAI, the maker of ChatGPT, views India as its largest market outside the US by user base and is deepening its presence by hiring solutions engineers and architects, specifically focusing on the enterprise segment and developers in Bengaluru. In a push for wider adoption, OpenAI launched a 12-month free access plan for ChatGPT Go in India, though the launch saw temporary service disruptions due to high traffic overwhelming the UPI integration. Meanwhile, Apple's newest M5 chip for the MacBook Pro is positioned as the ideal tool for the AI era, targeting professional users and enthusiasts working on "cutting-edge" AI engineering tasks.

Regulatory and Ethical Concerns: Regulators are responding to technology integration across industries. SEBI is actively revising its 30-year-old stockbroker regulations to align with today's tech-driven markets, including formal definitions and robust risk controls for algorithmic trading. Ethical risks posed by advanced AI systems, which possess powerful reasoning capabilities, include their ability to "steer" outcomes by using humans as "biological middleware" to interact with the world.

Governments and policy bodies worldwide are navigating intense geopolitical competition over technology, implementing critical domestic reforms to align finance with modern markets, and attempting to manage major structural shifts in trade, infrastructure, and institutional trust.

Global Geopolitics, Trade, and Institutional Trust The global landscape is defined by rising political tensions and institutional introspection:

• Geopolitical Tech Control: The US government is actively restricting the export of advanced AI chips, such as Nvidia’s Blackwell generation, to China, viewing it as a national security issue and a technological accelerant for Beijing.
• Trade Barriers: US tariffs (including a steep 50% extra tariff) have impacted India’s merchandise exports to the US, resulting in a 12% decline in September. Additionally, adverse US actions like the hike in H-1B visa fees risk disrupting Indian service exports.
• Institutional Failure: Nobel laureate James A. Robinson characterizes the rise of figures like Donald Trump not as the cause of weakening institutions, but as a response to the failure of US institutions to generate shared prosperity over the last 50 years. This sense of disillusionment is mirrored in other countries (e.g., Philippines, Brazil) where democracy has not transformed societies as expected.
• Diplomacy and Security: India and Israel are collaborating to build a global approach of "zero tolerance" to combat terrorism and enhance trade and connectivity.

Indian Domestic Policy and Economic Strategy Indian policy is focused on scaling its economy, driving consumption, and modernizing governance:

• Economic Vision & Growth: Finance Minister Nirmala Sitharaman highlighted India’s rise from the 10th largest economy in 2014 to the 5th today, projecting it will soon become the 3rd largest. She advocates for India-centric economic models, moving away from Western theories, and stresses that technology is the fifth factor of production essential for rapid economic progress.
• Consumption Enablers: Monetary policy changes by the RBI and fiscal measures like the sweeping GST Council rationalization introduced in September are expected to cut prices, boost consumption demand, and lift credit growth.
• Financial Market Regulation: The Securities and Exchange Board of India (SEBI) plans to revise its 30-year-old stockbroker regulations by December 2025 to modernize rules for today's technology-driven markets. These revisions aim to formalize definitions for activities such as algorithmic trading and proprietary trading, demanding robust risk controls and stronger governance frameworks.
• Telecom Relief: In a major policy intervention citing "larger public interest," the Supreme Court called upon the Centre to reassess and reconsider all Adjusted Gross Revenue (AGR) dues of Vodafone Idea up to FY17, including interest and penalties.
• Aspirations and Targets: India uses expansive quantified targets (e.g., Viksit Bharat by 2047, $600 billion AI boost) as a form of statecraft, acting as instruments of aspiration and accountability. However, many targets are often missed due to structural weaknesses, such as centralized vision without corresponding financial autonomy at lower levels.

Industrial and Sectoral Policies

• Manufacturing Incentives: The government launched the third round (PLI 1.2) of the Production-Linked Incentive (PLI) scheme for speciality steel, aiming to attract investment, expand high-end steel capacity, and create jobs.
• Energy Transition Challenges: Policymakers face challenges in the renewable sector as signed Power Sale Agreements (PSAs) for 43.94GW of capacity remain unsigned, often because power distribution companies (discoms) are waiting for tariffs to fall. The government is considering terminating unviable contracts. Globally, there is policy debate over whether to subsidize solar power or impose a carbon tax on traditional energy to promote energy transition, recognizing that innovation is key to climate solutions.
• Civil Aviation Reform: The Directorate General of Civil Aviation (DGCA) proposed draft rules offering relief to air passengers, including a 48-hour 'look-in' period to cancel a ticket without charge, mandating refunds within 21 days, and allowing cancellation for medical emergencies.

Corporate highlights across the global economic and corporate landscape are characterized by major strategic pivots, focused Indian domestic expansion, and heightened governance issues in late 2025.

Financial Performance and Strategic Growth in India: Several major Indian companies reported significant Q2 FY26 performance and ambitious future plans:

• State Bank of India (SBI) reported a 10% year-on-year rise in net profit to ₹20,160 crore, largely due to an exceptional gain of ₹4,593.22 crore from the partial sale of its Yes Bank stake. SBI raised its FY26 credit growth outlook to 12-14%.
• Adani Enterprises Ltd (AEL) approved raising up to ₹25,000 crore via a rights issue, following a QIP fundraise in October 2024. AEL reported a 6% drop in Q2 total revenue, but secured significant one-time gains from stake sales in AWL (₹2,969 crore) and Adani Cementation (₹615 crore).
• Adani Ports and SEZ (APSEZ) marked a 29% Y-o-Y rise in Q2 profit and a 30% rise in revenue to ₹9,167 crore, highlighting success in its integrated transport utility strategy.
• Bharat Electronics Ltd (BEL) achieved 26% Y-o-Y revenue growth in Q2 FY26 and holds a robust order book of ₹74,500 crore, three times its trailing 12 months’ revenue.
• Ambuja Cements announced a highly aggressive plan to expand capacity from 97 mtpa (FY25) to nearly 155 mtpa by FY28, despite a competitive market, relying on cost optimization to achieve an EBITDA per tonne target of ₹1,450-₹1,500 by FY28.
• Nexus Select Trust, India's first retail REIT, posted a 14% Y-o-Y rise in retail Net Operating Income (NOI) to ₹420 crore and is eyeing a robust acquisition pipeline of ten shopping malls/centers to expand its portfolio to 30 malls by 2029-30.
• IndiGo faced significant external pressure, reporting a net loss of ₹2,582 crore. This loss was primarily driven by a substantial forex loss of ₹2,892 crore due to rupee depreciation affecting dollar-denominated lease costs. The airline's strategy is to increase international routes generating non-rupee revenues to create a natural hedge.

Global and Sectoral Restructuring:

• Mergers & Acquisitions: Kimberly-Clark announced an audacious $40 billion deal to acquire Tylenol maker Kenvue, shifting its strategy into the higher-margin consumer-health and wellness market. However, Wall Street reacted negatively, causing K-C shares to fall 14.6%.
• Governance and Leadership Turmoil: The EdTech firm Aakash Educational Services Ltd (AESL) saw significant leadership churn with the resignation of CFO Vipan Joshi, effective 31 October. This followed the resignation of CEO Deepak Mehrotra in August. Despite this instability, courts upheld the right of Aakash's board to proceed with a rights issue to meet business needs. The Hinduja Group also experienced a major corporate event with the passing of its Chairman, Gopichand P. Hinduja, at 85.
• Telecom Regulatory Relief: Vodafone Idea received a potential lifeline as the Supreme Court asked the government to reassess all AGR dues up to FY17 in the "larger public interest," prompting Bharti Airtel to seek similar relief.

The sources highlight significant issues concerning Social and Health within the broader Global Economic and Corporate Landscape as of November 2025, focusing primarily on poverty, healthcare regulation, public well-being, and technology's social impact.

Poverty and Inequality: A major social discussion revolves around extreme poverty and wealth distribution:

• Poverty Eradication Claim in India: Kerala declared itself the first state in India to eradicate extreme poverty on its formation day (November 1). This achievement is attributed to the state's Extreme Poverty Eradication Project (EPEP) started in 2021. The World Bank defines extreme poverty as subsisting on less than $3 per day, a threshold revised from $2.15 per day in June 2025. However, this declaration has been met with scepticism among economists and experts, who question the empirical basis and the process followed. India, as a whole, still has 5.3% of its population living in extreme poverty.
• Global Poverty Trend: Globally, the extreme poverty rate has fallen sharply from 47.1% in 1981 to 10.3% in 2024. Despite this decline, 839 million people globally still live on less than $3 per day as of 2024. A significant portion (46%) of the extremely poor reside in sub-Saharan Africa.
• AI and Inequality Shock: Nobel laureate James A. Robinson warns that Artificial Intelligence (AI) is expected to cause the next major inequality shock, driving inequality "through the roof". This is because investment in AI infrastructure is concentrating in rich countries, exacerbating the global wealth gap, and within developed nations, the capitalist incentive is to use AI to replace workers, impacting wages and employment.

Public Health and Healthcare Industry: Regulatory and corporate efforts are influencing the health sector:

• Regulatory Simplification for Medical Devices: India is moving to exempt over 1,000 low-risk medical devices, such as acoustic stethoscopes and wheelchairs, from cumbersome licensing. They will instead use a system of self-certified online registration. This aligns with global regulatory standards (EU and US) and is designed to support indigenous manufacturing. The Indian medical devices market is currently valued at $11 billion and is projected to grow to $50 billion by 2030.
• Drug and Vaccine Challenges: Tuberculosis (TB) remains the biggest killer among communicable diseases in India, with 2.6 million new cases and over 321,000 deaths reported in 2024. Serum Institute of India's new TB vaccine was denied approval by a DCGI panel because main studies failed to clearly demonstrate its effectiveness, requiring the company to conduct a new, larger study. Separately, the government is set to review the knee implant price cap, which previously led to a 70% reduction in prices in 2017.
• Corporate Healthcare Investment: Novo Holdings (which controls Novo Nordisk, maker of obesity drug Wegovy) is intensifying its focus on India, targeting single-specialty hospitals and contract drugmakers. This strategy aims to tap into the high-growth healthcare segments preferred by Indian patients, with Novo now making bigger deals ranging from $50 million to $125 million.
• Consumer Health and Wellness: Kimberly-Clark is making a significant corporate pivot by acquiring Kenvue, seeking greater exposure to the higher-margin health and wellness market. This shift is motivated by the fact that beauty and wellness have been a relative bright spot in consumer spending, reinforced by consumers leaning into self-care and preventive care since the pandemic. Aging global populations provide a strong "tailwind" for this sector over the next 30 years.
• Nutrition and Dairy: New-age dairy firm Akshayakalpa is focusing its expansion strategy on protein-rich milk products due to rising demand, noting that over 75% of Indians consume less protein than recommended. The successful launch of high-protein paneer validated this corporate strategy.

Social Governance and Consumer Protection: Policy interventions are directly addressing consumer welfare:

• Air Passenger Relief: The Directorate General of Civil Aviation (DGCA) has proposed new draft rules to relieve air passenger "pain points". These interventions include a 48-hour ‘look-in’ period to cancel a ticket without charge, mandatory airline completion of refunds within 21 days, and allowing cancellation for medical emergencies.
• Sports and Leisure: The corporate sector is adapting to shifting leisure habits, with Eternal Ltd-owned District planning to add a 'Play' feature for booking sports facilities like pickleball and badminton courts, capitalizing on the market driven by younger users seeking engaging fitness goals and leisure time.