Market Value Repurchase and the Mitigation of Mortgage Lock-in

 The "core innovation" of the Danish mortgage system is the right of a borrower to repurchase their outstanding mortgage at its current market value. This feature distinguishes Danish fixed-rate mortgages (FRMs) from those in the United States, where mortgages can generally only be prepaid at par.

The Mechanism of the Buy-Back Innovation

In the Danish model, mortgage lending is governed by the "balance principle," where specialized mortgage banks fund loans by issuing covered bonds with identical cash flows. Because these bonds are traded in a deep secondary market, their prices fluctuate with interest rates.

The buy-back innovation allows a borrower to:

• Realize Capital Gains: When interest rates rise, the market price of the underlying covered bonds falls. A borrower can purchase these bonds at a discount in the secondary market and deliver them to the lender to retire their debt below its face value.
• Self-Execute Transactions: Unlike alternative mechanisms like mortgage assumability or portability, which often require discretionary lender approval and complex re-underwriting, the buy-back right is contractually self-executing at observable market prices.

Mitigating the "Lock-In" Effect

The primary macroeconomic value of this innovation is its ability to eliminate interest-rate-induced "lock-in". In the U.S. system, households with low-coupon mortgages face a strong financial disincentive to move when market rates rise, as they would forfeit the embedded value of their cheap debt by prepaying at par.

In contrast, the sources highlight several key differences in the Danish context:

• Stable Mobility: Danish moving hazards remain largely insensitive to interest rate increases. Households can relocate at nearly constant rates even when prevailing market rates substantially exceed their existing mortgage coupons because they do not lose their embedded capital gains.
• "U-Shaped" Refinancing Hazards: While U.S. refinancing activity disappears when market rates exceed existing coupons, Danish households actively refinance in both falling-rate and rising-rate environments. When rates rise, they repurchase discounted debt to realize capital gains and often refinance into higher-coupon, par-priced mortgages.

Supporting Institutional Factors

The effectiveness of this innovation is reinforced by other elements of the Danish system:

• Tax Incentives: Capital gains realized from these discounted buy-backs are not taxable in Denmark. Furthermore, because mortgage interest is tax-deductible, households are incentivized to refinance into higher-rate mortgages to increase their future tax shields, a trade-off similar to corporate capital structure theories.
• Beliefs about Interest Rates: Households who view high interest rates as transitory may aggressively buy back discounted debt, intending to refinance again when rates eventually decline.

Implications for the U.S. Market

Counterfactual experiments in the sources suggest that introducing this Danish-style buy-back option into the U.S. market would substantially reduce lock-in and preserve household mobility. The model predicts that the cost of adding this option would be modest, increasing equilibrium mortgage rates by an average of only 18 basis points. This is because the "windfall" investors currently receive from movers who must prepay discounted mortgages at par—which currently exerts downward pressure on rates—is relatively infrequent.

The empirical findings from the Danish mortgage market demonstrate that the buy-back model fundamentally alters household behavior during interest rate cycles, particularly by enabling debt reduction when rates rise and preserving mobility. These findings are based on comprehensive administrative micro-data covering the universe of Danish households from 2010 to 2024.

The sources document three primary empirical facts:

1. The "U-Shaped" Refinancing Hazard

The data reveal that Danish refinancing behavior follows a distinct "U-shape" relative to the "coupon gap" (the difference between a borrower's existing rate and the current market rate),.

• Positive Gaps (Standard Refinancing): Consistent with U.S. evidence, refinancing hazards increase sharply when the mortgage coupon exceeds the market rate, as borrowers move to lock in lower borrowing costs. Notably, Danish borrowers refinance at faster speeds (approximately 300 bps/month) compared to U.S. borrowers (200 bps/month), suggesting fewer financial or behavioral frictions.
• Negative Gaps (Discounted Buy-Backs): Unlike in the U.S., where refinancing disappears when rates rise, Danish hazards rise markedly when market rates exceed coupons by more than 200 bps. Households actively repurchase their debt below par to realize capital gains. For example, during the sharp rate hikes of 2022–2023, some households realized gains of nearly 30% of their mortgage's face value. In 2022 and 2023 alone, there were approximately 100,000 discount mortgage repurchases.

2. Elimination of the "Lock-In" Effect

The most striking empirical finding is that Danish moving hazards are nearly flat across negative coupon gaps.

• Insensitivity to Rates: While U.S. moving rates fall sharply as interest rates rise (estimated at a 57–120 bps annual decline for every 100 bps rate increase), the corresponding effect in Denmark is economically negligible.
• Preserved Mobility: Danish households continue to relocate at nearly constant rates even when market rates substantially exceed their existing coupons because they can move without forfeiting the embedded capital gains in their mortgages. Aggregate data shows that despite the surge in rates in 2022, FRM moving rates returned to pre-pandemic levels rather than collapsing as they did in the U.S..

3. Drivers of Behavioral Responses

The sources use empirical evidence to identify why Danish households optimally replace low-coupon debt with higher-coupon debt:

• Tax Incentives: Because mortgage interest is tax-deductible (at an effective flat rate of 33% in Denmark) and capital gains from buy-backs are not taxable, households find it profitable to realize a lump-sum gain now in exchange for higher future tax shields,.
• Refinancing Frictions: The data suggests Danish households face very low frictions; for instance, at origination, borrowers have almost no ability to negotiate rates, as nearly all mortgages cluster at a single publicly observable coupon rate (R² of 0.92 for origination month),.

4. Comparison to Alternative Mechanisms

Empirical registry data confirms that the buy-back right is the preferred tool for Danish households. While "mortgage assumptions" (allowing a buyer to take over a seller's rate) are technically legal in Denmark, they are rarely used. Between 2020 and 2023, there were fewer than 2,500 assumed mortgages, compared to the hundreds of thousands of discount repurchases during the same period. This suggests that contractually self-executing buy-back rights are far more effective than discretionary mechanisms like assumption or portability.

The institutional framework of the Danish mortgage system is a highly specialized and stable capital-market-based structure that enables unique borrower behaviors, such as the buy-back right, while maintaining financial stability through strict matching principles.

The Balance Principle and Funding Model

At the core of the framework is the "balance principle," which requires specialized mortgage banks to fund every loan by issuing covered bonds with identical cash flows.

• Risk Distribution: This design ensures that the mortgage bank bears no interest rate or prepayment risk, as these are passed directly to bond investors.
• Secondary Market: Because these bonds are traded in deep secondary markets, their prices fluctuate based on market interest rates.
• Borrower Innovation: The framework grants borrowers the contractual right to repurchase their outstanding debt by buying the corresponding bonds in the secondary market and delivering them to the lender. This allows borrowers to retire debt at a discount when interest rates rise and bond prices fall.

Taxation and Financial Incentives

The institutional effectiveness of the buy-back model is heavily reinforced by the Danish tax code:

• Interest Deductibility: Mortgage interest is classified as "negative capital income" and is tax-deductible at an effective flat rate of 33%.
• Tax-Exempt Capital Gains: Crucially, capital gains realized by households through discounted buy-backs are not taxable.
• The "Trade-Off" Strategy: These tax rules create a powerful incentive for households to engage in "upward conversion"—repurchasing discounted low-coupon debt and refinancing into higher-coupon mortgages. By doing so, households realize a tax-free lump-sum gain while increasing their future tax shields through higher interest deductions.

Credit Risk and Regulation

The framework distinguishes between market risks (interest rate/prepayment) and credit risks:

• Bank Accountability: While investors bear interest rate risk, mortgage banks retain the credit risk.
• Safety Mechanisms: This risk is managed through conservative regulations, including a loan-to-value (LTV) limit of 80% for owner-occupied homes, full recourse against borrowers, and efficient foreclosure procedures.
• Contribution Fees: Mortgage banks charge a separate "contribution fee" to compensate for credit risk, which is distinct from the mortgage coupon received by investors.

Implementation and Comparison

The sources contrast this "self-executing" contractual framework with alternative mechanisms like mortgage assumability or portability. While those alternatives rely on discretionary lender approval and complex re-underwriting, the Danish buy-back right operates automatically through existing refinancing infrastructure at observable market prices.

For potential implementation in the U.S. Agency market, the sources suggest that instead of moving to a covered bond system, the framework could be adapted by modifying the prepayment terms of agency MBS to allow borrowers to prepay at the lesser of par or current market value.

The tax-free status of buy-back gains in Denmark is a fundamental driver of household financial behavior, particularly through a strategy known as "upward conversion". This tax treatment, combined with the deductibility of mortgage interest, encourages households to actively manage their debt in ways that are largely absent in other markets like the United States.

The influence of this tax-free status on household decisions is characterized by the following mechanisms:

1. Incentivizing "Upward Conversion"

In a rising interest rate environment, the market value of a low-coupon mortgage falls. The tax-free status of capital gains allows Danish households to repurchase this debt at a discount and realize the gain without any tax liability. Households often then refinance into a new, higher-coupon mortgage at par. This creates a specific financial trade-off:

• Immediate Gain: The household receives an immediate, tax-exempt lump-sum gain by retiring their debt below its face value.
• Future Tax Shields: While the new mortgage has a higher interest rate, those interest payments are tax-deductible at an effective flat rate of 33%. By "monetizing" the discount on their old mortgage, households effectively increase their future tax deductions, lowering the present value of their lifetime tax liabilities.

2. Driving Refinancing During Rising Rates

This tax structure explains why Danish refinancing activity follows a "U-shape," rising even when market interest rates exceed a borrower's existing coupon (a "negative coupon gap"). In the U.S., where debt forgiveness is generally treated as taxable ordinary income, such refinancing activity almost entirely disappears when rates rise. In Denmark, however, the ability to realize these gains tax-free makes high-coupon, par-priced mortgages more attractive on an after-tax basis than holding onto a discounted low-coupon mortgage.

3. Eliminating the "Lock-In" Effect

The tax-free nature of these gains is a primary reason why Danish household mobility remains insensitive to interest rate hikes.

• In systems without this feature, households are "locked in" to their homes because moving would require them to prepay their discounted mortgage at par, forfeiting its embedded value.
• In Denmark, because the gain from buying back the mortgage at its discounted market value is not taxed, households can move and "crystallize" those gains to help finance a new property. This allows moving hazards to remain nearly flat even when market rates are substantially higher than existing mortgage coupons.

4. Comparison to the U.S. Context

The sources note that even if the U.S. adopted a similar buy-back right, the effect would be significantly dampened unless the tax code were also modified. Under current U.S. law, capital gains from debt forgiveness are typically taxable, and mortgage interest deductibility is weaker and more capped than in Denmark. Modeling suggests that if the U.S. implemented buy-back rights without taxing the gains, refinancing hazards for negative coupon gaps would become much more pronounced.

The economic mechanisms of the Danish mortgage buy-back model revolve around a unique contract design that allows borrowers to manage the market value of their debt, thereby preserving mobility and enabling debt reduction during rising interest rate cycles,. These mechanisms are driven by the interaction of secondary bond market pricing, specific tax incentives, and household expectations,.

1. Market Value Repurchase and Capital Gain Realization

The central economic mechanism is the repurchase-at-market-value right. Unlike the U.S. system, where mortgages must be prepaid at par, Danish borrowers can repurchase their debt at its current market value when interest rates rise and bond prices fall,,.

• Monetizing Debt: This allows households to "crystallize" or monetize the embedded capital gains in their mortgages,.
• Eliminating Lock-In: Because moving does not require forfeiting the value of a low-coupon mortgage—borrowers simply buy it back at a discount—household mobility remains insensitive to interest rate hikes,.
• Investor Windfalls: In par-prepayment systems like the U.S., investors receive a "windfall" when movers prepay discounted debt at par. The Danish mechanism eliminates this windfall, leading to slightly higher equilibrium rates (estimated at ~18 bps for the U.S.) but greater borrower flexibility,.

2. The Tax-Shield Mechanism ("Upward Conversion")

A powerful driver of the Danish model is the "upward conversion" strategy, which mirrors the corporate finance "trade-off theory" of capital structure,.

• The Trade-Off: Households balance the fixed costs of refinancing against the benefit of an increased tax shield,.
• Tax Arbitrage: Because mortgage interest is tax-deductible (at a 33% rate) and capital gains from buy-backs are tax-exempt, it is often optimal for a household to replace a low-coupon, discounted mortgage with a higher-coupon, par-priced mortgage,. This increases future tax deductions while providing an immediate, tax-free lump-sum gain,.

3. The Balance Principle and Funding Matching

The model operates through the "balance principle," where specialized mortgage banks match each loan by issuing covered bonds with identical cash flows.

• Risk Transfer: Interest rate and prepayment risks are passed directly to bond investors in a deep secondary market,.
• Competitive Pricing: This ensures that the buy-back right is contractually self-executing at transparent, publicly observable market prices, eliminating the need for bilateral negotiation or discretionary lender approval,.

4. Behavioral Frictions and Opportunity Arrivals

Economic behavior in the model is constrained by stochastic opportunity arrivals and fixed costs,.

• Inattention: Households do not adjust continuously; instead, opportunities to refinance ($\lambda$) or move ($\psi$) arrive according to Poisson processes,.
• Fixed Costs: Refinancing involves transaction costs ($\kappa_\lambda$), and moving involves net relocation costs or benefits ($\kappa_\psi$). These costs create "inaction regions" where borrowers only act if the coupon gap (positive or negative) is large enough to overcome the transaction friction,.

5. Heterogeneous Beliefs and Rate Persistence

Beyond tax incentives, the model accounts for divergent expectations regarding interest rate movements,.

• Transitory Beliefs: If a household believes that high interest rates are transitory (mean-reverting faster than the market expects), they are more likely to aggressively buy back discounted debt,.
• Bridge Financing: Borrowers may view a higher-coupon refinance as a "temporary bridge," intending to refinance again when rates eventually decline.

6. Secondary Economic Drivers

• LTV and Contribution Fees: Refinancing a discounted mortgage reduces the outstanding principal, which lowers the Loan-to-Value (LTV) ratio. This can lead to a lower "contribution fee" (credit fee) charged by the bank, providing an additional minor incentive for buy-backs.
• Liquidity Extraction: Discounted buy-backs allow households to extract home equity as liquid funds, which can be particularly valuable for liquidity-constrained households facing large expenditures.

Counterfactual experiments in the sources suggest that introducing a Danish-style buy-back option into the U.S. mortgage market would substantially reduce interest-rate-induced lock-in and preserve household mobility, even in high-rate environments. Under the current U.S. system, households with low-coupon mortgages are discouraged from moving because doing so would require them to prepay their debt at par, thereby forfeiting its embedded value. A buy-back option would allow them to relocate without this financial penalty by retiring their debt at its discounted market value.

Impact on Mortgage Rates

The sources indicate that the equilibrium cost of adding this option to U.S. mortgages is relatively modest:

• Average Increase: Mortgage rates would rise by an average of only 18 basis points.
• Reasoning: Currently, U.S. mortgage investors receive a "windfall" when borrowers must prepay discounted mortgages at par due to moving. While the buy-back right eliminates this windfall, the effect on rates is small because such move-related prepayments are relatively infrequent.
• State-Dependency: The pricing effect is highest when rates are low (approximately 40 bps) and negligible when rates are high, which means it would not significantly worsen affordability during periods of high interest rates.

Institutional and Tax Challenges

While the buy-back right effectively preserves mobility, its ability to stimulate refinancing in a rising-rate environment (as seen in Denmark) is more constrained in the U.S. due to different institutional frameworks:

• Capital Gains Taxation: Unlike in Denmark, where buy-back gains are tax-exempt, U.S. law generally treats debt forgiveness as taxable ordinary income. Without a tax exemption, the incentive to refinance into a higher-coupon mortgage just to realize the gain is significantly weakened.
• Interest Deductibility: The U.S. offers weaker interest deductibility (due to the 2017 TCJA and caps on principal) compared to Denmark’s 33% flat rate, further reducing the benefit of the "upward conversion" strategy.

Implementation in the U.S. Market

Implementing this reform would require different adjustments depending on the market segment:

• Agency Market: This would involve modifying agency MBS prepayment terms to allow borrowers to prepay at the lesser of par or current market value. This would require a revised GSE guarantee but would not necessitate a total overhaul of existing secondary market infrastructure.
• Jumbo Market: Lenders who hold mortgages in portfolios would need accounting and regulatory adjustments. Currently, accepting a discounted payment would trigger immediate P&L losses for banks, discouraging them from participating even if the transaction is economically sound.

Comparison with Alternative Mechanisms

The sources argue that buy-back rights are superior to other proposals like mortgage assumability or portability.

• Self-Executing: Buy-back rights are contractually self-executing at transparent market prices and do not require discretionary lender approval or complex re-underwriting.
• Low Take-Up of Alternatives: Mechanisms like assumability are already formally available for FHA and VA loans but have seen negligible take-up (well under 0.05% annually) because they face severe practical frictions and lender "gatekeeping".

Implementing a Danish-style buy-back right in the U.S. would primarily involve modifying existing contract terms rather than overhauling the entire secondary market infrastructure. The sources suggest this reform could significantly reduce interest-rate-induced "lock-in" with a modest impact on mortgage rates.

Implementation in the Agency Market

For the U.S. agency market (GSE-backed loans), implementation would focus on the prepayment rules within mortgage-backed securities (MBS):

• Contractual Modification: Borrowers would be granted the right to prepay at the lesser of par or current market value.
• Standardized Pricing: To ensure transparency for investors, the "market value" would be determined using standardized models or publicly available indices, such as TRACE transaction prices for agency MBS with similar maturities and coupons.
• GSE Guarantees: The Federal Housing Finance Agency (FHFA) would likely need to adjust GSE guarantee terms to allow principal payments at market value while still ensuring timely interest payments to investors.
• Minimal Disruption: The sources emphasize that this would not require a transition to the Danish "covered bond" system; it would preserve the existing MBS, TBA, and servicing infrastructure.

Implementation in the Jumbo Market

In the jumbo segment, where banks often hold loans in their own portfolios, the challenges are primarily accounting-related:

• Accounting Losses: Under current rules, accepting a discounted payoff would trigger an immediate Profit and Loss (P&L) loss for the bank because these loans are often marked at par on balance sheets.
• Regulatory Reform: Reducing these barriers would require reforming accounting and regulatory capital rules so that balance sheet valuations better reflect mark-to-market values, thereby removing the disincentive for banks to accept economically sound discounted repurchases.

The U.S. Taxation Hurdle

The sources identify U.S. tax law as a major constraint that would dampen the effect of the buy-back right compared to Denmark:

• Taxable Gains: Unlike in Denmark, where buy-back gains are tax-exempt, U.S. law generally treats debt forgiveness as taxable ordinary income.
• Impact on Refinancing: While the buy-back right would still restore household mobility, the incentive to actively refinance into higher-rate mortgages (to realize capital gains) would be much weaker in the U.S. unless accompanied by a tax exemption.

Equilibrium Pricing and Economics

Counterfactual modeling indicates the cost of adding this option is relatively low:

• Modest Rate Increase: Equilibrium mortgage rates would rise by an average of only 18 basis points.
• State-Dependent Cost: The price increase would be highest when market rates are low (roughly 40 bps) and negligible when rates are high—precisely when affordability concerns are most acute.
• Superiority to Alternatives: The sources argue that buy-back rights are superior to assumability or portability because they are contractually self-executing. Mechanisms like assumability are already available for FHA/VA loans but are rarely used because they require discretionary lender approval and complex re-underwriting.

Newspaper Summary 220326

 

Six passive equity funds to buy the dip

By Aarati Krishnan

With the Iran conflict stretching on and foreign portfolio investors selling stocks aggressively, the market mood has shifted from cautious optimism to gloom. For retail investors, deciding which specific stocks to buy during such volatility is a daunting task, as different sectors like crude-sensitive airlines or domestic consumption face varying headwinds. Instead of trying to decipher these complexities, an easier route to capitalise on the market fall is to buy passive funds.

Indian fund houses currently offer a roster of 677 index funds and Exchange Traded Funds (ETFs). Based on an analysis of these offerings, there are six types of index funds suitable for different investor profiles, provided they have a minimum time horizon of five years.

For New Equity Investors

Those making their debut in equity funds can consider a Nifty100 index fund or a Nifty LargeMidcap 250 fund.

• 1. Nifty100 Index Fund: This index owns the top 100 stocks by market capitalisation, representing the official large-cap universe. It is often a better choice than its popular sibling, the Nifty 50, because it is more diversified and has a better return record. Over the last 20 years, it has delivered an average return of 12.6 per cent compared to 12.2 per cent for the Nifty 50, with a much lower probability of losses. Its valuation has recently corrected to 20.2 times PE from a 2024 peak of 25.3.
  • Recommended Funds: Bandhan Nifty100 Index Fund (lowest expense ratio at 0.10 per cent) and Axis Nifty 100 Index Fund.
• 2. Nifty LargeMidcap 250 Index Fund: This index offers a neat 50-50 weight split between the top 100 and the next 150 stocks. It has a superior risk-reward profile compared to the Nifty500, delivering an average 14.4 per cent CAGR over five-year periods. While it rarely delivers capital losses over a five-year holding period, it is currently pricier than the Nifty100 with a PE of nearly 24.
  • Recommended Funds: Zerodha Nifty LargeMidcap 250 Fund (0.27 per cent expense ratio), HDFC, or ICICI Pru.

For Aggressive Investors

• 3. Nifty Smallcap 250 Index Fund: For those with a high risk tolerance, this index skims the "creamy layer" of the small-cap universe by focusing on the top 250 names below the mid-cap layer. It is highly volatile, having nosedived 70 per cent in its worst year, but it managed a 40 per cent CAGR in its best five-year spell over the last two decades. The index PE has corrected from over 35 times in 2024 to 24 times currently.
  • Recommended Fund: Motilal Oswal Nifty Smallcap 250 Index Fund (0.33 per cent expense ratio).

For Defensive Investors

Defensive investors looking for a smoother journey during market mayhem have three distinct options:

• 4. Nifty 500 Value 50 Index Fund: This fund selects the 50 best-scoring stocks from the Nifty 500 based on an aggregate of PE, Price-to-Book, Price-to-Sales, and dividend yield ratios. It has trounced the Nifty100 significantly in the last five years with a 29.4 per cent CAGR and restrict losses during downturns. Its portfolio currently features a modest PE of 9.7 times.
  • Recommended Fund: Axis Nifty 500 Value 50 Index Fund (0.17 per cent fee).
• 5. Nifty Dividend Opportunities 50 Index Fund: This index targets companies with high and stable dividend yields, which acts as an anchor for stock prices when growth visibility is low. It offers lower return volatility (14.5 per cent standard deviation) compared to the Value 50 index.
  • Recommended Fund: Nippon India ETF Dividend Opportunities 50.
• 6. Nifty 100 Low Vol 30 Index Fund: This "volatility-killing" index picks 30 large-cap stocks with the lowest standard deviation of daily returns. While it may lag in aggressive bull markets, it outperforms by holding steady during turbulent phases, managing a 12.9 per cent CAGR over the last five years.
• Recommended Fund: Mirae Asset runs a fund tracking this index.

Battle scars

By Nishanth Gopalakrishnan

The past three weeks since the start of the US-Israel-Iran war have been quite painful for global markets. Equities, commodities, bonds and currencies have been invariably volatile. Secularly, equities have declined, and bonds have cracked as yields spiked. Commodities, except for crude and natural gas, have fallen as well. As the dollar strengthened, other major currencies depreciated against it.

The following points provide a visual stock-taking of the market's current state:

• Equity indices slide
• Sovereign yields firm up
• Energy costs more, metals fall
• Dollar gains
• Auto, Oil & Gas – sectors worst hit

Resistance holds

By Akhil Nallamuthu

Weak structure suggests continuation of the decline

Nifty 50 (23,115) and Nifty Bank (53,427) were down 0.2 per cent and 0.6 per cent respectively over the last week. While both indices tried to overturn the trend, the attempt met with a strong resistance resulting in a decline. Here is our analysis of charts and the derivatives data of both indices:

NIFTY 50

Nifty futures (March) (23,141) was down 0.3 per cent last week. During the first half, the contract rallied and made a high of 23,876 on Wednesday. However, on Thursday, it witnessed a considerable fall. Consequently, despite a recovery on Friday, the contract posted a weekly loss.

Although 23,000 is a support ahead, given the strength of the bears, we expect Nifty futures to see a further decline, potentially to 22,700. Support below 22,700 is at 22,500. Only a decisive breakout of 24,000 can turn the outlook positive. Until then, the intermittent rises are likely to be seen as selling opportunities, leading to the arrival of fresh short positions.

While Nifty futures was down 0.3 per cent for the week, the outstanding open interest of the contract saw a decline from 200 lakh contracts to 172 lakh contracts. By definition, this indicates long unwinding. However, from a broader picture, the data shows that some shorts have exited over the last week, reflected in cumulative open interest dropping from 242 lakh contracts to 228 lakh contracts.

Yet, there are shorts in the system and the strong sell-off in the second half of last week indicates that the bears hold the upper hand over the bulls. That said, the Put Call Ratio (PCR) of Nifty March options stood at 1.1 on Friday, showing some positive bias. But considering all factors, the probability of a decline remains high.

• Strategy: Retain the short trade suggested last week at 23,750, but revise the stop-loss from 24,200 to 23,500 to lock in some profits. Exit the trade at 22,700. For fresh positions, one can wait and short Nifty futures if it inches up to 23,300, with a target of 22,700 and a stop-loss of 23,500.

NIFTY BANK

Nifty Bank futures (March) (53,554) saw an uptick during the first half of last week, but the rally did not sustain. While the contract made a high of 55,660 on Wednesday, what followed was a sharp decline, leading to a weekly loss of 0.7 per cent.

The contract is now trading near a support at 53,500. This base helped Nifty Bank futures rebound last week, but we expect it to give up this time, eventually leading to a decline in upcoming sessions. A breakdown below 53,500 can open the door for a fall to 51,850; the next support is at 50,500. If the contract bounces off 53,500 again instead of breaching it, we might see a rise to 54,500 or 55,000. For the trend to turn bullish, Nifty Bank futures should break out of 55,500.

As March futures dropped last week, the outstanding open interest decreased from 22.6 lakh contracts to 19.4 lakh contracts, indicating unwinding of long positions. However, unlike in Nifty futures, cumulative open interest marginally increased from 32.2 lakh to 32.4 lakh contracts, hinting that bears are calling the shots at a broader level. Supporting the bearish inclination, the PCR of March options stood at 0.80. Overall, Nifty Bank futures appears weaker than Nifty futures.

• Strategy: Retain the short position recommended last week at 55,400. Revise the stop-loss from 56,750 to 54,800. Exit at 51,850. For fresh trades, wait for a rise to 54,200 and then short the contract with a target of 51,850 and a stop-loss of 54,800.

Broad Trend Summary

• Long unwinding seen in March index futures.
• Rallies fail near key levels.
• Sell-on-rise strategy preferred.

Free fall

By Gurumurthy K

US MARKET OUTLOOK: US benchmark indices are being beaten down badly

The Dow Jones Industrial Average, S&P 500 and the NASDAQ Composite indices continue to get beaten down. All three indices were down for the fourth consecutive week, dropping about 2 per cent each last week. The Dow Jones, down about 6 per cent, has tumbled the most in the last four weeks.

While the US 10Yr Treasury Yield has surged for the third consecutive week, this surprisingly has not aided the dollar index, which fell about a per cent last week. Here is the analysis of how low benchmark indices could fall and the outlook for the dollar:

DOW JONES (45,577.47)

As expected, the Dow Jones fell, breaking below the support at 46,450, clearing the way for a potential fall to 45,000. The region between 45,000 and 44,900 is a strong support zone where the index has good chances to bounce back toward 46,000–46,500. however, a break below 44,900 could lead to further downside at 44,200–44,000. The preference is to see the Dow sustain above 44,900 on its first test to trigger a bounce.

S&P 500 (6,506.48)

Resistance at 6,750 capped the upside last week, and the index fell below 6,600 as expected. The downside is now open to 6,400–6,380, after which a bounce back toward 6,600 is expected. Intermediate support exists around 6,460–6,450; if this holds, a corrective bounce to 6,550–6,600 may occur before the fall to 6,400–6,380.

NASDAQ COMPOSITE (21,647.61)

The index may see a rise to 21,900–22,000, but thereafter it is likely to fall back again. This leg of the decline could drag the NASDAQ Composite down to 20,300–20,000 in the coming weeks.

DOLLAR OUTLOOK

The dollar index (99.50) failed to achieve a strong follow-through rise last week, oscillating around 100. However, the bias remains positive. Strong support in the 99–98.85 region should limit the downside, and a fresh rise from this zone could take the index to 101 in the short term. In the medium term, the index has the potential to breach 101 and rise to 103–104.

TREASURY YIELD

Support at 4.18 per cent held well, and the US 10Yr Treasury Yield (4.38 per cent) touched a low of 4.17 per cent before surging beyond the expected 4.3 per cent level. The outlook remains bullish with strong momentum, and the yield has the potential to target 4.6 per cent.

Failed attempt

By Gurumurthy K

INDEX OUTLOOK: The benchmark indices have room to fall more from here before finding a bottom

Nifty 50, Sensex, and the Nifty Bank index witnessed a very good bounce in the first half last week. However, a sharp fall in HDFC Bank’s share price on Thursday played spoilsport, and benchmark indices gave away all gains to close the week in the red. On the charts, there is room for further decline before a bottom is found, though important supports are approaching.

Market Data and FPI Activity

• Sector Performance: The BSE Oil & Gas index fell the most last week, down 3.3 per cent, while the BSE Telecom index outperformed with a 2 per cent gain.
• FPI Selling: Foreign Portfolio Investors (FPIs) remain on a selling spree, with a net outflow of about $3.84 billion last week and $9.57 billion so far in March.

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NIFTY 50 (23,114.50)

• Short-term View: The outlook remains weak. Intermediate support is around 22,900; a break below this could drag Nifty to 22,300–22,200, followed by an expected bounce. If it sustains above 22,900, it may trade in a range of 22,900–24,000. Surpassing the crucial 24,000 resistance is necessary to ease downward pressure.
• Medium-term View: Support at 22,200–22,000 is crucial. A bounce from there and a rise past 24,000 could target 26,000–26,400. The rally toward 28,000–30,000 depends on sustaining above 22,000 and breaching 26,400.

NIFTY BANK (53,427.05)

• Short-term View: Poised near a crucial support of 53,300, which it is expected to break, potentially leading to a fall to 52,200–52,000. A bounce from 52,000 could take it back to 54,000–56,000.
• Medium-term View: As long as it stays above 52,200–52,000, the broader bullish view remains intact, with the potential to reach 60,000 in coming weeks and 64,000–65,000 in the medium term.

SENSEX (74,532.96)

• Short-term View: Resistance at 77,000 held well, keeping the downside open toward 73,000–72,800. A bounce after this fall could return the index to 76,000–77,000. Decisively crossing 77,000–77,500 is required for a positive outlook.
• Medium-term View: Levels of 72,800 and 72,250 are critical. A strong bounce and rise past 77,500 could target 85,000–86,000.

NIFTY MIDCAP 150 (20,226.90)

• Short-term View: Resistance at 21,000 is holding, but the outlook is mixed. Below 21,000, it remains vulnerable to breaking support at 19,800, which could drag it to 19,200–19,000. A break above 21,000 is needed to revisit 22,800.
• Extended Fall: If it declines below 19,000, a further drop to 18,300–18,000 is possible.

NIFTY SMALLCAP 250 (14,791.95)

The index failed to rise back above 15,000, keeping a potential fall to 14,000 alive. Support at 14,000 is strong; a bounce from there could start a new uptrend toward 22,500–23,000 in the long term. A break below 14,000 would invalidate the bullish view and could lead to 13,000 or lower.

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Key Supports

• Nifty 50: 22,200, 22,000
• Sensex: 72,800, 72,250
• Nifty Bank: 52,200, 52,000

Telcos engage with Mumbai Metro body for network infra along new line

By Vallari Sanzgiri, Mumbai

The Cellular Operators Association of India (COAI) is currently in talks with Mumbai Metro authorities regarding the establishment of network infrastructure along the newly constructed aqua line. Industry sources have confirmed that discussions are underway between the COAI and the Mumbai Metro Railway Ltd (MMRCL) to manage ACES infrastructure following the termination of its third-party contract.

Exploring Options

The metro authority has the option to offer 'right of way' to telecom service providers (TSPs), allowing them to build joint infrastructure with one TSP acting as the lead operator. Based on the commercial feasibility of the existing infrastructure, MMRCL intends to issue a fresh call for a service provider that offers lower charges for the use of space for telecom equipment. Previously, telecommunications companies had expressed concerns regarding the unviable rates offered by MMRCL's selected partner for the use of its network equipment. Consequently, services from Vodafone Idea (Vi) and BSNL, which were previously provided via ACES, have been switched off on the metro line.

A spokesperson for Vi confirmed that their services on the Mumbai metro line are currently impacted due to the termination of the primary contract with ACES. The company stated it remains committed to working with MMRCL to explore options for reinstating services as soon as possible.

Government Engagement

In response to these developments, ACES has reached out to Chief Minister Devendra Fadnavis and the Union Ministry of Communications to request a meeting on the matter. Additionally, Indus Towers has been seeking a "comfort letter" from all telcos to engage with metro authorities for in-building solutions. ACES has advised Indus to adopt a "wait and watch" approach until their discussions with the government conclude.

Despite the current disruptions, telcos remain optimistic about reaching a favorable resolution. This optimism is rooted in prior government orders that recognize metros as "public spaces," where established TSPs are granted preference for providing services.

Airtel ‘mobile connects’ Navi Mumbai airport

Airtel has become fully functional at Navi Mumbai International Airport Ltd, with Jio Infocomm’s network expected to follow shortly.

In-Building Coverage Confirmed Adani Airport CEO Arun Bansal confirmed the commencement of services on Friday via a LinkedIn post, stating, “Finally, fantastic In-building coverage at Navi Mumbai airport by leading Mobile Operator. Thanks Airtel for giving great consumer experience”.

While Airtel is now functional, sources indicate that Jio is currently addressing a few remaining dark spots within the airport building and is expected to operationalise its services soon. Additionally, both telecom giants are preparing to have their in-building solutions (IBS) ready for the inauguration of the Noida International Airport on March 28.

Resolution of Infrastructure Conflicts These developments mark the conclusion of right-of-way (RoW) conflicts at two of India's major airports. Airport authorities had previously argued that they had already installed mobile network infrastructure themselves after multiple discussions with telecom service providers (TSPs).

However, the Department of Telecommunications (DoT) intervened, recognising airports as a “public entity” and directing authorities to allow telcos to set up their own network infrastructure.

Faisal Kawoosa, Chief Analyst and Founder of Techarc, noted that preventing TSPs from installing their own infrastructure would have led to service degradation. He explained that standard WiFi connectivity is insufficient to support the lakhs of users typically present at airport premises. Following the resolution at these airports, telcos are now looking for a similar settlement regarding infrastructure conflicts on Mumbai’s new metro line.

Trump mulls ‘winding down’ war

RISING TENSIONS. Iranian media: Natanz enrichment facility targeted; Israel steps up airstrikes on Hezbollah Reuters Dubai/Washington

President Donald Trump said the US was considering “winding down” its military operation against Iran, as Iran and Israel traded attacks on Saturday and Iranian media reported that the nuclear enrichment facility in Natanz had been attacked. In a social media post, Trump claimed the US was close to meeting its objectives but insisted that other nations should take the lead in policing the Strait of Hormuz, noting that its near-closure threatens a global energy shock.

Mixed Messaging

The Trump administration has sent conflicting signals regarding its goals in the war, which is now entering its fourth week. Within a 24-hour period, Trump suggested the conflict could wind down as the Iranian threat was being eliminated, even while US marines and heavy landing craft were simultaneously heading to the region on an unclear mission. On Truth Social, Trump stated, “We are getting very close to meeting our objectives as we consider winding down our great military efforts in the Middle East with respect to the terrorist regime of Iran”.

Lashes Out at NATO

Trump also accused NATO allies of “cowardice” for their reluctance to help secure the Strait of Hormuz, noting they had not been consulted about the war.

Recent Strikes

As fighting continued, Iranian media reported that US-Israeli forces attacked the Shahid Ahmadi-Roshan Natanz enrichment complex on Saturday morning. While technical experts found no radioactive leak or risk to nearby residents, Israel claimed it was unaware of any such strike. Additionally, Israel attacked Beirut, stating it was targeting the Iran-backed Lebanese militia. This marked the deadliest spillover since Hezbollah began firing on Israel in support of Tehran on March 2.

Valuation Radar: The Good, The Bad, The Ugly

Sector Valuation and Return Table The following data, disseminated by S&P BSE, highlights the performance and valuation of various sector indices as of the reporting date:

Sector Index	P/E	P/BV		Weekly Return (%)	Monthly Return (%)	Annual Return (%)
Nifty 50	20.2	3.1		-0.2	-9.6	-0.3
Sensex	20.5	4.0		0.0	-10.0	-2.4
Auto	31.7	6.0		1.6	-11.4	12.6
Bankex	14.3	2.1		-0.5	-12.5	4.6
Capital Goods	50.8	13.3		-0.4	-3.3	9.9
Consumer Durables	58.0	15.0		-0.5	-7.5	-1.8
FMCG	32.5	7.2		-1.4	-8.8	-9.7
Healthcare	37.5	6.4		-1.1	-1.8	2.0
IT	21.5	5.9		0.3	-9.1	-21.8
Metal	19.8	3.2		1.2	-4.7	20.4
Oil & Gas	8.6	1.5		-3.3	-10.4	5.8
Power	32.6	4.4		0.0	0.6	6.9
PSU	11.4	2.2		-0.8	-7.1	17.2
Realty	34.1	4.4		-1.9	-15.1	-18.4
Teck	25.2	7.5		1.0	-8.3	-13.4

Market Performance Overview During the past week, the Nifty 50 declined by 0.2 per cent, while the Sensex remained flat. BSE Auto was the top performer with a 1.6 per cent gain, followed by BSE Metal (1.2 per cent) and BSE Teck (1 per cent). The steepest weekly declines were seen in BSE Oil & Gas and BSE Realty, which fell by 3.3 per cent and 1.9 per cent respectively.

Guide to Interpreting the Metrics The listings provided aim to help investors sift through companies based on their fundamentals and monitor financial performance across the S&P BSE 500 index.

• CMP (Current Market Price): The closing price on the BSE as of the last traded day.
• EPS (Earnings per Share): Net profit per outstanding share for the last trailing 12 months.
• PE (Price Earnings Ratio): The ratio of market price to EPS; a primary metric for determining if a stock is cheap or expensive.
• PB (Price to Book Value): Stock price relative to net worth, which is particularly relevant for banks and asset-heavy firms.
• Sales and Profit (Qty): Percentage growth in net sales and profits for the latest reporting quarter compared to the previous year, adjusted for one-off items.
• Sales and Profit (TTM): Similar to "Qty" but covering the trailing twelve-month period.
• Wkly Rtn (Weekly Return): Percentage change in stock price over the last week.
• ROCE (Return on Capital Employed): Indicates the returns generated on the capital used by the business.
• DER (Debt Equity Ratio): Total loans divided by shareholder funds, indicating a company's level of indebtedness.
• Yearly High and Low: The price range the stock has occupied over the past year.

The analysis uses consolidated numbers where available to provide a holistic view of finances for the top 500 listed companies, chosen for their liquidity and management quality.

MF redemptions more certain

POLICY-WISE. SEBI formalises short-term borrowing, keeps related costs away from investors By Kumar Shankar Roy

Mutual funds, primarily liquid and overnight schemes, routinely face a timing mismatch between when they pay investors and when they receive cash from underlying instruments. Simply put, mutual funds sometimes have to pay investors before money from their own investments comes in. Redemption proceeds are typically paid out the next business day morning, while inflows from TREPS (Tri-Party Repo Dealing System) and reverse repo often arrive later the same day. To bridge this gap, mutual funds enter into formal same-day borrowing arrangements with financial institutions such as banks.

A March 13 SEBI circular operationalises this practice under new SEBI (Mutual Funds) Regulations, 2026, effective April 1. It sets clear rules for such borrowing, exempts same-day borrowing from the 20 per cent cap, and clarifies who bears the cost and risk.

Timing Gap

Schemes, especially liquid and overnight ones, need a liquidity buffer to manage these timing differences. To prevent delays in payouts, funds borrow for a few hours until receivables are credited later in the day. While such arrangements already exist, the absence of explicit regulatory detailing leaves room for variation in implementation.

Mutual fund schemes can generally borrow up to 20 per cent of assets for redemptions, investor payouts or certain trade settlements, for up to six months. But this cap will not apply to same-day borrowing, subject to SEBI’s conditions.

Usage Rules

The SEBI circular lays down a clear framework for same-day borrowing:

• Approval and Disclosure: The asset management company (AMC) and the mutual fund’s trustees must approve this borrowing policy, and it must be disclosed on the AMC’s website.
• Restricted Purpose: The use of intraday borrowing is restricted to specific purposes: meeting redemption obligations, paying interest or income distribution cum capital withdrawal (IDCW), and related payouts to unit holders. It cannot be used for broader leverage or investment activities.
• Asset-Backed: The fund can borrow only against money that is assured to come in the same day. Eligible receivables include maturity proceeds from TREPS and reverse repo, proceeds from government securities and treasury bills, interest on such securities, and sale proceeds of these instruments.

Cost Burden

A key clarification in the circular relates to who bears the cost of such borrowing. SEBI states that any cost of intraday borrowing must be borne by the AMC and not charged to the scheme. Further, if there is any delay or shortfall in receiving the expected funds due to unforeseen events or settlement issues, the resulting cost or loss must also be absorbed by the AMC. This effectively ring-fences operational cash mismatches, ensuring investors do not bear these operational costs through the scheme.

ETF Clause

The market regulator also addresses borrowing by equity-oriented index funds and ETFs (exchange-traded funds). Stock exchanges will introduce a closing auction session—a final price-setting window at market close—from August 3, 2026. If these funds are unable to complete all their sale transactions during market hours, they may borrow only to participate in this closing auction session.

Newspaper Summary 210326

 The article titled "Welfare Push" (headlined in the full text as "Govt planning expanded worker cover") by Dalip Singh is reproduced below:

Govt planning expanded worker cover

WELFARE PUSH. Labour Ministry examining domestic, international models to draw up social security scheme for gig employees

The Union Labour and Employment Ministry is considering expanding social security with insurance cover to at least 32 crore unorganised, gig and platform workers to fulfil the mandate provided by the four Labour Codes, which are in the final stages of implementation.

The Employees’ State Insurance Corporation (ESIC), under the Labour and Employment Ministry, is going through various domestic and international models in its initial deliberations to arrive at a suitable scheme for expanding social security coverage for the unorganised, gig and platform workers, Ministry sources said.

SUBSIDY MODEL

Broadly, the Ministry is exploring a worker’s voluntary contribution plus government subsidy to move forward in this direction to overcome constrained public resources. Presently, it is voluntary for the unorganised workers. After the proposed scheme is implemented, it will be easy for unorganised workers to onboard because large numbers will reduce the premium for the proposed insurance scheme, Ministry sources said.

“The social security can be tax funded or partly tax funded. But the most important part is how to generate income since the government does not have money to make the scheme completely tax funded,” they said.

The Ministry has roped in the VV Giri National Labour Institute to carry out impact analysis on the four Labour Codes. Director General of the Institute Arvind told businessline: “The survey will begin after three to four months to assess the impact of various aspects of the four codes on workers and employers”.

TAX FUNDED

India has multiple welfare schemes, which operate mostly on a fully tax funded model and a few on contribution basis, but they are fragmented. Key among the central schemes are:

• Pradhan Mantri Suraksha Bima Yojana: An accident insurance (₹2 lakh cover) available to individuals aged between 18 and 70 years, at a very low annual premium of ₹20, auto-debited from individual bank accounts.
• Pradhan Mantri Jeevan Jyoti Bima Yojana: A life insurance scheme providing ₹2 lakh cover against death due to any cause to bank account holders aged between 18 and 50 years, with an annual premium of ₹436.
• Ayushman Bharat Pradhan Mantri Jan Arogya Yojana: A health scheme.
• Pradhan Mantri Shram Yogi Maandhan: An old age pension scheme.

However, there is currently no universal insurance coverage for the unorganised, gig and platform workers.

A BIG CHALLENGE

The Ministry is looking to plug the social security gap, which officials believe is very challenging given its volume and the complex nature of the unorganised sector. As per the e-shram portal, there are 31 crore unorganised registered workers, but the figure goes up to 50 crore according to NITI Aayog. There are also about one crore gig and platform workers.

Since welfare schemes must be provided to workers and their families, the total coverage could reach 128 crore persons (calculating for 32 crore workers with an average family size of four). These workers are mostly spread across 32 cities, including metros and 23 tier-II cities.

Legal Framework:

• Section 109 of the Code on Social Security, 2020: Tasks the Central government with framing schemes for life and disability cover, health and maternity benefits, old age protection, and education for unorganised workers.
• Section 114: Covers gig and platform workers.
• Funding: The Code specifies funding by the Centre, the States, or both, as well as through corporate social responsibility (CSR) programmes.

Several countries provide insurance to informal workers through state-funded, contributory, or hybrid systems, with Thailand being one of the most cited models.

The article titled "Large lenders rein in retail loan GNPAs" by Yashaswani Chauhan is reproduced below:

Large lenders rein in retail loan GNPAs

DATA FOCUS.

The retail loan books of both private and public sector banks increased sharply in the years after the pandemic as banks chased loans from individuals to grow business. Sharp practices adopted by some of these lenders, as highlighted by the RBI, have led to an increase in risk and bad loans.

However, data revealed as a response to an unstarred question in the Lok Sabha show that the largest lenders, such as SBI, HDFC Bank and ICICI Bank, managed to contain the gross non-performing assets (GNPA) in retail loans between April and December 2025. But many private sector banks, led by Axis Bank, continued to register a rise in bad retail loans.

In absolute terms, the State Bank of India reported the highest retail GNPA at ₹11,168 crore as of December 31, 2025. This was, however, almost unchanged from the ₹11,109 crore at the end of March 2025. HDFC Bank, which has the second-largest retail loan GNPA, recorded a decline of 8 per cent in the first three quarters of FY26. ICICI Bank, too, recorded a decline of 11 per cent.

RBI’s regulatory tightening, along with a revival in credit demand from industry, appears to have made larger banks exercise more prudence in retail lending. An increase in interest rates also appears to have decreased demand.

PRIVATE VS PUBLIC

But many private sector banks have reported higher growth in retail GNPAs. Axis Bank witnessed the steepest increase between April and December 2025, rising 23 per cent to ₹7,381 crore. IDBI Bank followed with 21.64 per cent growth. Bandhan Bank, IDFC First and IndusInd Bank were the other private lenders in the top six, recording the highest growth in retail GNPAs. Bank of Baroda was the only public sector lender in the list.

In contrast, public sector banks topped the list of banks recording the highest decline in retail GNPAs. Indian Bank reported the steepest fall, with retail GNPA declining 39 per cent to ₹958 crore. Canara Bank saw a 37 per cent drop to ₹1,451 crore. Bank of India, Punjab National Bank and Union Bank of India posted double-digit declines. Federal Bank was the only private sector lender in this list.

Prof Anil Sood of the Institute for Advanced Studies in Complex Choices (IASCC) noted that PSBs are structurally less exposed. “PSBs are not major players in the retail market; the pressure to grow their retail loan book is limited. It is not surprising that the quality of their retail assets is better than that of the private sector chasing volume for growth,” he said, adding that PSBs had a lower share in credit cards and unsecured personal loans.

Vivek Iyer, Partner and Financial Services Risk Leader, Grant Thornton Bharat, said the divergence among peers reflects the differences in risk appetite. “Customer acquisition strategies are designed based on the demographic profile aligned very closely to the risk profile,” he said.

Experts are of the view that while retail credit growth may be nearing its peak, GNPA levels could rise for a few more quarters before stabilising.

The article titled "Govt’s ₹20,000 cr scheme to ease MFIs’ funds crunch" is reproduced below:

Govt’s ₹20,000 cr scheme to ease MFIs’ funds crunch

Our Bureau Mumbai The scheme comes amid a sharp decline in bank funding to microfinance institutions

The government has rolled out a ₹20,000 crore Credit Guarantee Scheme for Microfinance Institutions 2.0, a move the industry body Microfinance Industry Network (MFIN) said would help revive credit flow to underserved segments and ease funding constraints in the sector.

The scheme comes amid a sharp decline in bank funding to microfinance institutions (MFIs), particularly small players. According to MFIN, bank lending to the sector dropped nearly 70 per cent between the fourth quarter of FY24 and the third quarter of FY26, severely impacting liquidity.

LOAN PRICING

Loans under the scheme will be priced at a capped rate linked to the EBLR or 1-year MCLR plus 2 per cent. In turn, MFIs must lend at least 1 percentage point below their average rate over the past six months. Loans will have a maximum tenure of three years, including a one-year moratorium.

Exposure is capped at 20 per cent of an MFI’s AUM, with absolute limits of ₹100 crore for small, ₹200 crore for medium and ₹300 crore for large MFIs. The scheme also mandates that at least 5 per cent of the loans go to small MFIs and 10 per cent to mid-size players. Credit guarantee cover ranges from 70 per cent for large MFIs to 75 per cent for medium and 80 per cent for small MFIs.

ASSET QUALITY

The launch also coincides with improving asset quality metrics. Portfolio at Risk (PAR) for 31-90 days declined to 1.6 per cent from 3.2 per cent a year ago, indicating better repayment.

However, constrained liquidity has weighed on growth, with the industry’s portfolio standing at ₹3.15 lakh crore as of December 31, 2025, a 7.3 per cent sequential decline. The funding crunch has had a direct impact on borrowers, with MFIN estimating that nearly 50 lakh customers lost access to formal credit due to reduced lending activity.

The article titled "India plans LPG imports from Russia, Japan; shipments to arrive mid-April" by Rishi Ranjan Kala is reproduced below:

India plans LPG imports from Russia, Japan; shipments to arrive mid-April

Rishi Ranjan Kala New Delhi

As the conflict in West Asia intensifies, throttling 60 per cent of India’s consumption, the government is scouting for cargoes of the key cooking fuel from Russia and Japan, while also depending on the US for a major share of the lost cargoes. Besides prioritising domestic liquefied petroleum gas (LPG) consumption over commercial use, sources said that India has also intensified diplomatic efforts to secure cargoes of the critical commodity — the main cooking fuel for more than 33 crore consumers.

TALKS UNDERWAY

“Cargoes are being sought from Russia, which are expected to start from next month. Talks are ongoing. Deliberations are also on to explore LPG from Japan, albeit the quantities will be low. Japan cargoes, if fixed, should reach India by mid-April. At this point, the objective is to arrange as much as possible from wherever possible,” said one of the sources.

On Thursday, Randhir Jaiswal, spokesperson for the Ministry of External Affairs, said India aims to secure LPG from all available sources, including Russia, to meet domestic fuel needs.

LPG MARKET TIGHT

“The silver lining is the ongoing diplomatic dialogue between Iran and India. This engagement helped enable Indian-flagged LPG carriers to transit the region, setting a positive precedent,” said Charles Kim, Associate Director for LPG at S&P Global Commodities at Sea. Continued cooperation could support the passage of additional Indian-linked ships, keeping vital supply routes workable for India and offering some relief to the broader market, he added.

Besides, India is already in talks with the US to procure more propane cargoes. The world’s second-largest importer procured nearly 4,80,000 tonnes of US-origin LPG in the first two months of 2026, corresponding to around 11 very large gas carriers (VLGCs). It has already secured a term tender for 2.2 million tonnes of US-origin LPG for 2026 – equivalent to about four VLGCs per month, said S&P.

SHIFT IN IMPORTS

According to S&P Commodities At Sea (CAS), India’s weekly LPG imports fell to 265,000 tonnes in the week to March 19, from 322,000 tonnes on March 5. West Asian inflows to India declined to just 89,000 tonnes in the week to March 19, representing only 34 per cent of total imports, the lowest share since January.

Alternative regional supplies increased to 176,000 tonnes in the week to March 19, up from zero the previous week when West Asia accounted for 100 per cent of imports, CAS data showed. LPG prices have also risen amid persistent supply disruptions. Platts, part of the S&P Global Energy, assessed FOB AG propane and butane cargoes $9 per tonne higher day over day at $648 per tonne and $642 per tonne, respectively, on March 18.

The article titled "India leads OTT content spend growth in Asia-Pacific" by Vallari Sanzgiri is reproduced below:

India leads OTT content spend growth in Asia-Pacific

Vallari Sanzgiri Mumbai

Indian content platforms are driving spends in the Asia-Pacific (APAC) region, as per data from Ampere Analysis, shared in a Content India Trends report. Offerings such as crime dramas and family content garnered a strong demand, particularly from the Middle East and the US.

Over the last five years, Indian media powerhouses and global streamers have driven the content spend trend, going from 8 per cent of $20.4 billion in 2021 to an estimated 12 per cent of $22 billion in 2026. JioStar, Zee Entertainment and Sony India, commissioned the bulk of titles in 2025, the data showed.

ONLINE POWERHOUSE

JioStar led with around 140 commissioned titles while runner-up Zee commissioned around 80 titles in the year. Sony commissioned around 50 titles. Saudi Arabia, the UAE, Egypt, the US and the Philippines were the top markets for such content, with scripted content dominating globally at 88 per cent.

Hannah Walsh, Principal Analyst, Ampere Analysis, speaking at the Content India Summit 2026, organized by Dish TV, said India had become a global content powerhouse, producing over 24,000 titles in January 2026, with 19,000 available internationally.

Taking a five-year outlook, Daoud Jackson, Senior Analyst, OMDIA, estimated online video in India to nearly double the revenue of traditional TV, becoming the main driver of growth in 2030. Jackson also noted how India produced a quarter of all YouTube videos globally in 2025.

The article titled "Edible oil sector seeks balanced policy" is reproduced below:

Edible oil sector seeks balanced policy

Our Bureau Mangaluru

The Solvent Extractors’ Association of India (SEA) has stated that the vegetable oil and oilseed sector is at a crucial juncture due to global disruptions, weather uncertainties, and domestic fundamentals. In a monthly letter to members, SEA President Sanjeev Asthana emphasized that a balanced approach—combining policy support, market intelligence, and stakeholder collaboration—is essential to navigate the current landscape.

INFLATIONARY PRESSURES

Asthana noted that elevated crude oil prices directly increase the production and transportation costs of edible oils, leading to inflationary pressure in India. Furthermore, volatility in freight and insurance premiums has raised the landed cost of imported edible oils. To maintain price stability, he called for:

• Strict monitoring
• Cautious procurement strategies
• Strong policy support

He added that coordinated efforts across the export-import ecosystem would significantly help ease these burdens.

WEATHER CONCERNS

The sector is also facing significant weather-related risks. Emerging signals now point toward a strong El Niño, potentially a "Super El Niño" phase, shifting away from previous La Niña expectations. While parts of South America may see favorable conditions, there are production risks in Asia.

For India, this development raises serious concerns about below-normal monsoon rainfall, which could adversely affect kharif oilseed sowing, leading to lower acreage and tighter domestic supplies.

Based on the provided excerpts from the March 21, 2026, edition of the Delhi Mint, there are two sections on page 02 that discuss the film Dhurandhar: The Revenge.

Film Review (Main Section)

"One of the biggest films of the year so far returns with its sequel. Before it continues the bloody ascent of Hamza (Ranveer Singh) in the Karachi underworld, Dhurandhar: The Revenge gives us the origin story promised in the final moments of the first film. Yet, the film feels long and a tad too brutal, and misses the electric, swaggering presence of Akshaye Khanna as Lyari gangster Rehman Dakait (whom Hamza killed at the end of part 1). Director Aditya Dhar can fashion hard, serrated action but he loses himself in the invention of new brutalities, writes Uday Bhatia. The violence would be a lot more monotonous if it wasn’t for..."

(Note: The source text for this specific review blurb ends here in the provided document.)

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Summary from "New on Screens"

"With the monster success of the first film, the anticipation for the sequel, in theatres just three months later, is unprecedented in recent Hindi cinema. Aditya Dhar’s Dhurandhar: The Revenge continues the story of Hamza/Jaskirat (Ranveer Singh), an Indian spy who rises to the top of the underworld in Lyari, Karachi. (In theatres)"

Based on the provided sources from page 02 of the March 21, 2026, edition of the Delhi Mint, the coverage regarding cortisol is split into two sections. However, please note that in the source text, the specific header "How to prevent cortisol spikes" is followed by text regarding fashion designer Manish Malhotra, indicating a likely layout mismatch in the original document excerpts.

Here are the relevant sections as they appear:

Raging past the point of exhaustion

An increasing number of people are living in a state of constant activation: poor sleep, non-stop stimulation, emotional overload, late meals, too much caffeine, and almost no real decompression. Such chronic stress keeps cortisol levels elevated, and this in turn can further interfere with sleep, digestion, reproduction and growth-related processes. It makes a person seem like they are high-functioning and this state is often mistaken for ambition or productivity, writes fitness and wellness coach Luke Coutinho. High cortisol is not a problem by itself. The real problem is a body that never gets the signal that it is safe. Coutinho explains

How to prevent cortisol spikes

Designer Manish Malhotra will return to the Lakmé Fashion Week x FDCI runway this weekend after a break of several years, and he plans to debut his prêt collection as well as his accessory line. While couture will always remain the foundation of the brand, he says that the demand for the craftsmanship, attention to detail and sense of glamour of luxury fashion has extended to ready-to-wear as well. Prêt also gives designers a chance to work with lighter silhouettes and challenges them to think about designing clothes for comfort. Manish Mishra speaks to the designer about his upcoming prêt collection, the role of

Based on page 12 of the March 21, 2026, edition of the Delhi Mint, here is the reproduced book review by Somak Ghoshal:

Love and revenge in the time of the coronavirus

Ashok Ferrey’s latest novel, Hot Butter Cuttlefish, is set in the fictional lakeside village of Kalabola in Sri Lanka during the covid-19 years. The protagonist, Malik, is a recently divorced personal trainer who has relocated to this sleepy outpost, leaving behind his life in the city of Colpetty in the hope of some peace and quiet. But new adventures find him in exile as he becomes inadvertently involved in the lives of the local aristocrat fallen on hard times, 58-year-old Arthur, and his prospective bride, a 23-year-old woman called Chanchala, who has her heart fixed on the estate owned by her betrothed’s family.

The narrative intersperses Malik’s first-person narrative with a third-person omniscient voice, heightening the unreliability of his characters. As soon as the reader begins to trust their intentions, they start acting in ways that raise suspicions about their motives. Is Chanchala, the nubile beauty, solely drawn to Arthur (referred to as the “suddha”, or brown sahib, by the locals) for his inheritance?. Or is there a flicker of affection in her scheming heart?. For that matter, is Malik keen to intervene in this odd pair’s lives out of goodwill or self-interest?. Can the personal trainer who ends up acting as a proxy therapist to his clients keep himself out of trouble?.

As with all his novels—The Ceaseless Chatter of Demons (2016) being a personal favourite—Ferrey is effortlessly funny in Hot Butter Cuttlefish, even when he is dealing with subjects that are decidedly not amusing. Humour, as he told poet and writer Tishani Doshi in an interview in The Hindu in 2019, is a by-product of his writing. His stories dive deep into the Sri Lankan mindset, or what passes for it—the stoic passivity with which ordinary people react to misfortunes, authoritarian politicians, and other turbulences in their lives.

Kamala’s brute strength of mind and body, as well as her dithering between loathing and loyalty for Arthur, complicate the plot, especially during the topsy-turvy ethos of the covid era. Their domestic squabbles take on violent turns, as Kamala’s visceral hatred for Chanchala, whom she calls “vaisey” (or loose woman), reaches a fever pitch. As the pandemic spreads, people begin to die like flies. But even as Kamala is afflicted by the disease, she manages to recover with great aplomb and is promptly turned into a mascot for a miracle cure peddled by her cousin Biju, an unscrupulous minister. Just as Arthur had once rejected Kamala, she too had turned down Biju’s offer of marriage in the past.

Years later, as the three meet under changed circumstances, she appears as a raging saviour, threatening to expose Biju's frauds as he attempts to buy the estate below market rate. “Some atavistic memory of a feudalism long gone, some little whiff of primeval fear, rose up in his throat,” Ferrey writes, as Kamala confronts Biju, who beats a retreat, despite his political influence. If this isn’t true love, what is?. Or is it perhaps the long-awaited revenge of the underdog?.

It is a cleverly plotted novel, nimble-footed in its unfolding, acerbic and entertaining as a social satire. Ferrey is especially sharp in his critique of the colonial hangover that looms large over the psyche of his people. If the pace does sag in the middle, the gossipy, small-town energy never allows the story to become boring. Partly standing in for the author, Malik is a slippery character, hard to fathom. His monologues are endearing to begin with but get repetitive.

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Hot Butter Cuttlefish: By Ashok Ferrey, Penguin Random House India, 240 pages, ₹499.

Based on page 08 of the March 21, 2026, edition of the Delhi Mint, here is the article Prague’s metamorphosis as it appears in the sources:

Prague’s metamorphosis

In hindsight, 18 is probably not the age to read Franz Kafka’s The Metamorphosis. I stumbled upon the book by accident, raced through its 80-odd pages and was shell-shocked for a few days. For someone who’d grown up on a strict but voracious diet of Agatha Christie, Arthur Conan Doyle and Erle Stanley Gardner, I did not comprehend much of it, but the dark helplessness of a man suddenly finding himself turned into an insect on waking up one morning wasn’t lost.

When I finally got a chance to visit Prague 20 years later, I found Kafka everywhere, as statues, sculptures and souvenirs. Ironically, in his work, Prague lives only by allusion, never overtly. It is a theme that is explored in considerable detail at the Franz Kafka Museum in Mala Strana, which is dimly lit by design to reflect the author’s penchant for gloom. Yet, the city itself is full of life and joy.

The brooding Prague Castle, labyrinthine streets, towering spires and stone facades of ancient buildings are interpreted as claustrophobic and...

(Note: The text for this article ends abruptly in the provided source material as the next column begins.)

Based on page 17 of the March 21, 2026, edition of the Delhi Mint, here is the article Centre invites bidders to set up rare earth magnet plants by Manas Pimpalkhare:

Centre invites bidders to set up rare earth magnet plants

₹7,250 crore incentive scheme for five plants aims to secure supply chain, build local capacity

The Centre on Friday launched a ₹7,280-crore incentive programme, inviting bidders to build five rare-earth magnet plants to secure its critical mineral supply chain. The scheme aims to build local capacity for a crucial component used in sectors such as defence, electronics, renewable energy, and automobiles.

Prospective applicants can submit their bids to establish integrated sintered neodymium-iron-boron (NdFeB) magnet manufacturing facilities in India and can be eligible for availing capital subsidy as well as sales-linked incentives under the government’s rare earth permanent magnet (REPM) scheme, the ministry said in a statement. The scheme provides a capital subsidy of ₹750 crore for setting up five processing units and a sales-linked incentive of ₹6,450 crore for all beneficiaries upon commencement of production.

The scheme received the Cabinet’s assent on 26 November, and official guidelines were notified on 15 December. The raw material required—rare earth oxides—will be supplied to the three lowest bidders by the only rare earth miner in the country, state-run India Rare Earths Ltd (IREL). The seven-year scheme targets an annual capacity of 6,000 tonnes, providing two years for construction followed by five years of sales-linked incentives.

The scheme was created in response to the global supply chain disruption caused by China's halt to exports of rare-earth magnets in April last year, amid an intense tariff war between Beijing and Washington, DC. China accounts for about 60% of the world's rare earth mining and 90% of processing capacity.

Despite its mining and refining strengths, India lacks midstream capacity to produce rare-earth magnets, leaving manufacturers entirely dependent on imports. A pre-bid meeting will be held on 7 April, following which interested parties can bid for magnet-making capacity in the range of 600-1,200 tonnes, according to the global tender floated by the project management agency, Industrial Finance Corp. of India (IFCI). Technical bids will be opened on 29 May. Bidders will have to pay ₹4.5 lakh as the tender fee and ₹1 crore as earnest money deposit.

Based on the March 21, 2026, edition of the Delhi Mint, here is the article Conflict throws up rare winner in Great Eastern Shipping (initially titled "War throws up rare winner in Great Eastern Shipping" on page 18) by Nehal Chaliawala:

Conflict throws up rare winner in Great Eastern Shipping

As war roils the Persian Gulf and the global economy feels its shockwaves, just across the Arabian Sea in Mumbai sits Great Eastern Shipping Co. Ltd, one of the few winners of a conflict that nobody but a few wanted.

India's largest private ship-owner, with a fleet of 40 vessels, is benefiting as global ship chartering rates surge amid the war entering its fourth week on Saturday. The Baltic Dirty Tanker Index (BDTI) and the Baltic Clean Tanker Index (BCTI), which track the prices of unrefined crude and refined oil product tankers, respectively, have doubled from their 12-month averages, according to data.

GE Shipping is the operator of Jag Laadki, which was only the fourth vessel to cross the Strait of Hormuz since Iran blockaded the strategic passage two weeks ago. Carrying around 81,000 tonnes of crude oil, the vessel reached the Mundra port on Wednesday. Jag Prakash, another GE Shipping vessel, has also managed to cross the strait, as per reports.

The company’s shares have gained more than 27% since the beginning of 2026, compared to a 12% correction in the Sensex over the same period. Experts said that, unlike smaller Indian shipping companies that focus on logistics between Indian ports, most of GE Shipping’s fleet transits on international routes, giving it the full advantage of the elevated global freight rates. The company owns five crude carriers, 16 refined petroleum product tankers, five liquefied petroleum gas (LPG) vessels, and 14 dry bulk carriers that move materials such as iron ore and coal.

Notably, the company has gradually increased its exposure to the spot market over the past 12 months, enabling it to fully capitalise on market volatility. Per-day freight rates in the spot market, where vessels are chartered for a voyage, are nearly twice as much as those for one-year leases.

A year ago, GE Shipping had about a fifth of its crude and product tankers and about 30-40% of its dry bulk carriers on time charter. Presently, the entirety of its crude fleet is on the spot market, and the share of dry bulk carriers on the spot market has gone up to 80-85%.

“Typically, on the shipping segments, we have about between 15% and 20% of the capacity on time charter... In crude, we are 100% on spot currently,” G. Shivakumar, executive director and chief financial officer at GE Shipping, said on an investor call. All five of the company’s LPG carriers remain on time charter, he added.

“Companies like GE Shipping are very substantially exposed to global shipping markets. Currently, exposure to the spot market would greatly help them because rates have skyrocketed,” said Amit Oza, director at Astramar Shipping & Trading Services. Large shipping companies like GE Shipping have strong research teams that analyze market conditions and geopolitical scenarios to advise their chartering teams on how much exposure to maintain in the spot market.

GE Shipping reported consolidated revenue of ₹1,737 crore during the quarter ended 31 December, up 16% year-on-year. Profit was up by over a third to ₹813 crore. The consolidated financials include income from subsidiary Greatship (India) Ltd, which is a major player in offshore oilfield services. The company had gross debt of ₹1,049 crore as of 31 December and was net cash-positive at ₹7,277 crore.

Based on the Media Marketing Initiative on page 13 of the March 21, 2026, edition of the Delhi Mint, here is the article REC Showcases ‘Green Multiplier’ Pavilion at BES 2026:

REC Showcases ‘Green Multiplier’ Pavilion at BES 2026

The REC Limited Pavilion was inaugurated at the summit by Union Ministers Manohar Lal, Pralhad Joshi and Shripad Naik, in the presence of senior officials including Power Secretary Pankaj Agarwal and REC CMD Jitendra Srivastava. Designed as a contemporary, technology-driven space, the pavilion highlights the theme “Financing India’s Energy Abundance”.

At its core is the concept of the “Green Multiplier,” reflecting REC’s role in accelerating sustainable development by expanding access, opportunity and clean energy adoption. Through its immersive design and vibrant visual identity, the pavilion captures the spirit of India’s energy transition, symbolising growth, resilience and a shift towards a low-carbon future. It underscores REC’s commitment to enabling a greener, more inclusive energy ecosystem aligned with the nation’s long-term sustainability goals.

Newspaper Summary 200326

 

Sensex, Nifty crash 3.26% in biggest fall since June 2024

BIG SHOCK. Crude above $110 & hawkish US Fed hurt sentiment; HDFC Bank leads fall Anupama Ghosh — Mumbai

In their worst single-day fall since June 2024, the BSE Sensex and the Nifty50 crashed 3.3 per cent on Thursday, weighed down by a sharp sell-off in HDFC Bank, a spike in crude prices, and the hawkish stance of the US Federal Reserve. The Sensex fell nearly 2,500 points and the Nifty tumbled over 775 points, with Shriram Finance, Eternal, and HDFC Bank leading the losses.

INDIA VIX SURGES

The volatility indicator, India VIX, surged over 21 per cent to 22.80. The sell-off, triggered by the escalating West Asia conflict that sent Brent crude surging past $110 per barrel, wiped out the gains of the past three sessions in a single day. The US Federal Reserve’s decision to hold benchmark rates steady at 3.50-3.75 per cent, while signalling a higher inflation outlook due to rising energy prices, compounded the negative sentiment.

“... The near-term outlook remains strongly bearish, and any pullback towards resistance levels is likely to be sold into unless sentiment improves materially,” said Hitesh Tailor, Technical Research Analyst at Choice Equity Broking. The Nifty opened with a gap-down of 580 points and slid further to close near a one-year low. Bank Nifty fell 3.4 per cent, and all sectoral indices closed in the red, with auto, realty, financial services, and private bank indices among the worst losers.

DII buying provided only a partial cushion. Against FPI selling of ₹7,207 crore, DIIs bought shares worth ₹3,410 crore on Thursday. Downstream oil refiners, paint companies, tyre manufacturers, and aviation stocks bore additional pain from margin-compression fears. The Nifty Midcap 100 fell 3.19 per cent and the Nifty Smallcap 100 dropped 2.94 per cent. Globally, Asian markets closed sharply lower, falling between 1 and 3.5 per cent, while equities across Europe were down in the range of 1-4 per cent.

BULLION TUMBLES

Contrary to expectations, safe-haven assets offered no refuge. Gold fell over 3.4 per cent on the Comex, breaching $4,700/oz, while silver dropped nearly 6 per cent as the Fed’s hawkish posture strengthened the dollar. Analysts stated that a clear de-escalation in West Asia is the only near-term catalyst that can arrest the downtrend, failing which the index remains biased towards further weakness.

‘Iranian attack wipes out 17% of Qatar’s LNG capacity for up to five years’

Reuters — Dubai / Doha

Iranian attacks have knocked out 17 per cent of Qatar’s LNG export capacity, causing an estimated $20 billion in lost annual revenue and threatening supplies to Europe and Asia, said QatarEnergy’s CEO.

Saad Al-Kaabi said two of Qatar’s 14 LNG trains and one of its two gas-to-liquids (GTL) facilities were damaged in the strikes. The repairs will sideline 12.8 million tonnes per year of LNG for three to five years, he said. “I never in my wildest dreams would have thought that Qatar and the region would be in such an attack, especially from a brotherly Muslim country,” said Kaabi.

Hours earlier, Iran aimed a series of attacks at Gulf oil and gas facilities after Israeli attacks on its own gas infrastructure. State-owned QatarEnergy will have to declare force majeure on long-term contracts for up to five years for LNG supplies bound for Italy, Belgium, South Korea and China due to the two damaged trains, said Kaabi.

Exit rattles mutual fund investors, concerns loom

Suresh P Iyengar — Mumbai

The top 10 fund houses have invested about ₹90,000 crore in the shares of the bank

The sudden exit of Atanu Chakraborty as Part-time Chairman of HDFC Bank has not only wiped out ₹1 lakh crore in market-cap of the bank but also sent chills across the mutual fund industry, with top fund houses having significant exposure to the stock. The top 10 mutual fund houses alone have invested about ₹90,000 crore in the shares of the country’s second largest bank.

The stock has already fallen 9 per cent so far in this month, touching a new low of ₹772 before closing at ₹800 on Thursday. The stock has seen a 15 per cent decline year-to-date. Among MF schemes, most of the Nifty Bank Index Funds and ETFs have exposure of 19.83 per cent to 19.70 per cent in HDFC Bank.

Global financial services firm Macquarie stated that while fundamentals remain strong with healthy return on assets, investor sentiment will stay pressured until the board offers greater clarity. The brokerage also warned that uncertainty around CEO Sashidhar Jagdishan’s reappointment could further weigh on the stock.

Gibin John, Senior Investment Strategist, Geojit Investments, said about 127 schemes had an exposure of over 5 per cent to the stock and any price movement in HDFC Bank will be reflected in the NAVs of these schemes. While short-term investors with high equity allocation could consider booking profit, he added that investors with a five-year horizon could stay invested.

Anuj Badjate, Managing Director, Badjate Stock & Shares, said shares of HDFC Bank had already corrected 20–25 per cent from ₹1,000 to ₹800 levels, suggesting that a significant portion of the current concerns had been reflected in valuations.

STABLE ASSET QUALITY

HDFC Bank continues to be one of the most institutionally owned and closely tracked franchises, with a historically stable asset quality profile and disciplined underwriting track record. At this stage, the development appears to be a sentiment and valuation adjustment, rather than a reflection of balance sheet stress, he added.

Earlier in the day, the Reserve Bank of India stepped in to assuage concerns and described HDFC Bank as a “domestic systemically important bank” with strong financials. The RBI said, based on its periodical assessment, there were no material concerns on record as regards to its conduct or governance.

Ravi Singh, Chief Research Officer, Master Capital Services, said while the fundamental attributes of the bank had not changed overnight, the comments from a senior official hold importance and introduce a degree of corporate governance scrutiny. Though investors holding banking sector funds or thematic financial services funds could see volatility in the NAV given the concentrated exposure, diversified funds will have a natural cushion against the blow, he added.

Market correction opens tremendous opportunity for FPIs: SEBI Member

ON THE CHART. Regulator eyes smoother access for Russian investors; pitches India listings, Gift City route Our Bureau — Mumbai

Recent corrections in Indian equities amid geopolitical tensions have made valuations “quite attractive,” creating a “tremendous opportunity” for foreign portfolio investors (FPIs) to increase allocations, said Kamlesh Chandra Varshney, Whole-Time Member, Securities and Exchange Board of India (SEBI). “There is a tremendous opportunity to invest in Indian equity markets with the kind of correction which has taken place in the last few months, particularly after the war broke out,” Varshney said at a Russia-India forum on capital market integration at the NSE.

His comments come even as FPIs have remained net sellers so far in FY26, with over ₹77,000 crore of outflows reported in the first half of March amid global volatility linked to the West Asia conflict. Varshney said the regulator would ease procedural and technical bottlenecks for Russian investors and may consider setting up dedicated working groups to address specific requirements. He also encouraged Russian companies to tap Indian markets through local listings, noting that some subsidiaries' valuations in India exceed those of their parent companies overseas. At present, 23 Russian entities are registered as FPIs in India.

INDIA’S OFFERINGS

Ashishkumar Chauhan, MD and CEO, NSE, said India offers a broader proposition for global issuers, particularly for Russians, providing access to capital and stronger valuation outcomes. He added that India’s capital markets are becoming an increasingly important channel for long-term international economic engagement.

At the same event, Sergey Glazyev, State Secretary of the Union State of Russia and Belarus, called for a “new financial architecture” based on national currency and international trust. Sriram Krishnan, Chief Business Development Officer, NSE, suggested that Russian firms explore fundraising through Gift City, Gujarat, and consider establishing a banking presence in the hub. Separately, Varshney noted that SEBI is working on technology-led solutions to ease access and reduce business costs.

Sarkozy’s indictment, and lessons for India

FURTHERING PROBITY. France has tough laws on campaign finance. In India, the proposed 130th Constitution Amendment Bill could bolster governance, holding those at the helm to account ROHINI RANGACHARI KARNIK

La loi, dans son majestueux égalité, interdit aux riches comme aux pauvres de coucher sous les ponts, de mendier dans les rues et de voler du pain [The law, in its majestic equality, forbids the rich and the poor alike to sleep under bridges, to beg in the streets, and to steal bread] — Anatole France in Le Lys Rouge (The Red Lily, 1894)

On March 16, France’s ex-President Nicolas Sarkozy went on trial on appeal over allegations that he accepted €50 million from Libyan dictator Muammar Gaddafi to fund his 2007 campaign. In 2025, he became the first political Head of State in modern French history to serve prison time. The only similarity dates back two centuries when King Louis XVI faced imprisonment, as other modern leaders like Jacques Chirac avoided actual jail time.

In 2013, France created the Haute Autorité pour la transparence de la vie publique (High Authority for the transparency of public life) to prevent conflicts of interest and inspect changes to the net assets of public servants. Sarkozy, who served as President from 2007 to 2012, was convicted of criminal conspiracy for accepting Libyan funding in exchange for boosting Libya’s global image. In September 2025, a Paris court sentenced him to five years in prison, a €100,000 fine, and five-year bans from public office.

STRICT OVERSIGHT

Under French law, campaign finance is strictly regulated, with donations and expenditures subject to strict caps and mandatory audits. The French Electoral Code (L.52-8) explicitly bars foreign states or legal entities from providing donations to political candidates. Sarkozy’s conviction has fueled debates on judicial independence, with some viewing it as a rule-of-law victory and others claiming it is politically driven. The ruling underscores the judiciary’s rising assertiveness against former leaders to ensure political decision-making is conducted in the public interest.

Indians recall Sarkozy as the Republic Day chief guest in 2008 and for his 2010 tour that advanced ties regarding Jaitapur nuclear power and Rafale jets. Unlike France, no Indian post-independence Prime Minister or President has been sentenced for such a long duration. While Indira Gandhi was briefly imprisoned after the Emergency and others like PV Narasimha Rao faced convictions without jail time, the Supreme Court and CBI have cleared others like Manmohan Singh in high-profile cases.

CMS IN JAIL

Conversely, several Indian Chief Ministers have been imprisoned on charges of corruption and money laundering. Arvind Kejriwal made history as the first sitting Chief Minister arrested in 2024. In Bihar, Lalu Prasad Yadav’s jailing ended the "Jungle Raj" era, leading to reforms under Nitish Kumar, though such imprisonments also often lead to political instability,.

India’s Constitution allows for branch overlaps and provides Prime Ministers and Presidents with indirect safeguards or complete immunity during their tenure. The Electoral Bond Scheme of 2018, intended to be a transparent funding method, was struck down by the Supreme Court in 2024 for violating the voters’ right to information. Currently, India still lacks a transparent method for accounting for campaign finance.

To bolster governance, the ongoing Constitution (130th Amendment) Bill 2025 seeks the removal of a Minister if they are accused of an offence punishable with five or more years of imprisonment and have been detained for 30 consecutive days. It also calls for the resignation of the Prime Minister or a Chief Minister after 30 days of detention. While under debate, this bill could strengthen public administration through constitutional morality and judicial prudence.

The writer teaches French at the Alliance française de Delhi

Investors turn to tax-loss harvesting

WORD OF CAUTION. Only genuine losses on paper qualify, regulatory or holding-period risks remain: Experts Shishir Sinha — New Delhi

Heightened market volatility and a late-March push to optimise tax outgo are prompting a growing number of equity investors to adopt tax-loss harvesting, a strategy that involves realising losses to offset gains and reduce tax liability, according to tax practitioners and wealth advisers.

HEDGE STRATEGY

Amid heightened market volatility and as the financial year nears to a close, equity investors are adopting tax-loss harvesting to offset gains and reduce tax liability. A Delhi-based entrepreneur, who asked not to be identified, said he rebalanced his portfolio after several holdings breached key price levels. He booked losses of about ₹1.2 lakh against short-term capital gains of ₹2 lakh in the current financial year, reducing his taxable gains to roughly ₹80,000. At prevailing short-term capital gains (STCG) rates, that translated into a significantly lower tax outgo.

“As prices of some of my stocks broke two support levels, I sold them at a loss of around ₹1.2 lakh. My short-term gain is effectively now ₹80,000. If I had to pay STCG tax on ₹2 lakh, my liability would have been ₹40,000, but I have paid only ₹16,000 (surcharge and cess not included). The adjustment is within the law,” he said.

GROWING TREND

Advisers said that such transactions are becoming more common as markets correct and investors reassess portfolios. “Tax-loss harvesting involves selling investments that are in a loss to reduce tax liability. This can be useful in planning strategy, particularly in the current market environment and at year-end,” said Hardik Mehta, Lead-Tax at Ionic Wealth. He added that the benefit is contingent on filing income tax returns within the deadline.

Under tax rules, short-term capital losses can be set off against both short- and long-term gains, while long-term losses can be adjusted only against long-term gains. Unabsorbed losses may be carried forward for up to eight assessment years, subject to timely filing.

TAX RULES

Some advisers view the current correction as creating a window to convert unrealised losses into tax assets. “The market environment presents an opportunity for investors to review portfolios and crystallise losses for tax efficiency,” said Rahul Jain, Partner at Khaitan & Co. He cautioned that only realised losses, not notional ones, qualify.

REGULATORY SCRUTINY

Practitioners, however, warn against treating the strategy as mechanical. “Factors such as overall portfolio strategy, impact of the FIFO method, and the possibility of scrutiny in cases of immediate repurchase of similar securities should be carefully evaluated,” said Amit Maheshwari, Managing Partner, AKM Global.

Priyanka Duggal, Partner at Grant Thornton Bharat, noted that selling and re-entering positions could convert what would have been long-term capital gains, taxed at lower rates, into short-term gains taxed at higher rates.

Advisers also flag anti-avoidance provisions. According to Duggal, the General Anti-Avoidance Rules (GAAR) may apply if transactions are deemed to lack commercial substance or are undertaken solely to evade tax. “Assessees must ensure transactions are backed by genuine commercial intent and not structured to create artificial losses,” said Rajat Mohan, Senior Partner at AMRG & Associates. He added that near-simultaneous buybacks of identical securities and inadequate documentation could invite scrutiny.

West Asia war to impact India’s direct investments in the UAE

DATA FOCUS. Sindhu Hariharan — Chennai

At a time when the ongoing political tensions in West Asia are casting a shadow of doubt on the investment potential of the GCC nations, data show that around 7 per cent of India’s monthly overseas direct investments (ODI) go to the United Arab Emirates. RBI data show that a total of $1.2 billion was invested in the UAE as outbound direct equity investment in FY26 (April-February), making up around 7 per cent of the total ODI in the 11-month period.

The investments are largely by small- and mid-size companies typically in the areas of logistics and warehousing, manufacturing, retail/trade, restaurants and hotels. In contrast, other GCC countries attract lesser ODI from India. On a monthly basis, the equity investments into the UAE are sporadic and do not follow a linear growth pattern. In December, for instance, Reliance Industries’ $350 million investment in West Asia subsidiary Reliance Industries DMCC led to a spike in overall ODI tally in the month.

Similarly, MakemyTrip and TVS Motor were among companies that made large ODI commitments into the UAE in May 2025. In February 2026, for instance, Neo Star Infraprojects, One Point One Solutions, Power Build, Sai Krish Healthcare Services, Thriveni Earthmovers and Infra, and Trejhara Solutions are among the companies with the highest equity ODI in the UAE. Similarly, Asian Paints, Bhima Jewels, Clean Max Enviro Energy Solutions, and Concord Enviro Systems made ODI in January, as per RBI data.

From April 2023 to August 2025, a cumulative $5 billion has been invested in the UAE by Indian companies as ODI (equity + loan + guarantee), which represents 10 per cent of the total ODI in this period, as per data from the Department of Economic Affairs. In the last two decades (April 2000 to August 2025), the ODI outflow from India to the UAE stands at $18.3 billion, making up 5 per cent of the total ODI.

EQUITY INVESTMENT

ODI refers to investments made by Indian entities/residents in foreign companies or their own foreign subsidiaries. Governed by the RBI, ODI can take various forms, such as equity investment in a foreign entity (joint ventures or wholly owned subsidiaries) or loans or guarantees extended to foreign affiliates.

Overall, India’s ODI in equity for FY26 (April-February) was $18.1 billion, a 28.7 per cent rise from the same period last year. Even as the ODI saw a rise in FY26, it has been tapering down in recent months due to increased macro uncertainty. In January 2026, ODI (equity) was down 13.6 per cent year-on-year at $1.5 billion, and in February it was $1.1 billion, again a 57.5 per cent drop y-o-y. Among the top ODIs in February were Tata Steel’s $625 million in wholly-owned subsidiary T Steel Holdings, Neo Star Infraprojects’ $27.7 million in its UAE subsidiary, and ONGC Videsh’s $52.8 million in its Mozambique JV.

‘World goods trade may slow to 1.9% due to Gulf crisis’

Amiti Sen — New Delhi

World trade in goods is projected to slow to 1.4-1.9 per cent in 2026 from 4.6 per cent in 2025. This decline is attributed to risks from the continued conflict in West Asia, coupled with a normalisation in the surge of AI-related products and tariff-driven front-loading of shipments, according to the WTO’s latest trade forecast. In 2027, world merchandise trade volume is projected to grow by 2.6 per cent.

The forecast noted that beyond fuels, the Strait of Hormuz blockade has disrupted fertilizer supplies critical to global agriculture. Around one-third of the world’s fertilizer exports normally pass through this waterway.

UREA IMPORTS

“Major agriculture producers like India, Thailand and Brazil depend on the Gulf for 40 per cent, 70 per cent and 35 per cent of their urea imports respectively. Gulf states face a food security challenge as well, with import dependency averaging 75 per cent for rice and exceeding 90 per cent for corn, soybeans and vegetable oil — commodities that would face higher costs through alternative routes,” the report stated.

Excluding energy price shocks, global merchandise trade growth would slow to 1.9 per cent in 2026 due to normalisation following the surge in AI-related products and front-loading of imports to avoid new tariffs in 2025.

ENERGY IMPORTS

“However, a scenario where both crude oil and LNG prices remain elevated throughout 2026 would shave 0.3 percentage points off the GDP forecast for 2026; this would in turn slash 0.5 percentage points off the trade forecast for this year and up to one percentage point for regions dependent on energy imports. This would mean merchandise trade volumes would grow by just 1.4 per cent,” the report added.

POSSIBLE LIFELINES

On the brighter side, WTO economists noted that if the conflict is short-lived and AI-related spending remains strong throughout 2026 and into 2027, merchandise trade growth could be boosted by 0.5 percentage points. This could lead to growth as high as 2.4 per cent this year and 2.7 per cent next year.

WTO Director General Ngozi Okonjo-Iweala stated that the outlook reflects the resilience of global trade, buoyed by high technology products, digitally delivered services, and supply chain adaptations.

“However, this baseline forecast is under pressure from the conflict in West Asia. Sustained increases in energy prices could increase risks for global trade, with potential spillovers for food security and cost pressures on consumers and businesses. Nevertheless, WTO members can help cushion the impact... by maintaining predictable trade policies and strengthening supply chain resilience,” she said.