Financial Sector and Corporate Activity - Newspaper Summary

 The sources detail significant activity within India's financial sector and corporate landscape in October 2025, marked by major merger and acquisition (M&A) discussions, primary market activity (IPOs), tight liquidity conditions in banking, and strategic pivots by large technology firms, all occurring against a backdrop of complex global trade and geopolitical maneuvers.

Financial Sector: Banking, Credit, and Markets

1. M&A Activity and Foreign Interest in Indian Banking

A key development is the burgeoning interest from multinational financial firms in acquiring stakes in Indian banks.

• Emirates NBD and RBL Bank: Dubai's Emirates NBD Bank PJSC is in talks to acquire a controlling stake in RBL Bank Ltd for over $1 billion. The proposed structure involves acquiring around a 26% stake from institutional investors, followed by an open offer for another 25%, potentially leading the Dubai government entity to hold about 51% of the domestic lender.
• Regulatory Constraints: The Reserve Bank of India (RBI), if it approves the deal, is likely to cap the voting rights of the Dubai entity at 26% due to regulatory requirements. RBI circulars state that no bank shareholder can exercise voting rights above 26%. Foreign Direct Investment (FDI) policy allows foreign banks up to 74% ownership, and the RBI may permit higher shareholding on a case-to-case basis.
• Wider Trend: This discussion highlights the growing fascination multinational financial firms have with India. Japan's Sumitomo Mitsui Banking Corp. (SMBC) recently acquired a 20% stake in Yes Bank and has an agreement to acquire an additional 4.2%, bringing its total stake to 24.2%. Discussions between Emirates NBD and RBL Bank accelerated after the Yes Bank-SMBC deal.
• RBL Bank Profile: RBL Bank, which has no promoter and is fully owned by public shareholders, had deposits of ₹1.16 trillion (up 8% year-on-year) and total loans of ₹1.02 trillion (up 14% year-on-year) as of early October.

2. Liquidity and Credit Pressure

Provisional banking data for Q2 (July–September) signals increasing liquidity pressure in the system.

• Deposits Lag Loans: Loan growth once again outpaced deposit growth for most Indian banks, reversing the balanced trend seen in Q1.
• Credit-Deposit (CD) Ratio: The system-wide CD ratio rose to 80.3%, crossing the 80% mark for the first time in six months. This widening gap suggests potential funding challenges for banks and tight liquidity, although it could benefit depositors as banks may raise deposit rates to attract funds.
• High Growth Banks: Private sector banks led credit expansion in Q2, with advances growing 11–16% year-on-year. Kotak Mahindra Bank (15.8% loan growth) and Bank of Maharashtra (16.9% loan growth) were the fastest growing, while HDFC Bank consciously grew loans slower than deposits to improve its CD ratio.
• Delinquency Concerns: Despite a slowdown in the growth of unsecured consumer loans following RBI regulatory action in late 2023, risks linger. Delinquencies (loans overdue by 90 days or more) have ticked up for credit cards (2.1%) and two-wheeler loans (1.9%) as of June 2025. The total growth in credit card balance outstanding slowed sharply to about 4% year-on-year as of August 22, down from approximately 20% a year earlier.

3. Capital Market Activity (IPOs and Listings)

The IPO market in India remains buoyant, with several new listings and offerings.

• Tata Capital Muted Debut: Shares of NBFC Tata Capital Ltd made a muted market debut, ending slightly over 1% higher against the issue price of ₹326. The company's ₹15,512 crore share sale received 1.95 times subscription and was the largest IPO of the year.
• Canara Robeco IPO Subscribed: Asset manager Canara Robeco’s nearly $150 million IPO was fully subscribed on the final day, driven by strong interest from Qualified Institutional Buyers (QIBs), who bid for four times their allotted portion.
• Upcoming Fintech IPO: Fintech firm Pine Labs is preparing for a public listing, targeting a $700 million IPO launch in the second week of November. The company, which was last valued at about $5 billion in early 2022, is seeking a valuation of around $6 billion in the IPO. Pine Labs reported a net profit of ₹26 crore in the first nine months of FY25, marking a sharp turnaround from a ₹151.6 crore loss the previous year.
• GIFT City Listing Plan: US-based AI-driven company Tryfacta Inc. is planning to file draft papers for an IPO on the GIFT City international exchange to raise $100–150 million.

Corporate Activity and Sectoral Dynamics

1. Technology and AI Pivot

Major Indian and global technology firms are making significant strategic moves centered on Artificial Intelligence (AI).

• HCLTech's Strong Q2 and AI Revenue: HCL Technologies Ltd reported its strongest second-quarter performance in five years (July-September 2025). The company reported a 2.8% sequential revenue growth and saw its net profit jump 8% sequentially. Notably, HCLTech was the first of India's Big Five IT firms to spell out revenue from AI, reporting $100 million in September quarter revenue from the segment. Much of HCLTech's growth in Q2 came from banks and financial institutions.
• Divergent AI Strategies: HCLTech’s AI strategy, focusing on products and IP-led platforms, contrasts with peer Tata Consultancy Services (TCS), which is taking a hardware route through data centers.
• Global AI Infrastructure Deal: OpenAI signed a multi-year agreement with Broadcom Inc. to collaborate on custom chips and networking equipment. This is part of OpenAI’s ambitious plan to add 10 gigawatts' worth of AI data center capacity.
• Venture Capital in Deep Tech: Venture investors in India are increasingly focusing on high-growth industrial sectors blending deep tech with traditional industries, such as manufacturing, chemicals, and defense. Specialty chemicals startup Scimplify is in advanced talks to raise $70–100 million in a Series C round, which could more than double its $150 million valuation and fuel international expansion.

2. Media M&A and Global Consolidation

The US media sector is witnessing a major consolidation attempt with global implications.

• Paramount-Warner Bros. Discovery Battle: David Ellison, CEO of Paramount, is attempting to acquire all of Warner Bros. Discovery (WBD) before its planned split, despite WBD's CEO David Zaslav resisting the overtures. WBD has a market value of over $40 billion, while Paramount's is around $19 billion. If successful, the deal would create a sprawling media conglomerate.
• JPMorgan's US Security Focus: JPMorgan Chase & Co. committed to funneling $1.5 trillion over the next 10 years into industries that bolster US economic security and resiliency. This initiative targets sectors like rare earth minerals, pharmaceuticals, robotics, defense, and aerospace, reflecting CEO Jamie Dimon’s concern over US reliance on "unreliable sources" amidst trade brinkmanship with Beijing.

3. Real Estate and Consumer Markets

• Mumbai Redevelopment Boom: Top developers are increasingly pursuing society redevelopment projects in Mumbai to convert ageing residential buildings into modern high-rises, a capital-efficient model in the land-scarce city. Around 910 societies have initiated redevelopment, unlocking significant buildable area.
• Luxury Car Competition: In the Indian luxury car market, BMW is gaining on Mercedes-Benz, driven by its aggressive pricing strategy, particularly in the Electric Vehicle (EV) segment. BMW's India sales grew 13% in the first nine months of 2025, while Mercedes's sales declined 1.72%. BMW leads the domestic luxury EV segment.
• Retail Performance: Avenue Supermarts Ltd. (DMart) saw muted Q2FY26 earnings growth, with its standalone Ebitda margin contracting to 7.58% due to higher staff costs, other expenses, competition from quick-commerce, and a weaker sales mix (rising share of lower-margin foods).

Global Economic and Regulatory Context

The corporate activity is situated within a global context defined by trade friction and technological transformation.

• Tariff Risk: The imposition of US tariffs on India (totaling 50%) is projected to shave off 60 basis points from India’s economic growth. This risk is driving India to accelerate trade negotiations, including a Bilateral Trade Agreement (BTA) with the US.
• Global Trade Resilience: Despite US tariffs, the global economy has fared better than expected, with global merchandise trade volume growing by 4.9% in the first half of 2025.
• Safe-Haven Demand: Renewed US-China trade tensions and global uncertainty have spurred safe-haven demand, pushing gold futures to a record high of ₹1,23,977 per 10g on the MCX.
• Innovation as Growth Driver: The 2025 Nobel Prize in Economics was awarded to theorists who explained how innovation drives sustained economic expansion through "creative destruction". One laureate, Philippe Aghion, expressed criticism of the protectionist wave in the US, stating it is "not good for us, for growth and innovation".