Nov 8: India’s Banking Upgrade, The IPO That Raised Questions

Bhaijaan is back, and the online ether is overheating. Sallu bhai just dropped new shirtless post-workout photos, showing off ripped abs and a chiselled frame, and folks are saying “Prime Salman has returned.” What is prime Salman you ask? Don’t ask. There is no right or wrong answer.

Now, let’s get into the Dispatch! 🚀

Today’s reading time is 7 mins.

The stock market indices fell for a third straight session on Friday, tracking weak global cues and mixed Q2 earnings. The market saw a "sell-on-rise" trend, with investors cautiously awaiting clarity on the India-US trade deal and the end of the US government shutdown.

India appears to be entering a defining phase in its banking story. After decades of operating with a large number of relatively small public sector banks, New Delhi is pushing toward creating a few, much larger and globally competitive banking institutions. This aligns with the broader national ambition of “Viksit Bharat 2047” - a developed India powered by strong financial engines capable of supporting its growth trajectory.

Why Bigger Banks Are Needed: India’s economic ambitions today are far more capital-intensive than they were in previous decades. Infrastructure, renewable energy, high-tech manufacturing, space, and defence all require large, long-term financing commitments. Smaller banks often lack the balance sheet strength to underwrite such large-scale projects on their own. In comparison, global banking giants in the US, China, and Europe can mobilise massive funds, participate in syndicated lending, and deploy capital internationally. India’s largest bank, State Bank of India, still ranks around 43rd globally in asset size. For India to finance the scale of growth it envisions, its banks must grow accordingly, not just in size, but also in capability.

The Consolidation Journey So Far: The first major step was taken in 2020, when public sector banks were consolidated from 27 to 12. This reduced overlap, improved operational focus, and initiated scale-building. However, analysts argue that size alone is not enough. To truly become global contenders, banks need structural reform - especially in governance, HR, technology, and risk oversight. Raising foreign investment limits in public sector banks is also being considered to attract global capital and specialist talent.

Challenges On The Road Ahead: Consolidation comes with complexity - integrating technology systems, aligning work cultures, managing employee transitions & avoiding the creation of “too-big-to-fail” institutions. It is also crucial that scale does not dilute service quality, regional outreach, or financial stability.

What Success Could Mean: If executed well, India could soon have a handful of globally competitive banking champions capable of supporting the country’s rise in global trade, infrastructure leadership, and digital finance innovation. In many ways, strengthening banks is not just a financial reform, it is a nation-building project.

India’s equity markets have been on a dream run, with record retail participation and buoyant IPO listings. But the recent Lenskart Solutions IPO has triggered a storm that goes beyond valuations and market appetite. At the heart of the debate lies a deeper question: Are mutual fund (MF) managers truly acting in the best interest of the investors whose money they manage?

The Governance And Valuation Flashpoint: The criticism surrounding the IPO does not stem merely from it being expensive, Indian markets have seen richly priced offerings before. The concern is how aggressively mutual funds participated, despite questions on corporate governance, transparency, and the sustainability of the business model at such valuations. When fund houses deploy large sums into high-valuation IPOs, it signals confidence to retail investors who often follow institutional lead. If this confidence is not backed by rigorous due diligence, the outcome is not just a mispriced stock, it is a breach of fiduciary responsibility.

A Larger Market Image At Stake: India has been positioning itself as a trustworthy capital market where governance standards are rising. The mutual fund industry, in particular, has earned credibility among middle-class investors as the “safe” way to enter the markets. But episodes like this raise uncomfortable questions - when clarity is missing, trust erodes. And trust is the currency that keeps capital flowing.

Upgrad In Talks To Acquire Unacademy: Unacademy may soon be acquired by Upgrad in a deal valued at around $300–320 million, marking a steep drop of nearly 90% from its peak valuation during the pandemic edtech boom. The move reflects the consolidation wave in India’s edtech sector as funding slows and growth stabilises.

HAL–GE Aerospace Jet Engine Deal: Hindustan Aeronautics Limited (HAL) has signed a major contract with GE Aerospace to procure 97 F404 jet engines. These engines will power India’s Tejas Light Combat Aircraft, supporting ongoing expansion of the indigenous fighter fleet. The agreement further strengthens defence cooperation between India and the US. The procurement aligns with India’s push for local manufacturing and advanced aerospace capability.

Britannia Entering Protein Beverages: Britannia Industries is preparing to enter the ready-to-drink protein beverage category, aiming to tap into India’s growing health and nutrition market. This move aligns with rising demand for convenient high-protein snacks and drinks among younger consumers.

B9 Beverages / Bira 91 Asset Sale: The craft brewer is preparing to sell one of its assets in a bid to raise “immediate cash” so it can clear overdue salaries and provident-fund dues for employees. Founder Ankur Jain has notified staff and lenders, though investors question the lack of clarity around the buyer or terms.

Nykaa Q2 Results: Nykaa’s parent reported a roughly 25% increase in revenue for the quarter, while net profit ballooned over 200% year-on-year to around ₹34 crore. The stronger performance reflects growth in both its beauty and fashion verticals, though margins and the fashion segment’s size remain areas to watch.

Tiger Global Exit From Ather Energy: Venture investor Tiger Global has exited its entire stake (about 5%) in Ather Energy, selling shares worth roughly ₹1,204 crore in open-market transactions. The exit comes after lock-in periods passed and ahead of Ather’s next quarter results, suggesting a pivot in investment strategy for the EV firm.  

The recent uncertainty around U.S. tariff policy is stirring unease among several key trading partners, particularly developing economies and export-dependent sectors. With signals of possible tariff hikes or selective trade barriers emerging again, countries are reassessing their market exposure and long-term strategies.

Why The U.S. Tariff Question Is Back: The U.S. has been increasingly signaling an inward shift in trade policy, aiming to protect domestic manufacturing and control trade deficits. Speculation around fresh duties, especially on goods from Asia, has prompted concerns that Washington may reintroduce broader tariff frameworks reminiscent of earlier trade tensions. This shift is not limited to China; the ripple effect could touch India, Vietnam, Mexico, Bangladesh, and several African exporters whose markets rely heavily on U.S. demand.

Who Stands To Be Most Affected: Labour-intensive sectors like apparel, leather, footwear, gems and jewellery, and furniture are likely to feel the strain first. These industries compete largely on cost advantage, and even minor tariff adjustments could erode price competitiveness. Countries with supply chains deeply integrated with U.S. consumption cycles will be particularly exposed. South and Southeast Asian exporters face the risk of order diversions to near-shore or domestic U.S. suppliers.

The Bottom Line: Fresh tariff doubts from the U.S. aren’t just trade policy noise, they signal a broader shift toward protective economics. Countries that adapt quickly by diversifying markets, deepening value chains, and building resilient supply networks will not just withstand the shock, they may find new strategic advantages in the reshaped global trade order.

China Commissions Third Aircraft Carrier: China has inducted its third aircraft carrier, the Fujian, marking a major leap in its naval capabilities. Unlike its earlier carriers, this one uses electromagnetic catapult technology, allowing faster and more efficient aircraft launches. The move strengthens China's maritime presence in the Indo-Pacific at a time of rising geopolitical tensions.

Is Affordability Fading In America? Despite political promises of lower living costs, U.S. consumers continue to face rising retail prices during the holiday season. Basic goods and popular brands at retailers like Target and Amazon have become more expensive, squeezing household budgets. Donald Trump has revived the affordability narrative, claiming he could deliver a 25% reduction in prices.

America’s Ultra-Rich Widen Wealth Gap: New data shows a sharp concentration of financial power in the U.S., where the ultra-rich now control 24% of Wall Street assets. Meanwhile, the average American household earns about $83,730, indicating the widening wealth divide. Rising stock market gains and private investment access have largely benefitted high-net-worth individuals. Economists warn this disparity could influence political discourse, consumption patterns, and long-term economic stability.

MAGA Factions Oppose Ramaswamy In Ohio Race: Internal dissent within the MAGA movement has emerged over Vivek Ramaswamy’s bid for Ohio governor, with some supporters suggesting he should lose rather than win. The backlash follows recent GOP losses and Ramaswamy’s call for less identity-politics and more focus on affordability. The moment signals growing ideological fault lines in the Republican base ahead of the 2026 elections.

U.S. Airlines Cancel 700+ Flights Amid FAA Cuts: The Federal Aviation Administration ordered a roughly 4% reduction in flights across 40 major U.S. airports due to staffing shortages tied to the government shutdown, resulting in more than 700 cancellations. Airlines warn deeper cuts (6% then 10%) are on the way if the situation continues.

Comcast's Sky In Talks To Buy ITV's Media Unit: Comcast-owned Sky is in preliminary discussions to acquire ITV’s television and streaming business in a deal valued around US$2.15 billion (≈£1.6 billion). The move would create a UK media powerhouse combining Sky’s pay-TV and ITV’s free-to-air channels and streaming platform. Major regulatory and competition risks loom given the potential 70% share of the TV ad market.

SoftBank Hit By Steep Market Selloff: SoftBank Group has faced nearly $50 billion in weekly losses as investors sharply pulled back from high-valuation AI and tech stocks across Asia. The selloff hit key holdings in its Vision Fund portfolio, including chip and software startups seen as over-priced. The correction has renewed scrutiny of Masayoshi Son’s aggressive AI-first investment strategy.

India Responds To Trump’s Pakistan Nuclear Claim: India issued a formal statement after U.S. President Donald Trump alleged that Pakistan was testing nuclear weapons, emphasizing that the matter requires credible evidence and careful handling in line with regional stability. New Delhi’s response reflects its preference for diplomacy and caution amid heightened nuclear rhetoric.

More Financial‐Sector Reforms Needed: According to a new World Bank report, India must accelerate financial-sector reforms, such as banking recapitalisation, fintech regulation and capital-market deepening to achieve its goal of becoming a $30 trillion economy. The report states that strengthening institutions, enhancing credit access for MSMEs, and deepening bond markets will be key drivers. Without these reforms, growth may stall or become uneven across sectors.

India Begins Work On Indigenous Drones: Defence Minister remarks
India has initiated development of domestically made drones, signalling a push to reduce reliance on foreign weapon systems. Defence Minister Rajnath Singh stated that self-reliance in defence manufacturing is key to the country’s strategic autonomy.

MS Dhoni Available For IPL 2026: MS Dhoni has reportedly informed his franchise Chennai Super Kings that he is available for the 2026 IPL season. Meanwhile, trade rumours around Sanju Samson are gaining traction, adding intrigue for franchises, and fans.

MEA In Touch After 44 Indians Found In Russian Army: The Ministry of External Affairs has reached out to the Kremlin after identifying 44 Indian nationals reportedly serving in the Russian armed forces. Indian authorities have issued a warning to citizens against joining foreign military services, citing legal and diplomatic risks.

Technical Glitch Causes Chaos At Delhi airport: A significant technical snag at Indira Gandhi International Airport (Delhi) led to the disruption of over 300 flights, triggering widespread passenger inconvenience and schedule chaos. Airlines scrambled to re-route and manage cancellations amid peak travel traffic. Authorities say normalcy is gradually returning, but questions remain over the robustness of ground-systems and contingency planning. The incident raises fresh scrutiny over India’s aviation infrastructure readiness.

THAT’S ALL FOR TODAY!

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