Oct 22: Mutual Funds Turn Red, The Great Snack Wars

Prada’s Kolhapuri knock-offs are officially old news. The internet's latest fashion accessory is a Vimal Paan Masala handbag, strutting through Indian streets like it just dropped at Paris Fashion Week. For those who swear by “Bolo Zubaan Kesari,” this is the ultimate status symbol. While Indian internet has already crowned the global creators rocking the bag as “eligible for citizenship,” we’re just eagerly awaiting the next drop from our very own House of Vimal.

Now, let’s get into the Dispatch! 🚀

Today’s reading time is 6 mins.

From SIP To “Sit Tight”: India’s mutual fund industry is facing its toughest stretch in seven years. For the first time since 2018, one-year rolling returns across most equity mutual fund schemes have turned negative. Elara Capital data shows that aggressive equity deployment and concentrated inflows have not offset a broad-based slowdown. The reversal began around August 2025, when an AUM‑weighted gauge of equity mutual fund performance slipped below zero. Since February, equity funds have underperformed debt on a one‑year basis, with the “equity premium” narrowing to about 10%—the smallest gap since October 2020.

Investor Caution Evident: Pure equity inflows fell from ₹42,700 crore in July to ₹30,400 crore in September. Small-cap funds—recent retail favorites—saw some of the steepest pullbacks, while thematic and sectoral strategies struggled to attract money.  Notably, fresh allocations are skewing toward New Fund Offerings (NFOs) rather than existing schemes, signalling opportunism over conviction.

Weakness Is Broad-Based: The share of schemes posting positive one‑year returns is at its lowest since the COVID‑19 sell‑off of 2020, and median returns across large-, mid-, and small-cap funds have slipped in the red. Fund managers have trimmed cash from 6.8% in April to 5.4% in September, indicating a push to stay invested despite deteriorating performance. Meanwhile, inflows are increasingly concentrated: about 25% of mutual fund investments this year went into just six stocks, and half into only 19. The crowding raises red flags about sector‑specific vulnerability if volatility persists.

The Crunch of the Nation: India’s snacks market has become a fiercely competitive arena this Diwali, valued at ₹46,571 crore. And the crunch is only set to grow—the sector is projected to more than double to ₹1,01,811 crore by 2033, expanding at a robust 8.6% annual rate, according to IMARC.

Giants Rule The Shelf: At the heart of this boom are the old titans—Haldiram’s, Balaji Wafers, and Bikaji—who have built empires on trust, affordability, and deep distribution. Haldiram’s now commands about 13% of the savoury snacks market and is valued at nearly $10 billion after Temasek’s recent investment. Balaji posted profits of ₹578.8 crore in FY24, while Bikaji continues expanding aggressively, targeting 3.5 lakh retail outlets. For decades, ₹5 and ₹10 packs defined the industry. Today, a younger, health-conscious generation is rewriting the rules of snacking.

Meet The Disruptors: Enter Farmley, TagZ, Bonvie, and Too Yumm!—brands selling “clean,” “mindful,” and “modern” indulgence. Healthy snacking is growing 1.2 times faster than traditional options, with 55% of Indians preferring preservative-free choices and 52% prioritising eco-conscious packaging. But the old guard isn’t fading. Regional giants like Balaji and Bikaji have leveraged local identity and taste loyalty to stay relevant. The informal sector continues to dominate rural markets where trust and price trump packaging. Even so, the category transformation has caught global attention. With Diwali lighting up competition, traditional brands are rolling out festive namkeen boxes, while startups push well-designed dry-fruit assortments through Blinkit and Swiggy Instamart.

India’s Smartphone Market Grows 3%: India’s smartphone market showed modest growth in the September quarter, reflecting steady demand despite economic headwinds. Premium devices led the recovery, with Apple posting its strongest quarter ever in the country. Analysts expect festive season sales to further boost volumes in the coming months.

Reliance Secures Middle East Oil: Reliance Industries has moved to secure crude supplies from the Middle East amid increased scrutiny of Russian oil imports. The shift aims to reduce geopolitical and regulatory risks while ensuring uninterrupted refining operations. Middle Eastern contracts are expected to offer stability in both pricing and delivery. This strategy strengthens India’s energy security and provides flexibility in sourcing during uncertain global conditions.

Tech Startups Cut 4,000 Jobs: Indian tech startups have cut more than 4,000 jobs this year as funding tightens and costs are rationalized. Edtech, fintech, and SaaS startups were the most affected. Companies are recalibrating operations to improve sustainability amid market corrections, mirroring global layoff trends led by the USA.

Diwali Retail Hits ₹6.05 Lakh Crore: Retail sales during Diwali hit a record ₹6.05 lakh crore, underscoring robust consumer demand. Electronics, apparel, and household goods led purchases, with both urban and rural markets contributing. Festive promotions and easier digital access supported the surge, which economists view as constructive for year‑end momentum.

Core Sector Growth Slows To 3%: India’s eight core sectors recorded the slowest growth in three months, expanding just 3% in September. Steel, cement, and electricity sectors showed particularly muted performance, signaling softening industrial activity. Analysts attribute the slowdown to subdued domestic demand and global uncertainties. The pace of growth is expected to recover gradually if government infrastructure spending and private investments pick up.

FPI Outflows Hit, FDI Drops: Foreign portfolio investors sold aggressively in August, while net foreign direct investment turned negative for the first time in four years. Equity outflows reflected risk-off sentiment amid global market volatility. Overall FDI inflows fell to $6.0 billion, a sharp drop from last year’s peak. Analysts suggest continued monitoring of policy and macro trends to stabilize investment flows.

Setting The Stage: President Donald Trump is preparing for a high-stakes trip to Asia, with stops planned in Malaysia, Japan, and South Korea. The visit comes at a critical time for global trade, with markets and policymakers closely watching potential developments. A much-anticipated meeting with Chinese President Xi Jinping adds extra weight, as observers speculate on the possible outcomes for trade and investment.

Key Objectives: The trip is aimed at addressing pressing economic and diplomatic concerns. Trade discussions, particularly with China, are expected to dominate the agenda, including talks on tariffs, export restrictions, and supply chain stability. In Japan, Trump seeks to strengthen bilateral economic ties and encourage new investments. Malaysia and South Korea will serve as platforms for regional cooperation, multilateral dialogue, and broader geopolitical engagement.

Stakeholders In Focus: China remains a central player, with the Xi-Trump meeting poised to influence not just bilateral trade but broader global supply chains. Japan is targeted for investment and deeper economic collaboration, while South Korea is critical for trade relations and regional security concerns. Malaysia’s regional summit presents an opportunity to enhance diplomatic relations and signal the U.S.’s commitment to Asia.

Potential Outcomes: Optimistically, the trip could yield successful trade agreements, fresh investments, and strengthened regional ties. Conversely, stalled talks or missteps could intensify trade disputes and destabilize markets. Either way, the visit is poised to have ripple effects on international relations, economic policies, and investor sentiment across the globe.

L’Oreal Eyes Armani Stake: L’Oreal is expanding its luxury footprint after acquiring Kering’s beauty division and now exploring a stake in Armani. The move signals the company’s push into premium cosmetics and fragrances. Analysts say this strategy could strengthen L’Oreal’s presence in high-end markets globally. Competition among luxury beauty brands is expected to intensify as acquisitions reshape the landscape.

Fed To Cut Rates Twice More: The US Federal Reserve plans to cut interest rates twice more this year amid signs of slowing inflation and economic activity. However, forecasts for 2026 remain uncertain, with policymakers emphasizing data-driven decisions.

Apple Challenges EU Digital Law: Apple has challenged the European Union’s sweeping digital regulations, marking its largest legal confrontation over tech compliance. The case centers on restrictions imposed on app stores and digital business practices. Observers see the outcome as a test of EU authority over global tech giants. The verdict could have far-reaching implications for Apple and other multinational technology companies operating in Europe.

TSMC Plans New Taiwan Fab: TSMC has applied for permits to construct a high-speed semiconductor fabrication plant in Central Taiwan. The move is part of the company’s strategy to boost production of advanced chips and meet surging global demand. Authorities are reviewing environmental and regulatory approvals before construction can begin. This expansion reinforces TSMC’s role as a key player in the global chip supply chain.

ChatGPT Exits WhatsApp: OpenAI Confirmed that ChatGPT will no longer be available on WhatsApp after Meta discontinued support for AI chatbots on its platform. The move affects users relying on ChatGPT for messaging and productivity tasks. OpenAI says it remains committed to other platforms and integrations. This decision underscores growing tensions between AI developers and social media platforms.

Musk Mocks Signal Amid AWS Outage: During Amazon Web Services’ major outage, Elon Musk promoted X Chat, mocking Signal for relying on AWS infrastructure. Musk’s tweet highlighted the vulnerabilities of businesses dependent on third-party cloud providers. The incident sparked discussion on the resilience of digital platforms and the role of tech monopolies. Analysts say outages like these underscore the importance of redundancy in critical systems.

Klarna vs Google Trial Begins: Klarna has begun its $8.3-billion antitrust lawsuit against Google, alleging unfair practices that hinder competition. The trial could set important precedents for tech regulation and digital payment markets. Both companies are expected to present extensive evidence over several weeks. Observers note that the case may influence broader scrutiny of Google’s market dominance globally.

Japan Set For First Woman PM: Sanae Takaichi has secured a coalition agreement, positioning her to become Japan’s first female Prime Minister. The deal comes after last-minute negotiations and political maneuvering. Observers see her leadership as a potential shift in Japan’s domestic and foreign policies. Her tenure will be closely watched for reforms and international diplomacy.

Ola Electric Gets Court Protection: Ola Electric obtained court protection following an FIR filed after an employee’s death at its facility. The legal move shields the company from immediate police action while investigations continue. Authorities are examining workplace safety protocols. Industry observers say the case highlights scrutiny over safety standards in India’s EV sector.

Tata Trusts Reappoints Srinivasan: Tata Trusts has reappointed Venu Srinivasan as a lifetime trustee, while attention turns to Mehli Mistry amid reported internal disputes. The decision comes as the organization navigates succession planning and governance challenges. Analysts note that these leadership moves could influence Tata Sons’ strategic direction and philanthropic priorities.

THAT’S ALL FOR TODAY!

Got thoughts? We love to hear it. Just reply to this email. 

Was this email forwarded to you? Subscribe via ✉️ thedesidispatch.com

Not on the WhatsApp community yet? Join it here

Thank you and keep reading!🚀