Category: Analysis

Categories
Analysis Market News Reports

Red Alert! D-Street Investors Lose ₹5 Lakh Crore as Sensex Plunges Over 1,100 Points; Nifty Falls Below 24,900

Indian markets traded in the deep red on Friday, with Sensex and Nifty seeing significant declines. Investors remained cautious ahead of a crucial US jobs report that could shape the pace and size of the Federal Reserve’s interest rate cuts. Selling pressure was witnessed across all sectors.

The BSE Sensex slipped below 81,200, trading over 1,100 points lower. Meanwhile, Nifty50 dropped below the 24,900 mark. The market capitalisation of all listed companies on the BSE declined by ₹5.3 lakh crore to ₹460.35 lakh crore.

Among the Sensex stocks, Reliance Industries, SBI, ICICI Bank, L&T, Infosys, ITC, HCL Tech, and HDFC Bank were the primary contributors to the index’s decline.

Sector-wise, the Nifty PSU Bank and Oil & Gas indices dropped by over 2%, while the Auto, Bank, Media, Metal, and Consumer Durables sectors declined by over 1%. Domestically-focused small-caps fell 0.9%, and mid-caps slid 1.3%.

In contrast, Ashoka Buildcon surged 6% after its subsidiary Viva Highways monetised Pune land for ₹453 crore.

1) Nervousness builds ahead of key US jobs data

Investors grew increasingly nervous ahead of the US non-farm payrolls report, due later today, which led to a decline in Indian equity markets. Federal Reserve Chair Jerome Powell recently emphasized that policymakers do not welcome further weakening in the labor market, signaling the possibility of a rate cut in September.

Analysts are predicting an increase of 165,000 new jobs and a slight dip in the unemployment rate to 4.2%. However, concerns have been growing after softer job openings and weaker gains in the private sector, which have raised the likelihood of a half-point rate cut to 42%.

“If the August jobs data, due later today, falls short of expectations and unemployment rises higher than forecast, the Fed may cut by 50 basis points,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

“However, this may not be well-received by the market, as serious growth concerns and fears of a hard landing for the US economy could weigh heavily,” he added.

2) Decline in bank stocks ahead of loan and deposit growth data

Indian equity indices also fell as heavyweight financial stocks declined, driven by concerns over upcoming data on bank loan and deposit growth, due later today.

Meanwhile, the latest Reserve Bank of India (RBI) data revealed that deposits grew by 11.7% in the June 2024 quarter, while bank credit surged by 15%. This widening gap between deposit and credit growth has raised concerns about potential liquidity issues, heightening investor anxiety and contributing to the decline in bank stocks.

3) Tepid Global Market Mood

MSCI’s broadest index of Asia-Pacific shares outside Japan edged 0.2% higher, despite having fallen 2.3% so far this week. Meanwhile, Japan’s Nikkei slipped 0.1%, bringing its total weekly decline to 3.9%.

China’s share markets opened with mixed performances, while Hong Kong’s Hang Seng remained flat. The nervous sentiment in the markets also impacted US futures, with Nasdaq futures down 0.6% and S&P futures slipping 0.3%.

4) FIIs turn net sellers

Foreign institutional investors (FIIs) turned net sellers on September 5, offloading equities worth ₹688 crore. In contrast, domestic institutional investors (DIIs) were net buyers on the same day, purchasing equities valued at ₹2,970 crore.

Crude Oil

Oil prices remained flat in early trading on Friday as investors balanced a significant withdrawal from U.S. crude inventories and a delay in production hikes by OPEC+ producers against mixed U.S. employment data.

Brent crude futures rose by 1 cent, or 0.01%, to $72.70, while U.S. West Texas Intermediate (WTI) crude futures inched up 2 cents, or 0.02%, to $69.16.

Rupee vs Dollar

The Indian rupee strengthened on Friday, buoyed by disappointing U.S. private payrolls data, which fueled expectations of a weaker overall jobs report. This prompted traders to avoid the U.S. dollar.

At 9:30 a.m. IST, the rupee was trading at 83.9350 to the U.S. dollar, up from 83.9825 in the previous session.

Categories
Analysis Market News Reports

Singapore and India sign agreements for cooperation in semiconductors.

In an effort to further their bilateral collaboration, Prime Minister Narendra Modi and Singaporean counterpart Lawrence Wong signed four memorandums of understanding on Thursday. Development of semiconductor clusters and talent development in semiconductor design and manufacture are among the main areas of concentration of the agreements.

 

Modi was greeted with a red carpet reception at Singapore Parliament House prior to his meeting with Wong. There, he also signed the guest book. Days after Wong assumed office and Modi started his third term as prime minister, the two leaders will meet. After the meetings, the two leaders also observed the exchange of four memorandums of understanding. Modi’s visit, which began on Wednesday, is a significant step towards strengthening India and Singapore’s strategic cooperation. Following Modi’s recent visit to Brunei, Singapore’s Prime Minister, Lawrence Wong, has extended an invitation for this visit.

 

Prominent individuals in Modi’s delegation include National Security Advisor Ajit Doval and Minister of External Affairs S. Jaishankar. Given that Modi last visited Singapore in 2018, the visit is noteworthy. Modi will also visit with a number of businesspeople and leaders in Singapore as part of his tour, with the goal of fostering new opportunities for collaboration and fortifying the two countries’ relationship.

Categories
Analysis Market News Reports

Nvidia Faces Historic $279 Billion Market Value Drop Amid Wall Street Decline

Shares of AI heavyweight Nvidia (NVDA.O) tumbled 9.5% on Tuesday, marking the deepest single-day decline in market value for a U.S. company. This massive drop came as investors tempered their optimism about artificial intelligence in the face of a broad market selloff, following tepid economic data.

Nvidia’s market capitalization fell by $279 billion, signaling growing caution among investors regarding emerging AI technology, which had driven much of this year’s stock market gains. This decline also affected the broader chip industry, with the PHLX chip index (.SOX) plummeting 7.75%, marking its largest one-day drop since 2020.

The latest concerns about AI follow Nvidia’s quarterly forecast last Wednesday, which failed to meet the lofty expectations of investors who had fueled a dizzying rally in the stock. “Such a massive amount of money has gone to tech and semiconductors in the last 12 months that the trade is completely skewed,” said Todd Sohn, an ETF strategist at Strategas Securities.

Intel (INTC.O) also experienced a sharp decline, dropping nearly 9%. This came after Reuters reported that CEO Pat Gelsinger and key executives are expected to present a plan to the company’s board of directors, aiming to streamline operations by cutting unnecessary businesses and revamping capital spending at the struggling chipmaker.

Concerns over slow returns from substantial AI investments have recently weighed on Wall Street’s most valuable companies. Shares of Microsoft (MSFT.O) and Alphabet (GOOGL.O) have both traded lower following their quarterly reports in July, reflecting investor unease about the long-term profitability of AI ventures.

BlackRock strategists highlighted these concerns in a client note on Tuesday, stating, “Some recent research has questioned if the revenues from AI alone will eventually justify this wave of capital spending on it. When assessing AI capex by individual companies, investors must consider if they are making the best use of their balance sheets and capital.”

At its July record high, Nvidia had nearly tripled in 2024. Despite its recent losses, the company remains up 118% year-to-date.

Tuesday’s weakness in chip stocks mirrored broader declines across Wall Street. The Nasdaq (.IXIC) fell 3.3%, while the S&P 500 (.SPX) dropped 2.1%.

Most investors anticipate the Federal Reserve will cut interest rates by 25 basis points in its September 18 policy announcement, according to CME’s FedWatch Tool. However, expectations for a larger 50 basis point cut increased to 37% from 30% after Tuesday’s data suggested continued softness in the manufacturing sector.

This week, investors will also focus on labor market data, culminating in Friday’s key government payrolls report. “There’s concern about what the job numbers are going to show, about seasonality,” warned Steve Sosnick, a market strategist at Interactive Brokers.

The chip index is now up 14% in 2024, just under the S&P 500’s 16% gain.

Nvidia’s record one-day loss in market value of $279 billion surpasses the $232 billion drop suffered by Facebook-owner Meta Platforms (META.O) on February 3, 2022, when the social media giant issued a grim forecast, according to LSEG data.

Following Nvidia’s quarterly report last week, the mean analyst estimate for its annual net income through January 2025 has increased to $70.35 billion, up from approximately $68 billion before the report. Despite the increase in earnings estimates, Nvidia is now trading at 34 times expected earnings, down from over 40 in June, aligning with its two-year average.

Broadcom (AVGO.O), another chipmaker benefiting from the AI computing boom, fell 6.2% ahead of its quarterly report on Thursday.

Categories
Analysis Market News Reports

Indian Army and Navy to Receive Rs 1.2 Lakh Crore Boost for High-Tech Warships and Next-Gen Tanks to Counter China

The government is poised to approve several major defense projects worth a total of Rs 1.2 lakh crore. The Defence Acquisition Council (DAC) is set to meet on Tuesday to review and potentially authorize these significant initiatives.

According to defense sources, the Defence Acquisition Council (DAC) is expected to approve the issuance of a tender worth approximately Rs 70,000 crore to Indian shipyards, including private sector shipyards, under the ‘Make in India’ initiative.

Indian Navy’s Project 17 Bravo

One of the key projects under consideration is the Indian Navy’s Project 17 Bravo, which focuses on the construction of seven advanced stealth frigates. Valued at approximately Rs 70,000 crore, this initiative aims to significantly enhance the Navy’s capabilities by introducing the most modern warships ever built in India.

Mazagon Dockyards Limited (MDL) and Garden Reach Shipbuilders and Engineers (GRSE) are the leading contenders for the Indian Navy’s Project 17 Bravo. MDL is currently constructing four frigates under Project 17A, while GRSE is building three. According to a source quoted in an India Today report, “There is a possibility that the mega project could be split between the two shipyards, with the lowest bidder receiving four ships, while the other could be awarded three.”

Project Details and Tender Process

The tender for the Navy’s Project 17 Bravo will likely be directed at Category A shipyards, including Mazagon Dockyards Limited (MDL), Garden Reach Shipbuilders and Engineers (GRSE), Goa Shipyard Limited, and Larsen & Toubro. To expedite the project, there is a possibility of splitting the order between two shipyards. Currently, MDL and GRSE are involved in constructing frigates under Project 17A, with MDL building four and GRSE constructing three.

Indian Army’s Plan for New Tanks

China’s “string of pearls” strategy around India has intensified, transitioning from economic maneuvers to direct military initiatives. Beijing has been enhancing regional infrastructure like airports, ports, and electronic surveillance systems, which serve dual civilian and military purposes. These upgrades include underwater terrain mapping in the Maldives and electronic surveillance in the Bay of Bengal, specifically targeting Indian defense facilities.
 
China has also expanded its naval presence in Sri Lanka and is building an airstrip on the Great Coco Island in Myanmar, near India’s Andaman and Nicobar Islands. This island is reportedly being used as a listening post against India, with plans for permanent research vessel deployment. Additionally, China and Pakistan will conduct a joint naval exercise in the Arabian Sea in January 2025.
 
Furthermore, China has upgraded its naval base in Djibouti from a simple refueling stop to a facility capable of repair and refurbishment. This expansion poses significant challenges to India’s strategic and technological capabilities.

High-Level DAC Meeting

The upcoming Defence Acquisition Council (DAC) meeting, chaired by Defence Minister Rajnath Singh, will involve key defense leaders, including the Chief of Defence Staff and service chiefs. The meeting will focus on approving critical acquisitions, such as infantry combat vehicles, aligning with India’s ‘Make in India’ vision and self-reliance in defense manufacturing. These initiatives aim to modernize the Indian military and strengthen national security by upgrading the capabilities of both the Army and Navy.
Categories
Analysis Market News Reports

Reliance sets its sights on transforming Jamnagar into the global energy hub, revealing ambitious plans for its new energy business.

At the 47th Annual General Meeting of Reliance Industries Limited, Chairman Mukesh Ambani announced that by 2025, Jamnagar will become the epicenter of the company’s new energy business. The Dhirubhai Ambani Green Energy Giga Manufacturing Complex will be established there, envisioned as the world’s largest, most advanced, modular, and integrated green energy ecosystem at a single location. Ambani also expressed confidence that this new energy business would become “big and profitable” within the next 5 to 7 years.

Mukesh Ambani expressed confidence that Reliance’s new energy business will become “big and profitable” in the next 5-7 years, driven by the following five factors:

1. Meeting Captive RE-RTC Requirements: The focus will be on fulfilling the large captive Renewable Energy-Round-the-Clock (RE-RTC) needs across Reliance Industries Limited’s group businesses over the next 5 to 7 years, significantly reducing energy costs.

2. Value-Accretive Offtake Agreements: Investments in green fuels projects will be supported by value-accretive offtake agreements with large global partners.

3. Positive Cash Flow from Day One: Ensuring that all projects are cash flow positive from the very beginning.

4. Next-Gen Products through Deep-Tech R&D: Development of next-generation products through advanced research and development (R&D) that will offer higher efficiency and reduced costs, leading to greater margin expansion.

5. Startup Growth Mindset: Building businesses with the mindset of startup growth companies, empowered by task force teams comprising best-in-class global talent.

Additionally, Ambani has planned an investment of up to Rs 75,000 crore to establish a manufacturing ecosystem aimed at maximizing margins.

“We are on track to fully commit and invest up to ₹75,000 crore to establish this manufacturing ecosystem, which will be extensively enabled by emerging technologies such as AI, IoT, Machine Learning, and Robotics,” said Mukesh Ambani. “Our comprehensive ownership and automation of the integrated value chains will enable us to maximize margins, surpassing those of stand-alone, non-integrated players.”

Reliance Industries Limited has announced several ambitious projects to advance its new energy business:

1. First Solar Giga Factory: The company will launch its solar giga factory this year, producing photovoltaic (PV) modules, cells, wafers, ingots, polysilicon, and glass at a single location. This facility will have the capacity to produce 20 GW of solar PV modules by the end of the year, converting sunlight into electricity.

2. Sodium-Ion and Lithium Battery Production: Reliance plans to industrialize sodium-ion cell production at the megawatt (MW) level by 2025 and start a pilot production line for lithium battery cells, aiming for a 50 MWh annual output by 2026.

3. Investment in New Fuels Business: The company announced a USD 10 billion investment over three years, beginning in 2021, to develop a new fuels business based on achieving 100 GW of renewable power capacity by 2030.

4. Giga Factories in Jamnagar: The plan includes establishing four giga factories in Jamnagar, Gujarat, dedicated to manufacturing renewable equipment, battery storage, fuel cells, and hydrogen.

5. Modular Expansion and Advanced Technology: The solar giga factory is designed for modular expansion at minimal cost and within a short time frame. Reliance has fully integrated and indigenized the Heterojunction Technology (HJT) from its wholly-owned subsidiary, REC Singapore, to develop first-generation bifacial solar panels with a cell efficiency exceeding 26%.

6. Electrolyser Manufacturing Facility: By 2026, Reliance plans to build a multi-GW electrolyser manufacturing facility on the west coast of India. This facility will produce green hydrogen and green fuels at the most economical cost, leveraging the company’s deep understanding of electrochemistry, industrial scalability, and integration with low-cost solar energy.

7. Adaptable and Expandable Factory: The electrolyser manufacturing facility will be fully adaptable, supporting various technologies such as Alkaline, Proton Exchange Membrane (PEM), and Anion Exchange Membrane (AEM). Built to Industry 4.0 standards, the facility will be expandable in a modular fashion to meet market demand.

These initiatives are part of Reliance’s broader strategy to transform Jamnagar into a leading global hub for renewable energy and green fuels.

Categories
Analysis Market News Reports

Reliance AGM 2024 : Mukesh Ambani addresses the 47th Annual General Meeting of Reliance Industries; stock rises by 2%.

Reliance AGM 2024 Live Updates: Key Highlights from Mukesh Ambani’s Address

Chairman Mukesh Ambani is addressing shareholders at the 47th Annual General Meeting (AGM) of Reliance Industries in Mumbai on August 29, 2024. Earlier today, the company announced to stock exchanges that it will consider a 1:1 bonus issue on September 5. Here are the top highlights from his speech:

Jio’s Milestones and Technological Advancements

– World’s Largest Mobile Data Company: Jio has now become the world’s largest mobile data company with 490 million users, each consuming over 30 GB of data per month on average.

– Global Network Traffic: Jio’s network carries nearly 8% of global mobile traffic, showcasing its immense scale and reach.

– Deep-Tech Innovations:Jio has emerged as a deep-tech innovator with a fully homegrown 5G stack developed by its engineers. This technology will form the backbone of India’s digital infrastructure.

– AI-Native Digital Infrastructure: Reliance has built AI-native digital infrastructure for all its businesses, aiming to bring the benefits of AI to every Indian, much like the way it expanded broadband access.

– AI Initiatives: Jio is developing a comprehensive suite of AI tools under the brand “Jio Brain.” This platform is set to drive transformation across Reliance’s operating companies, laying the groundwork for a national AI infrastructure. Plans include establishing gigawatt-scale AI-ready data centers in Jamnagar, powered by Reliance’s green energy.

AI in Key Sectors

– Sectors to Benefit from AI: Reliance’s AI initiatives are expected to significantly impact four key sectors: agriculture, education, healthcare, and small businesses. The company’s AI models and services will be hosted within India, adhering to the country’s data and privacy regulations.

– Connected Intelligence Concept: Reliance’s AI models will operate on a delivery model called “Connected Intelligence,” which allows users to access data and AI services from any device, anywhere, over low-latency broadband networks.

Jio Services and Offerings

– Jio AI-Cloud: Jio users will receive up to 100 GB of free cloud storage for storing and accessing photos, videos, documents, and other digital content. A new Jio AI-Cloud Welcome offer will be launched around Diwali, offering affordable cloud data storage and AI-powered services.

– Jio TvOS and HelloJio: Jio is set to launch Jio TvOS, a 100% homegrown operating system for Jio STBs. The HelloJio assistant has been upgraded with the latest Generative AI technologies to improve natural language understanding.

– Jio Phonecall AI: A new feature called Jio Phonecall AI will allow users to record and store any call using AI and convert the conversation from voice to text.

 Retail and Expansion

– Reliance Retail’s Growth: Reliance Retail is now among the top five global retailers in terms of store count and among the top ten in terms of market capitalization. The retail arm has built 19,000 stores, covering nearly 80 million square feet across over 7,000 cities, and partnered with 4 million kirana stores.

– Expansion in Grocery Sector: The grocery segment is expanding at 2.5 times the rate of the rest of the modern retail market.

 Energy and Sustainability Initiatives

– Oil to Chemicals (O2C) Business: The O2C business achieved revenue of ₹5,64,749 crore (US$ 67.9 billion) and an EBITDA of ₹62,393 crore (US$ 7.5 billion) last year. New facilities in the Vinyl value chain will add 1.5 MMTPA of PVC and CPVC by FY27.

– Sustainability Efforts: Reliance is on track to reach a capacity to recycle 5 billion PET bottles annually by next year and plans to add a million tonnes of specialty polyester capacity by FY27. It is also building India’s first integrated Carbon Fibre plant at Hazira, which will rank among the top three globally.

New Energy Ventures

– Green Energy Projects: Reliance has initiated a pilot project on 1,000 acres of arid wasteland to establish an integrated compressed biogas (CBG) plant. The company plans to commence production of its own solar photovoltaic (PV) modules by the end of this year.

This story is continually being updated.

Categories
Analysis Market News Reports

Apple Aims to Boost Its Presence in India’s Streaming Market with New Airtel Deal

Apple is partnering with India’s Bharti Airtel to provide its music and video streaming services for free to the telecom company’s premium customers. This collaboration will allow Apple to reach thousands of consumers in the world’s most populous country.

Apple TV+, which predominantly offers English-language content, has a relatively modest presence in India’s $28 billion media and entertainment market. It faces stiff competition from major players such as Netflix, Amazon Prime Video, Disney+ Hotstar, and Mukesh Ambani’s JioCinema.

This development occurs as competition in India’s media market intensifies, with an $8.5 billion merger between the Indian media assets of Reliance and Walt Disney—each having their own streaming service—under close scrutiny from antitrust regulators.

“Airtel announced on Tuesday that Apple TV+ will be included with its premium WiFi and postpaid plans,” the company said in a statement. However, neither Airtel nor Apple provided details about the financial terms of the partnership or any information on pricing.

Apple Music will be offered to existing premium users of Airtel’s Wynk music app, which is set to be discontinued. Airtel stated that employees from Wynk will be absorbed into the company.

According to two sources familiar with the strategy, Apple’s deal with Airtel aims to expand its digital services to a significantly larger consumer base, leveraging Airtel’s position as the second-largest telecom operator in India with 281 million subscribers. In comparison, Reliance Jio, owned by Mukesh Ambani, has 489 million users.


Apple TV+, recognized for its original series such as *Ted Lasso*, *The Morning Show*, and *Slow Horses*, has distinguished itself in the streaming market through its emphasis on in-house content. Unlike many competitors in India and globally, which provide a mix of older movies and TV shows from various studios along with their own original productions, Apple TV+ primarily focuses on its exclusive, original offerings.

Airtel is expected to announce new tariff plans within days that will include complimentary access to Apple TV+, according to two sources familiar with the plans.

Currently, Apple TV+ is priced at $9.99 per month in the U.S. and 99 Indian rupees ($1.18) per month in India. In comparison, Reliance JioCinema offers free cricket content and has plans starting at just 29 rupees per month, while Netflix begins at 149 rupees per month.

 

Cricket is a major draw for streaming platforms in India, and Disney faced a significant setback last year when it lost millions of users after losing the rights to stream the Indian Premier League to Reliance’s Jio.

Currently, Apple holds a 6% share of India’s 690 million smartphone users, according to Counterpoint Research. The rest of the market is largely dominated by Samsung and Xiaomi devices, which are primarily powered by Google’s Android operating system.

Categories
Analysis Market News Reports

Apple Begins Workforce Training for Made-in-India iPhone Pro Production: Bloomberg

Foxconn’s Sriperumbudur Facility in Tamil Nadu to Begin ‘New Product Introduction’ Process for iPhone 16 Pro Models; Apple Starts Training Workers to Produce iPhone 16 Pro and Pro Max Near Global Launch, Bloomberg Reports

In July, Moneycontrol exclusively reported, citing sources, that Apple Inc. plans to assemble the top-tier Pro and Pro Max models of the upcoming iPhone 16 series in India for the first time through its partner, Foxconn Technology Group.

Foxconn’s Sriperumbudur facility in Tamil Nadu will soon initiate the ‘new product introduction’ (NPI) process for the iPhone 16 Pro models and will enter mass production once the devices are launched. Foxconn, known for its advanced capabilities and deep integration within Apple’s supply chain, typically gets the first preference for new manufacturing projects.

Foxconn is expected to start assembling the premium devices ‘within weeks’ of the global launch, according to Bloomberg News, citing unnamed sources. Apple’s other India partners, including Pegatron’s India unit and the Tata Group, could also begin producing the Pro versions, Bloomberg News reported.

Additionally, Bloomberg News stated that Apple plans to make the made-in-India standard iPhone 16 available on the same day it begins its worldwide sale.

The Bloomberg report noted that it had reached out to representatives from Apple, Foxconn, and Pegatron, all of whom declined to comment, while Tata did not respond to a request for comment.

Apple has ramped up the production of its flagship iPhone devices in India through Foxconn and Tata Electronics.

Apple might resume preparations to manufacture iPads in India through Foxconn.

Additionally, Apple is working on increasing the production of components for AirPods wireless charging cases through contract manufacturer Jabil in Pune and may extend the same to Foxconn. Production of made-in-India AirPods could potentially begin early next year.

Categories
Analysis Market News Reports

Adani Group Attracts Over Rs 2,000 Crore from Mutual Funds in July

Adani Ports & SEZ led the pack with mutual funds buying shares worth over Rs 1,100 crore, followed by Adani Enterprises at Rs 890 crore, and Adani Power at Rs 218 crore.

Mutual funds invested over Rs 2,000 crore in Adani Group companies in July, with eight of the listed companies of the diversified conglomerate witnessing net buying, while Ambuja Cement faced minor selling.

Other companies, including ACC Ltd, Adani Energy Solutions, Adani Green Energy, Adani Total Gas, and Adani Wilmar Ltd, saw mutual fund buying ranging from Rs 1 crore to Rs 88 crore. Meanwhile, Ambuja Cements experienced selling worth Rs 338 crore.

More importantly, the quantum of mutual fund buying has been consistently rising over the past few months. In June, the group saw Rs 990 crore in net buying from mutual funds, which was higher than in May when the buying was pegged at Rs 880 crore.

Meanwhile, the total value of mutual fund holdings in the nine group firms stood at Rs 42,154 crore in July, compared to Rs 39,227 crore in June.

Furthermore, the surge in mutual fund interest followed significant promoter stake purchases in Adani Group companies during the June quarter. Promoters acquired shares worth Rs 23,000 crore, which analysts viewed as a positive indicator.

Categories
Analysis Market News Reports

Documents reveal that India’s Stock Market regulatory SEBI chief earned revenue, potentially violating rules.

Madhabi Puri Buch, the head of India’s markets regulator, reportedly continued to earn revenue from a consultancy firm during her seven-year tenure, potentially violating regulations for officials, as revealed by public documents reviewed by Reuters.

Hindenburg Research has accused Madhabi Puri Buch of a conflict of interest in her investigations into the Adani Group, citing her previous investments.

The allegations against Gautam Adani’s conglomerate, made in January last year, led to a significant drop in the share prices of Adani Enterprises and other group companies. Although the shares later recovered, the Securities and Exchange Board of India (SEBI) has since launched an ongoing investigation.

Separately, the U.S. short-seller Hindenburg Research, in its latest report, drew attention to two consultancy firms operated by Madhabi Puri Buch and her husband—Agora Partners, based in Singapore, and Agora Advisory, based in India.

Buch joined SEBI in 2017 and was appointed to the top position in March 2022. Over those seven years, Agora Advisory Pvt Ltd, where Buch holds a 99% share, earned a revenue of 37.1 million rupees ($442,025), according to public documents from the Registrar of Companies, analyzed by Reuters. This holding potentially violates a 2008 SEBI policy that prohibits officials from holding an office of profit or receiving salary or professional fees from other professional activities.

In her statement, Buch said that the consultancy firms had been disclosed to SEBI and that her husband used these firms for his consulting business after retiring from Unilever in 2019. However, Buch and the SEBI spokesperson did not immediately respond to emails seeking comment.

Hindenburg, citing Singapore company records, noted that Buch transferred all her shares in Agora Partners to her husband in March 2022. However, company records for the financial year ending March 2024 indicate that Buch still holds shares in the Indian consulting firm. The documents reviewed by Reuters do not detail the business activities of the consultancy, nor is there any available information suggesting these revenues were linked to the Adani Group.

Subhash Chandra Garg, a former top bureaucrat in the Indian government and a SEBI board member during Buch’s tenure, described her equity in the firm and its continued operations as a “very serious” breach of conduct. “There was no justification for her to continue to own the firm after she joined the board. She could not have been allowed even after making disclosures,” Garg said. “This makes her position completely untenable at the regulator.”

Buch has not clarified whether she was granted a waiver to retain her shareholding in the Indian consulting firm. A specific query to her on this matter also went unanswered.

Hindenburg’s allegations have sparked calls for Buch’s resignation, including from opposition leaders. A spokesperson for the ruling Bharatiya Janata Party (BJP) dismissed the allegations as a baseless attack.

According to Garg and another SEBI board member, no disclosures were made by Buch or other officials to the board regarding their business interests. “There was a requirement to make annual disclosures, but board members’ disclosures were not placed in front of the board for information or scrutiny,” said the board member, who declined to be identified as information on disclosures to the board is not public.

Garg added, “To be sure, no members’ disclosures were discussed. If the disclosures were made only in front of Ajay Tyagi, the then chairperson, I am not privy to that.” Messages and calls to Tyagi regarding whether these disclosures were made to him went unanswered.