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Impact Analysis |
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- India’s fiscal deficit as of Nov-25 stood at 62.3% of full-year FY26 target
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- There was an accretion of ₹1.52 trillion to the fiscal deficit in absolute terms in November 2025, due to tepid revenues
- Net tax revenues have only reached 49% of FY26 full-year target; and this is without calculating refunds to be paid out
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- RBI Financial Stability Report (FSR) warns of NBFC NPA accretion in FY27
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- The RBI FSR report expects the gross NPAs of NBFCs to spike by 60 bps from 2.3% to 2.9% by Sep-26, as per stress tests
- This is likely to result in a 110 basis points fall in the capital adequacy (CRAR) to 21.7%, still well above the 15% threshold
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- Life insurance penetration fell in India for the third year in a row to just 2.7%
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- This is a sharp fall from the highs of 3.2% life insurance penetration in 2022; at the peak of the pandemic paranoia
- The introduction of the new tax regime (NTR) and withdrawal of Section 80C benefits on life insurance reduced interest
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- Economists caution centre on rising fiscal deficit in pre-budget discussions
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- Whie 4.4% fiscal deficit to GDP target in FY26 is laudable, it is doubtful if that target can be met amid falling revenues
- Economists called for a cut in fiscal deficit to 3.0%, which may not be practical if government is looking at pump priming
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- Small cap funds gave negative returns for 2025; amid rising volatility
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- This is rather ironic as Nifty generated about 10.5% returns in 2025 and mid-cap index generated 5.3% returns in the year
- Investors do look at small caps for alpha hunting; but negative returns in 2025 rubbed off on the small cap mutual funds too
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- Union Budget may see spike in defence allocation amidst multiple triggers
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- While defence capex budget in FY26 was ₹1.80 trillion, the DAC has already approved proposals worth ₹3.17 trillion
- Against the overall defence allocation of ₹6.18 trillion in FY26, next year may see a 10-15% hike, led by defence capex
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- Index of industrial production (IIP) growth for Nov-25 bounces to 6.68%
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- This comes as a welcome relief after the -0.06% contraction in IIP in the previous month of October 2025 due to US tariffs
- November saw spike in domestic output, as well as exports normalizing as manufacturing led the bounce at 8.0%
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- UBS further raises its price target for gold in year 2026 to $5,000/oz
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- Spot gold is already trading at over $4,350/oz, so we are looking at another healthy year with 15% price accretion
- UBS expects central bank accumulation and a cut in Fed rates to give a boost to gold prices; reducing the holding cost
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- Banks shift to unsecured lending in Sep-25 quarter to boost profit margins
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- As a result, between September 2025 and November 2025, the average lending rate on fresh loans is up 32 bps at 8.71%
- There is a gap of 300 to 400 bps between secured loans like home loans and other unsecured loans given by banks
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- GST cuts propel passenger vehicle sales by 26% in month of December 2025
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- Year 2025 saw wholesale passenger vehicle (PV) volumes touching an all-time high of 4.55 million units on GST boost
- Growth in volumes was across the board, with SUVs enjoying the strongest traction; constituting 55.8% of PV value sold
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- PFRDA has allowed banks to sponsor and manage their own NPS funds
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- This is likely to boost competition, deepen institutional participation and improve the quality of services provided
- This adds another revenue stream for banks as they can not only distribute NPS, but can also manage the same
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- Sapphire Foods and Devyani Industries merge to create fast foods behemoth
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- The merger would be executed through a stock swap in which Devyani will issue 177 shares for 100 shares of Sapphire Foods
- This merger will bring the India franchises of KFC, Pizza Hut, and Taco Bell under the same fast foods franchise banner
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- Manufacturing PMI slipped to a 2-year low of 55.0 in December 2025
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- This is sharply lower than 56.6 reported in November, with the weak factory output attributed to US export tariffs
- Ironically, the slowing of output was despite a surge in order flows, but with low inflation it is still in expansion mode
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- ITC falls 15% in 2 days after the centre imposed 40% Sin Tax on cigarettes
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- Most of the leading brokerages with a buy call on ITC for its attractive dividend yield, have changed their stance to neutral
- Markets are worried that this spike in Sin Tax could lead to a revival of the illegal cigarette industry, further hitting margins
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- IPOs worth ₹2.50 trillion to hit the IPO markets in year 2026 on IPO mainboard
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- This would be sharply higher than the ₹1.76 trillion collected by IPOs in the calendar year 2025; as per Prime Database
- Among the big sized issues in 2026 will be Clean Max Enviro, Fractal Analytics, Hero Fincorp, OYO, Prestige Hospitality etc
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- Mumbai real estate buying hits 14-year high in 2025 at 1,50,254 registrations
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- Registration momentum is tilted in favour of premium priced properties above ₹5 crore, which were 7% of registrations
- Nearly 15% of the properties were in the 1,000 to 2,000 square feet bracket with just 3% above 2,000 SFT bracket
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- According to IRDA FY25 report, health was 41% of non-life insurance in India
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- In FY25, non-life insurance business touched a new milestone in terms of premium collections at ₹3.07 trillion
- However, non-life grew at a much faster pace than life insurance and even had much better all-India penetration
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- Hospitals sector to grow over 12% CAGR over next 5 years; CareEdge
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- This growth can be attributed to a structural shortfall of nearly 2 million beds and improved insurance penetration
- India has just 16 beds per 10,000 people, much lower than the WHO recommended average beds ratio of 30:10,000
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- Vodafone Idea to recover ₹5,836 crore merger-related dues from Vodafone UK
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- This will include ₹2,307 crore to be released in cash by Vodafone promoters and close to 328 crore shares earmarked
- VI had recognized ₹8,369 crore as receivables from Vodafone UK, of which ₹1,975 crore has already been paid to VI
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- Kalpataru Projects wins ₹719 crore Thane elevated Metro rail EPC order
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- Kalpataru Projects is an important player in the power (T&D) transmission & Distribution space as well as civil infrastructure
- This gives Kalpataru Projects a major opening in the fast-growing urban infrastructure business segment in India
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- For ecommerce; year 2025 was a big year of growth, but losses continue
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- Despite bigger carts, and over 12 million users, Indian quick commerce and ecommerce players continues to bleed
- While almost everything can be ordered online in India, lifestyle products, electronic and staples dominate the e-cart
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