## India’s Economic Pulse: Nifty Soars, Urban Demand Slows, Swiggy IPO Looms
As the Indian financial year transitioned from Samvat 2080 to 2081, the stock market delivered impressive returns. The Nifty50, a benchmark index for Indian equities, surged nearly 25% in the past year, fueled by consistent GDP growth, robust corporate earnings, and ample liquidity. Tata-owned Trent emerged as the top performer, registering a remarkable 186% rise. However, despite this positive performance, analysts remain divided on the Sensex hitting the 100,000 mark by March 2025.
While 47% of analysts surveyed expressed optimism, citing continued economic growth and robust corporate earnings, 53% remain cautious, citing global challenges as a major concern. The Union Finance Ministry’s economic review for September, released during the Diwali week, highlighted a concerning trend – softening urban demand. This moderation in consumer sentiment was attributed to factors like rising inflation and geopolitical uncertainties.
The urban trend diverged from the rural trend. In 2023-24, rural demand was impacted by poor monsoon rains. Urban consumer goods sales, however, showed a 11.5% year-on-year increase in Q2 FY25, compared to 14.5% in rural and semi-urban areas. Auto sales also exhibited a downward trend, falling 2.3% in the April-September period, primarily due to weak sales in the second quarter. Housing sales and launches have also experienced a decline.
The economic review further flagged potential risks from global market volatility and geopolitical tensions, which could further dampen household spending and economic growth. Despite the challenges, the upcoming IPO of Swiggy, the food delivery and quick-commerce platform, has generated significant buzz. Swiggy’s 11,300-crore IPO, set to open for subscription on November 6th, is expected to see its early investors, including Accel, Apoletto, Elevation Capital, and Norwest Venture Partners, cash in on substantial gains.
The company aims for a valuation of $11.3 billion, a slight increase from its previous $10.7 billion valuation. Accel is projected to make a 35x return on its investment, followed by Elevation Capital’s and Apoletto Asia’s 34x and 26x returns, respectively. The IPO will include a fresh issue and an offer for sale (OFS) by existing investors. Other prominent investors like Tencent, Alpha Wave, Coatue, Prosus, and Meituan are also participating in the OFS.
Meanwhile, the Indian steel industry received some relief as the recent surge in steel imports has come to an abrupt halt. Key exporting countries like China and Vietnam are facing compliance issues due to new Indian import regulations. Stricter import norms, including mandatory BIS certifications, have significantly reduced the number of Chinese steelmakers active in the Indian market. Vietnamese steelmakers are also facing challenges, with an ongoing anti-dumping investigation further hindering their exports to India.
This combined pressure from regulatory hurdles and trade disputes has led to a decline in steel imports, providing much-needed relief to the domestic steel industry. The influx of cheap, often substandard steel had eroded profit margins for domestic steel producers.
On a positive note, the Prime Minister’s internship scheme continues to attract participation from businesses across India. Chennai and Bengaluru emerge as the leading cities offering the most internships, followed by Gurugram and Hyderabad. Maharashtra, however, offers the highest number of internships overall. The top five sectors for internships include oil and gas, automotive, travel and hospitality, BFSI, and metals and mining.
Several prominent companies, including Jubilant Foodworks, Eicher Motors, Larsen & Toubro, Tech Mahindra, Mahindra & Mahindra, Bajaj Finance, and Muthoot Finance, are offering internships under this scheme.
A recent YouGov-Mint-CPR Millennial Survey conducted in July 2024 reveals a concerning trend among urban Indians. Nearly a quarter (27%) of respondents find it difficult to understand food nutrition labels, with the share being higher among residents of smaller cities. A regional analysis shows respondents living in South India finding it most difficult to comprehend these labels. This lack of understanding about food nutrition labels raises concerns about informed food choices and overall health awareness.
