On Episode 979 of The Core Report, financial journalist Govindraj Ethiraj talks to Pranav Haldea, Managing Director at Prime Database as well as Atanu Mukherjee, CEO at Dastur Energy.

SHOW NOTES

(00:00) Stories of the Day

(00:50) AI Stocks Take A Dive Following Slow-Down Appeal From Anthropic CEO

(06:04) Tata Sons and the RBI

(07:51) Big IPO Week Ahead, What Is Standing Out In The Rs 100,000 Crore Rush?

(17:10) India Invites Companies To Set Up Coal Gasification Plants, Why Is This Critical?

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NOTE: This transcript contains the host's monologue and includes interview transcripts by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on feedback@thecore.in.

Good morning, it's Tuesday, the 15th of September and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital and our top stories and themes…

AI stocks take a dive globally following a slowdown appeal from Anthropic's CEO.

August inflation rises to 4.8 percent.

Inflation has risen for the 10th month in a row.

It's a big IPO week ahead. What is standing out in this 100,000 crore rupee rush?

India has invited companies to set up coal gasification plants. Why is this critical at this time?

Markets, AI Stocks, Inflation and Oil

Indian markets were closed on Monday because of Ganesh Chaturthi but the global markets are open and on tenterhooks once again. AI-linked stocks across the globe plunged on Monday after founders of the biggest AI companies warned of risks from rapid development. Anthropic's CEO Daryo Amodei in a lengthy essay posted on social media on Saturday, which we also reported yesterday, called on AI companies to slow the rate at which they advance model capabilities amidst mounting fears of misuse of artificial intelligence.

Elon Musk and Sam Altman, founders of XAI and OpenAI, said they agreed with him. Altman also said the company would not proceed with an IPO this year citing safety concerns. The market saw this as an opportunity to re-scrutinise AI-related stocks including companies who've relied on debt and circular financing to fund their AI growth.

If the AI race slows down materially, the key question becomes who pays for all the infrastructure? The leases, debt, and power commitments remain even if expected compute demand and revenue growth slow and that could bring credit risk increasingly into the AI story, a senior analyst at SwissCorp told Reuters. So amongst the stocks that fell, Nvidia was down three percent, advanced micro devices close to six percent, SpaceX about 2.6, and European tech stocks fell as well, so did in Asia OpenAI's investor SoftBank which fell about 13 percent, TSMC 1.2, and South Korea's SK hynix 6.3. And China has criticised those warnings from the US technology founders to put brakes on AI development. A Chinese foreign ministry spokesperson said at a briefing in Beijing on Monday that fear-mongering confrontation and competition will only disrupt the process of global AI governance and serve the interests of no one.

He said that the development of AI bears on the common well-being of all humanity in response to a question on calls to slow frontier models and claims that a Chinese advantage in AI could pose a grave danger to the world. Just last week, Chinese President Xi Jinping at the BRICS summit in New Delhi said China will take the lead in establishing a BRICS AI open zone to promote cooperation on large-language models, AI training, and an open AI ecosystem. Back home, FIIs have sold close to a billion and a half dollars this month so far after being net buyers in July and August.

The Nifty 50 index has now fallen about 10.5 percent this year, and the Sensex has fallen about 12 percent. Elsewhere, the Securities and Exchange Board of India on Saturday proposed a review of how settlement prices for index and stock derivatives are determined. On expiry date, there has been much feedback and criticism on this move, though so far the SEBI has stood behind its actions.

The plans were unveiled in a consultation paper laying out changes to the newly launched Closing Auction System, or CAS, that has led to sharp market swings on the same days that they were derivatives expiries. In the real world, India's retail inflation has accelerated to 4.82 percent for the month of August 2026, for 4.45 percent in July, as food prices, among other components of the consumer basket rose, according to data released on Monday. Inflation has now been rising for 10 straight months.

Rural CPI inflation was at 5.23 percent compared to 4.3 for urban areas. Food inflation is now at about 5.95 or just under 6 percent for August compared to about 5.5 percent last month. A Reuters poll of economists had projected retail inflation at 4.8 percent for the month.

Wholesale price index or WPI-based inflation also rose 9.92 percent year-on-year for August compared to 9.78 percent in July. Meanwhile, the bad news on oil prices is never-ending as they continue to surge, which of course affects all the data points that we've just spoken of and in turn puts considerable pressure on the overall economy. Prices continued their rise, going up more than 3 percent on Monday, following fresh strikes on Saudi Arabia's energy infrastructure and attacks on ships between the United States and Iran.

Brent crude futures were at about $107.60 per barrel on Monday morning, having touched about $108.60, so just under $109, according to Reuters. Incidentally, oil prices have risen about 9 percent higher last week, and the rally has also taken U.S. diesel prices at the pump more than $6 a gallon for the first time, something that we've touched on before. And interestingly, this has led to a plea from U.S. President Donald Trump to Ukraine to stop attacking Russian diesel infrastructure, so you can see what is influencing prices elsewhere in the world.

Speaking about Trump, will the U.S. Federal Reserve Governor Kevin Walsh give in to him, who wants interest rates to be kept low? Apparently, Walsh dislikes giving any guidance about the likely path of U.S. interest rates, but elevated inflation, $100 plus a barrel oil, and his own emphasis on the need to deliver price stability and to pay attention to signals from financial market pricing appear to leave little doubt about what's next, says a Reuters report. But on the other hand, he may not do any of this. The Fed will announce its policy decision at 2 p.m. on Wednesday local time.

Tata Sons and the RBI

Meanwhile, more developments in the Tata Group, even as the Reserve Bank of India last week rejected an application made by its holding company Tata Sons for the voluntary surrender of its certificate of registration for being classified as an unregistered core investment company. What that leads to is Reserve Bank advising Tata Sons to take steps to ensure full compliance with all guidelines instructions applicable to what is known as the non-bank finance company upper layer or NBFCUL. Now, all NBFCs in this category, and that's really the news, have to be mandatorily listed within three years from their classification by the Reserve Bank of India.

So unless Tata Sons gets a stay from the judiciary against this RBI decision, it'll have to list its shares in a stock exchange. There were about 15 NBFCs under this category, with two from the Tata Group, Tata Capital and Tata Sons, according to a CNBC-TV18 report. All except Tata Sons have complied with the mandate either by directly listing or through mergers and reverse mergers.

And this includes Aditya Birla Finance, Sriram Transport and Piramal Capital. Now, all of this obviously becomes relevant and important given the leadership transition that's in process right now, with N Chandrasekharan chairman having said that he does not want to be considered for reappointment. Among other leadership transitions, HDFC Bank has submitted two candidates to the Reserve Bank of India for the role of its CEO, thus starting the succession process for Shashid Jagdishan, who is due to retire later this year.

The names have not been disclosed, but there is of course considerable speculation about who they could be. All private sector banks in India have to get prior Reserve Bank of India approval before they appoint their managing director and CEO.

Notable IPOs this Week

It's a shorter trading week this time as markets reopened today after a holiday on Monday, but there has not been any rest for the IPO walas.

Five main board and six SME IPOs worth about 24,500 crore rupees are scheduled to open for subscription this week. And this of course includes the much awaited, discussed and debated NSC or National Stock Exchange's roughly 22,500 crore IPO, which will obviously lead the charts, also representing more than 90% of the value of issues opening this week. At 24,500 crores, this would be the highest since October 2025, when issues worth about 29,000 crore rupees hit the market during the week, as per a report in Economic Times.

Among other main board offerings, Hero Motors will raise about 1,000 crores, while SS Retail and Jindal Supreme India will raise 525 crores. Some 10 main board companies are also set to list this week. I reached out to Pranav Haldea, Managing Director of Prime Database, the IPO data intelligence tracking firm, and I began by asking him that with the total of IPO raising set to go past 100,000 crore rupees this year, how was he seeing this flood? And if there were any trends within this that was perhaps different from before.

INTERVIEW TRANSCRIPT

Pranav Haldea: Yes, you're absolutely right. If you look at the calendar year figures now with the NSE IPO, we would only stand at 81 IPOs for this year and a total of 1.04 lakh crores already raised, which would make it only the fourth best year on record with of course another, you know, three and a half months to go. Even on a calendar year, on a financial year basis, you know, we would now have 63 IPOs raising over 85,000 crores.

The flood of IPOs is continuing in terms of number and in terms of volume. On the supply side, you know, as we've seen over the last couple of years, extraordinary number of filings taking place, right? Even as we look at the data today, there are 155 companies which already are holding SEBI approval looking to raise close to three lakh crores and another 71 companies which are awaiting SEBI approval looking to raise another one and a half lakh crores.

So, you know, the supply of companies is tremendous. At the same time, like I've been saying, this is not an easy market. This is not a seller's market.

It is not that any kind of company with any kind of valuation can come and do a successful IPO. As you've seen with several IPOs in the last two, three months, they've either had to, you know, reduce their issue size or cut down on their valuations. Some companies have also decided to completely defer their IPOs to a later stage as well.

You know, investors are discerning and it's not that everything is flying. But on the demand side, you know, that's on the supply side. On the demand side, of course, what is really fuelling this is, you know, the domestic mutual funds.

And one thing which has remained consistent over the last, you know, two, three years is the steady inflow of money coming in from Indian retail investors through SIPs who continue to, you know, hold the faith. And Govind, I'm sure you remember, I mean, 10 years back when FIIs used to pull out the way they had, markets used to correct 10, 15, 20 percent. So while, there has been, of course, a lot of volatility on account of what's happening geopolitically, you've not seen that kind of a steep correction.

And that's only because of the support which has been provided by retail investors, not just in the secondary market, but also in the primary market where you see domestic mutual funds now increasingly playing a much larger role than earlier. Of course, a lot of smaller IPOs you're seeing, you know, just going through on the support of domestic investors alone without foreign participation. That's something which been changing over the last couple of years.

Govindraj Ethiraj: Are you seeing any trends in terms of the kind of companies, their vintage or the industries they're in and any commonalities or any common factors?

Pranav Haldea: Well, I think, you know, we've probably spoken about this earlier as well. Over the last couple of years, what you've really seen is, you know, a broad basing of the kind of companies that you're seeing coming to the IPO market. On one hand, you have the traditional promoter-controlled family-owned businesses in industrial and manufacturing sectors.

On the other hand, you have, you know, the new-age tech companies, of course, enough has been said about them. Then you also have various MNCs, which are looking to list their, you know, substitutes. So there's a good mix of companies.

This is in terms of ownership, of course, but also in terms of sizes, in terms of sectors, while of course, new-age sectors like clean energy and tech, you are seeing issues from there as well. But like I said, a lot of industrial manufacturing, traditional companies also come to the market.

Govindraj Ethiraj: Right. And if you were to look at how some of these or many of these IPOs have done, particularly in the last year or year to date, how would you rate their performance in terms of where they stand vis-a-vis their listing price or their offer price rather?

Pranav Haldea: I've noticed whenever you look at the historical data is that after you have a bit of a pause in the IPO market, like the kind that you saw this year as well, between March up until June, the initial set of IPOs, which, you know, get launched tend to be priced more conservatively and hence you see better performance on listing and subsequently as well. So even if I look at this financial year data, you know, listing gains on an average are only at 20%, which is usually up from, I think it was about seven or 8% last year. So you are seeing good listing pop and of course, subsequent, you know, positive performance as well.

At the same time, my view, of course, always remains that I don't think it's fair to judge IPOs up until future arbitrary point in time, which will be three months, six months, a year, two years. I think if you have to get a sense of the IPO valuation, one should probably restrict themselves to the closing price on listing day. And the reason I see that is that, you know, on the day of listing, you know, of course, we know that during the IPO, you don't have too much control on the price.

The price has been discussed, you know, decided between the issuers and the bankers. There are certain allocations. So in terms of how much you want to buy, you're restricted in that as well.

But on the day of listing, it becomes widely available for trading by all kinds of investors, retail institutions. And hence, by the end of closing day, you get a good sense of how the IPO was priced. But beyond that, I think an IPO company like any other listed company becomes like a regularly traded stock whose share price would go up and down on the basis of, you know, various company announcements, how financially well or poorly it's doing and how the broader market and economy is doing as well.

Govindraj Ethiraj: Which I guess brings me to the next question. So what is then a good time frame to judge an IPO in your estimation?

Pranav Haldea: Like I said, you know, I think only the day of listing and that's when all analysis about the IPO price should start. Beyond that, it becomes like any of the 2,500 already listed companies on the stock market, whose share price will go up and down on the basis of how the company is doing. For example, you know, just look at what's happened geopolitically.

So it would be unfair for us to say that, you know, while this mayhem is happening in the secondary market, the IPO company should still continue to trade in the positive, you know, at any point in time that we pick. I think that's a bit of a historical baggage we carry from the CCI days when price was controlled and all IPOs were supposed to be chart busters.

Govindraj Ethiraj: Or what you're saying is then analyse companies individually and as per sectors and so on. And then yeah, if they do well, they do well. Right.

So just to come back to the pipeline that you're seeing ahead, given how things are, do you get a sense that this pipeline will materialise or how much of it could materialise?

Pranav Haldea: You know, primary market or the IPO market always follows the secondary market. I've been saying this often enough that even right now, even though the pipeline is extremely strong, in case you were to see a big correction on account of what's geopolitically with the oil prices, et cetera, you may see several issues getting postponed. And this is again, not going to be anything new.

You've seen this in the past as well that, you know, for a company, an IPO is a once in a lifetime event and they would ideally like to launch when things are relatively stable, if not bullish. And hence, as you've seen in the past, several companies just choose to defer their IPOs to a future date rather than launching it at a time when valuations may not be conducive to them or markets are extremely volatile.

Govindraj Ethiraj: Right. So would you say that from a retail investor point of view, people are still bullish towards IPOs or are they more, let's say, lukewarm as compared to before?

Pranav Haldea: So, you know, retail investors, there was a study also with SEBI came out with two, three years back, which analysed IPO investors behaviour, including retail investors. And what it generally showed was that 60, 70% of investment by value of retail investors is out within a week of the IPO listing. You know, that tells you that most retail investors are coming in for listing gains.

And that in itself is not a bad strategy as long as, you know, you also exit in case it lists at a discount. But, you know, you are seeing a huge amount of traction from retail investors right now. I think last I checked, the average retail applications were at 22 lakhs for this financial year.

And that kind of correlates with the listing gains that you see. So when listing gains are good, you will see tremendous interest from retail. But when that doesn't happen, you will start seeing building interest.

Govindraj Ethiraj: So what is 22 lakhs? Can you define that?

Pranav Haldea: That is the average number of retail applications per IPO.

Govindraj Ethiraj: Right. Pranav, thank you so much for joining me.

Pranav Haldea: My pleasure. Thank you.

Applications for the Governments Coal Gasification Scheme

The government's 37,000 crore scheme to promote coal and lignite gasification has received seven applications in its first bidding round, with Adani Enterprises submitting bids for three projects aimed at producing urea, according to the Ministry of Coal, which issued a statement last week. The other applicants include NTPC, Talcher Fertilisers and companies Gallant, Ispat and Shyam Cell and Power. The state-owned NTPC has proposed a synthetic natural gas project, while Gallant, Ispat has applied for a project to produce direct-reduced iron or DRI and syngas.

And the response comes after there were several reports flagging concerns over the ability of this gasification programme to attract bidders. And the government has said that the seven applications represented a vote of confidence in the scheme and in India's coal gasification mission. So with all the big names now coming in, does this mean that coal gasification is seen as a more industrial investment proposition as opposed to a policy-led initiative? I reached out to Atanu Mukherjee, CEO of Dastur Energy, and I began by asking him why the coal gasification contract was important in the context of India's energy requirements.

And I also quizzed him about how he was seeing overall crude oil flows in the context of the continuing war in West Asia.

INTERVIEW TRANSCRIPT

Atanu Mukherjee: So if you look at the government's objective and incentives to drive the coal gasification scheme has got to do with looking at how we can substitute imports of different kinds of chemical and related commodities into India to the extent that we can based on local endowments that we have. And unfortunately most of the chemical and oil related commodities are imported in India and so the only endowment that we have in terms of creating these kind of molecules is through our only endowment which is coal. And so the idea was essentially look at the local and national endowment of coal and see if we can convert coal into these kind of different molecules which are useful and used in the society.

And the coal gasification scheme essentially is a direction in terms of how we can use the right kind of technology to convert coal into different kinds of chemical commodities through a route in which coal is converted to something called syngas. So it gives you energy security, gives you energy resilience, it makes you substitute imports, gets down pay deficits right based on that and suddenly makes you much better in terms of an overall macroeconomic perspective and GDP resilience. Right.

Govindraj Ethiraj: What is the pathway for some of these private companies or other state-run companies as well to participate in this? I mean what would they be exactly doing and why is the government involved in this directly as opposed to any other let's say power generation or energy project?

Atanu Mukherjee: Right. So I think it's important to understand that coal gasification is a technology which is new to India. You know it's been there in the world for a long time since World War II in Germany, but it's new to India and to incentivise enterprises, businesses to adopt this from a business perspective would require incentives to drive them forward in terms of investing into coal gasification technologies and kick-starting the whole process.

So that's basically the basic driver in terms of creating viability gap funding which enables different enterprises who are interested and incentivised to invest into coal gasification-based technology to produce different kinds of chemical and molecular products which can generate a corresponding market going forward.

Govindraj Ethiraj: Right. You talked about syngas for example. So the potential output of the project or projects as we know today, what would it be and to what extent would it substitute let's say other fossil fuel that we are using?

Atanu Mukherjee: So if you look at coal, when you convert coal instead of burning it as we do today, if you convert coal you convert to syngas which is an intermediate gas which is composed of something called carbon monoxide and hydrogen and syngas is the basis of production for all kinds of different commodities, right, all kinds of different chemical commodities. So for example, the major ones like urea, I can convert what you call coal through coal gasification to urea through the syngas route. I can convert coal using coal gasification into ammonia.

I can convert coal through syngas route, right, into other products like synthetic natural gas, SNG as they call it, which is a substitution for the LNG that we import, right. I can convert coal gas, you know, coal through coal gasification into methanol, you know, which we largely import today. So there's a wide variety of what you call chemicals and chemical derivatives and molecular products that I can create using coal gasification which leads to the substitution because today if I look at urea, I import a lot of urea and whatever urea I produce today within India, I have to import natural gas because it is a natural gas based production process.

So I spend a lot both from a security and a price perspective on natural gas. Natural gas I import to LNG, right, and so if I can produce SNG, I can substitute that. So there's a wide variety of what you call areas depending upon the market size and profitability and the economics that you can, you know, substitute to a large degree with coal gasification based products.

Govindraj Ethiraj: Right, and what would be the timeline? So let's say projects get off the ground now, how long does it take to get a plant going and output also going?

Atanu Mukherjee: So I think coal gasification projects, depending upon the geography, depending upon the type of polio guard, depending upon the technology and how it's adopted and how fast it's done, typically, you know, you would expect a reasonably sized gasification plant in India from start to finish to be between four to five years, right, in terms of completion. Smaller projects may take less time, you know, so that may be three years, but four to five years is reasonable. Obviously, it can be more depending upon the complexities and the scale, but that's kind of like just an indicative figure.

And when I say reasonable, I mean something which can gasify two to three million tonnes of coal in a gasification plant, that's a reasonable size. A small size is probably a million tonne and sub-million tonne size, and mega sizes, of course, five to eight million to 10 million tonnes. So hopefully that gives an idea of what the timelines are.

Govindraj Ethiraj: And would these plants be located near coal pits or coal heads, typically?

Atanu Mukherjee: Yeah, so to make it more attractive from a logistic and movement perspective, it probably makes sense to locate them in regions where it is coal rich in terms of coal mine melts and availability. So if you look at the current protocol direction in terms of the projects that are coming up, typically one is the Orissa, you know, Mahanadi coal field belt, that's one area. The second is Chhattisgarh, right, that is another area where you've got a lot of coal deposits and mine melts.

And the third, which is a better quality of coal, is in the western India, which is in the Wardha, Nagpur, that region. So those are three main clusters, right, of coal concentration for India, right. And Lignite, of course, is down south, mostly in Tamil Nadu and Andhra.

So that's the kind of thing. And so the coal gasification plants will generally come up in these regions close to the mine melts from a logistical and transport and, you know, and production perspective.

Govindraj Ethiraj: Got it. So since we've spoken last, there have been several rounds of resurgence in the hostilities in West Asia, because of which, obviously, oil and gas prices have gone up and we've again seen crude go past $105 per barrel. So how are you seeing this broadly in the more sort of macro context of demand and supply right now?

In terms of what's changed or what's not?

Atanu Mukherjee: Yeah, like I told you last time, you know, the world is much more resilient in terms of a supply system to oil and gas shocks compared to what it was 30 years back, right. So if you look at the nature of the shocks that was there this time, 20 million barrels approximately, right, getting kind of like disrupted, quite frankly, you know, it did not disrupt, right, the supply side that much, not significantly. And a lot of things have got to do with obviously how China adapted in terms of using its reserves, how some of the oil was rerouted, right, instead of foremost through the pipelines to Saudi Arabia and Red Sea and, you know, UAE through the pipelines, how new sources became more available from Guyana to Western Canadian select.

So if you combine all these things together, net effect was not that significant as it should have been for a 20 million barrel though. That's a big shock if you look at the number, right. So the resilience in the system is much more today than it was, you know, 30 years back.

Going forward also, though there will be obviously volatilities of going to $107 as it is now, I think, you know, and coming down, but it is unlikely that you will have $150, $170, $180 per barrel that a 20 million barrels shortfall will predict. So bottom line going forward, it is unlikely that you will have significant deviations, right, from, you know, $1,800, $1,900, you know, except for occasional spikes maybe towards sustained levels of high price because of the resilience in the supply chain of the global oil and gas system as it has evolved over the past 30 years. So that's what I think is going to be going forward too.

Govindraj Ethiraj: Okay, Atanu, thank you so much for joining me.

Atanu Mukherjee: Thank you.