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For Foreign Investors, India Is A Debt Story Right Now

In the last 10 days, FIIs have already invested over Rs 15,000 crore over close to Rs 20,000 crore in January, so Rs 35,000 crore in all, according to a report in PTI quoted by NDTV Profit

By Govindraj Ethiraj
New Update
Foreign Investors India Debt
On today’s episode, financial journalist Govindraj Ethiraj talks to Sheetal Sapale, Vice President at Pharmarack as well as Ajay Kedia of Kedia Advisory, a leading commodities brokerage based near Mumbai.

Our Top Reports For Today

  • (00:00) Stories Of The Day
  • (00:50) For foreign investors, India is a debt story right now
  • (03:12) Personal income taxes continue to power growth in tax collections
  • (04:15) Weight loss drug sales are running away in India, like elsewhere.
  • (14:15) How Photovoltaics and Automotive Industries Are Driving Silver Demand.
  • (23:08) Michael Jackson Music Catalog Valued At $1.2 billion.

NOTE: This transcript contains only the host's monologue and does not include any interviews or discussions that might be within the podcast. Please refer to the episode audio if you wish to quote the people interviewed. Email [email protected] for any queries.


India Is A Debt Story

Lot of inflation data is coming from the world over this week, including from India which is expected to be lower.

The last week saw equities drift down as neither the US Federal Reserve and the Reserve Bank of India, though the latter less so, did not cut or indicate that they were cutting rates right now.

This week also will see most of the remaining Q3 earnings which is the October to December period released.

In the last week, the Nifty fell 71 points to close at 21,782 while the BSE Sensex fell 490 points to close at 71,595.

Broadly mid caps and small caps are doing better.

The interesting trend is of course FIIs and their love for Indian debt.

In the last 10 days, they have already invested over Rs 15,000 crore over close to Rs 20,000 crore in January, so Rs 35,000 crore in all, according to a report in PTI quoted by NDTV Profit.

January was the highest outflow since June 2017.

On the other hand, they continue to sell equities net, selling Rs 3,000 crore this month atop Rs 25,000 crore last month.

The broader economic indicators are obviously looking better for FPIs right now. It of course helps that JP Morgan Chase & Co. in September last year said that it will add Indian government bonds to its benchmark emerging market index from June 2024, a move expected to attract  around $20-40 billion in the subsequent 18 to 24 months.

Meanwhile, the inflows were not strong enough to keep the rupee up, even with the trading band it usually stays.

On Friday, the rupee weakened 7 paise to close at 83.03 against the U.S dollar. It closed at 82.96 on Thursday.

Direct Tax Collections Still Strong

Net direct tax collection in the current year has now grown 20 per cent year-on-year to Rs 15.60 trillion, meeting 80 per cent of revised budget estimates for the full fiscal year.

Personal income tax collections are powering the growth with CIT at 9.16 per cent while for PIT, it was 25.67 per cent (PIT only).

"The provisional figures of direct tax collections continue to register steady growth. Direct tax collections up to 10th February, 2024 show that gross collections are at Rs 18.38 trillion, which is 17.30 per cent higher than the gross collections for the corresponding period of last year," Central Board of Direct Taxes (CBDT) said in a statement, reported in Business Standard.

Direct tax collection, net of refunds, till February 10 of FY24 stands at Rs 15.60 trillion, which is 20.25 percent higher than the net collections in the corresponding period last year.

Weight Loss Drugs Are Running Away

One in four adults in India is overweight today

Breaking it down further, some 22% of all males in India, 23% of females and 11% of children in India are overweight.

A wonder drug that addresses and brings down weight is now flying off the shelves in India.

So much so that the market share of semaglutide or Raybestos as it is called here, launched in January 2022, exactly two years ago, is now 66% of the value of all anti-obesity drugs.

It is not that there were no anti-obesity drugs earlier but the scale and impact is dramatic with this new set of drugs is at levels the world has not seen.

In the US, celebrities from Elon Musk to Oprah Winfrey have credited drugs like Wegovy and Ozempic, the American versions of Rybelsus which are available in India, for their contribution to their weight loss.

Rybelsus costs Rs 3,000 or so for a strip of 10 3 mg tablets that is actually used for treating Type 2 diabetes. Also, in India only tablets are sold while in the US, it’s in the form of an injectable. 

The manufacturer is Novo Nordisk, a 100-year-old Denmark headquartered company. 

The way Semaglutide works is It targets the brain centres that regulate appetite, especially after eating, which could slow down your eating. It also slows down how quickly the stomach empties, which makes you feel fuller for longer.

I reached out to Sheetal Sapale, Vice PResident at PharmaTrac and began by asking her how she was viewing the rise of weight loss medicines  

The impact of Semaglutide is at a level I have not seen and perhaps no one has and more so perhaps in the western world.

All I can add, knowing that there are people who are taking some version of Semaglutide in India and if you are listening than you know I know, is to do it under a physician’s guidance and not self administer the medicine.

The Silver Lining in Commodities

Global silver demand is expected to rise further in 2024, thanks to the continued strength of industrial end-uses and a recovery in jewellery and silverware demand.

The interesting part here. Photovoltaics (P.V.) and automotive industries will remain key drivers of growth this year.

Global P.V. installations significantly exceeded initial market expectations in 2023, with new capacity additions forecast to reach another record high this year, says The Silver Institute, adding silver offtake should also benefit from the technological breakthrough that has brought new, higher-efficiency N-type solar cells (with higher silver loadings) into mass production. 

Meanwhile, in the automotive industry, greater use of electronic components and investment in battery charging infrastructure will continue supporting silver offtake, said the Silver Institute.

Prices of gold and silver are of course linked to the interest rate environment and the more interest rates stay high, the less likely people will invest in these metals since they don’t offer any direct returns.

A precious metals analyst with UBS Securities told CNBC that "In a scenario where the Fed is easing, we think silver can do really well. It tends to outperform a move in gold," "Silver has been underperforming gold quite a lot. So there is a lot of catching up to do and I think the move could be quite dramatic.

I reached out to Ajay Kedia of Kedia Advisory, a leading commodities brokerage based near Mumbai to get an India and global perspective on where silver was going. I began by asking him how he was viewing the silver trends in the markets.


UPI Spreads Wings

Elsewhere, India's Unified Payments Interface (UPI) is set to be launched in Sri Lanka and Mauritius on February 12, adding to the growing list of countries where the payments system is either acceptable or linked to their own fast-payments network.

In addition to the UPI, RuPay card services will also be launched in Mauritius.

"Given India's robust cultural and people-to-people linkages with Sri Lanka and Mauritius, the launch will benefit a wide cross-section of people through a faster and seamless digital transaction experience and enhance digital connectivity between the countries," the Indian government said in a statement on February 11.

Michael Jackson Music Catalog Valued At $1.2 billion, Sony To Buy 50%

Michael Jackson may have died almost 15 years ago in 2009 at the age of 50 but his music catalogue and music still commands a strong valuation.

Sony Group is acquiring a half interest in pop star Michael Jackson’s music catalogue from the late singer’s estate for at least $600 million, Bloomberg has quoted Billboard as reporting, saying it’s the largest such deal ever.

The assets include ownership of master recordings and publishing for Jackson’s share of his songs, as well as the Mijac catalogue. Jackson’s estate had earlier sold its half interest in Sony/ATV Music Publishing, a joint venture that included the Beatles songs.

Jackson left an estate worth hundreds of millions of dollars but large debts to work out. According to Billboard, a new biographical movie on the singer, titled Michael, is scheduled for release next year.