On Episode 885 of The Core Report, financial journalist Govindraj Ethiraj talks to Vishwas Chitale, fellow at the Council on Energy, Environment and Water (CEEW) as well as Amol Bansal, Founder and CEO at BK Saraf Jewellers.

SHOW NOTES

(00:00) Stories of the Day

(01:31) India falls behind Taiwan in market capitalisation

(05:22) Coal-fired power plants are running dangerously short on coal

(07:06) Is India better prepared for heatwaves?

(15:36) Can a native solution to monetize 25,000 tonnes of gold in homes work?

(26:43) Ferrari shares fall after it launches an electric car

(27:51) Who buys a watch to see the time

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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 Wednesday, the 27th of May and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital.

Our top stories and themes…

India falls behind Taiwan in market capitalisation.

Coal-fired power plants are running dangerously short on coal.

Is India better prepared for heatwaves this time?

Can a native solution to monetise 25,000 tonnes of gold in homes work?

Ferrari shares fall after it launches an electric car.

And who buys a watch to see the time?

Markets, The War, Taiwan and Quad

The West Asia peace talks, if so, appear to be proceeding with each side evidently justified in its position that you cannot trust the other. The US carried out what it called defensive strikes in southern Iran, even as Iran said it fired back and downed a Reaper drone and also said it had a legitimate right to respond to any ceasefire violation.

The strikes came hours after Iranian negotiators met with Qatari mediators in Doha for talks in coordination with the United States. US and Iran are apparently working towards a memorandum of understanding but disputes over language concerning Iran's nuclear programme and sanctions have held up a deal, according to CNN. And as talks continue, US Secretary of State Marco Rubio said on Tuesday that negotiating a deal with Iran would take a few days.

Now we've all heard all of this before, but more importantly markets appear to be adjusting faster, less to disappointments and more to positive signals, as has generally been the case. Oil prices were of course up, Brent crude futures were about 4% up at about $99.60 a battle, so still under $100. Indian markets were down but depends on which markets you were tracking.

Mid-cap stocks were ruling with the nifty mid-cap 100 index hitting a record high on the National Stock Exchange in Tuesday's intraday trade, thanks to power and metal. Of course, if there are any stocks that should do well, it's power given the rising gap between supply and demand and more on that shortly. In the past month, the nifty mid-cap 100 index has outperformed the market, gained 3.4% as compared to a 0.1% decline in the nifty 50.

And since April, the mid-cap index has risen almost 18% as against a 7.8% in the nifty 50 again, according to a report in the business standard. On Tuesday, the nifty 50 and sensex were down and the nifty 50 ended 118 points down at 29,913 and the sensex was down 479 points at 76,009. In the broader markets, the nifty mid-cap was up 0.5% and that was of course after that new record high and the smell cap was up 0.35%. Taiwan has overtaken India in stock market value, thanks to a rally in stock prices of Taiwan's semiconductor manufacturing or TSMC, also the world's largest chipmaker.

Taiwan's market capitalisation is now at $4.95 trillion as of Monday, according to Bloomberg data, while India has dropped to $4.92 trillion. Taiwan's stock market is now the fifth largest in the world, behind only the United States, mainland China, Japan, and Hong Kong. TSMC, that's one stock, accounts for 42% of Taiwan's index and is up 46% this year.

The rupee on Tuesday fell as crude oil prices rose as we just spoke. It was down 0.5% to close at 95.68 per dollar, that's still under 96 rupees, after rising for three sessions. Elsewhere in Asia, Malaysia has imposed a 10% import duty on some gold bar shipments, according to Bloomberg, which quoted traders and said that this would disrupt the bullion trade in the Southeast Asian nation.

India, of course, has already imposed 15% duty on gold and silver, or rather raised duties to 15% on both gold and silver. On the geopolitical front, foreign ministers of Australia, India, Japan, and the US agreed to jointly build a port in Fiji in the Pacific Islands and signed pacts covering critical minerals and energy security as they sought to inject fresh energy into the Quad grouping, according to a Reuters report. This was the third such meeting since September 2024 and included Australia's Penny Wong, India's S.J. Shankar, Japan's Toshimitsu Motegi, and US Secretary of State Marco Rubio, who's been in India for the last three days.

The four-nation grouping had lost some momentum last year after failing to summit after tensions increased or rose between US President Donald Trump and India's Prime Minister Narendra Modi over Washington's tariffs and other matters, according to that Reuters report.

Can India meet its Power demand with Coal?

The government-owned Coal India has asked its subsidiaries to ramp up coal supplies to power plants to avoid shortages as power demand hits a record high following intense heat waves, according to a Reuters report. Several regions across the country are already facing power cuts, particularly at night, when renewable power, mostly solar, is not available.

The report says that as many as 21 power plants have critically low coal stocks, only enough to meet less than a week's demand, according to latest data from the Central Electricity Authority. And therefore, Coal India has now directed its subsidiaries to maximise dispatches using all transport modes, including rail links that move coal directly from mines to power plants. India's peak power now hit a record of 270.8 gigawatts or almost 271 gigawatts last week.

India has roughly 228 gigawatts of non-fossil fuel capacity, but coal still accounts for 70 percent of India's power generation. Coal India and its eight subsidiaries account for about 80 percent of India's coal output, and it had held about 168 million tonnes of coal, including about 47 million tonnes at power plants, which was sufficient to meet 19 days of consumption. Meanwhile, India's refiner's crude throughput fell about 9 percent month-on-month in April to about 5.2 million barrels per day, provisional data from the government showed on Tuesday.

According to Reuters, India is the world's third biggest oil importer and consumer. On a year-on-year basis, refinery throughput slipped by about 2.2 percent in April. Consumption, though, was higher in April compared to March, as we had reported earlier.

How has Heatwaves affected Labour in India?

Temperatures are touching 46 degrees Celsius in many parts of India, and notably in small factories in industrial clusters in states like Uttar Pradesh, for instance, machines are now running without pause. At some of these factories, workers pause every hour for water, briefly step into shaded corners and return to work, fans and coolers run continuously, and so does the electricity metre, according to a Business Standard ground report, which quoted the owner of a pulp moulding unit in Muzaffarnagar, saying worker productivity dips during extreme heat to around 80 percent. Moreover, says that report, for manufacturers like him, extreme heat is no longer just a seasonal inconvenience or worker welfare concern, but increasingly a hidden operating cost to lower worker efficiency, higher cooling expenses, and of course, rising electricity consumption.

The World Bank has estimated that rising heat and humidity could put up to 4.5 percent of India's GDP at risk by 2030 through loss of labour hours. The International Labour Organisation, or ILO, according to that Business Standard report, has also projected that by 2030, more than two percent of total working hours globally could be lost each year because it's too hot to work. So the question that we are asking is that are we better prepared this time, or were we better prepared this time around, since we had advanced warning of these heat waves, and we've also experienced it in recent years, and how are businesses and local authorities responding or have been responding to manage the fallout of extreme heat? I reached out to Dr. Vishwas Chitale, fellow at the Council on Energy, Environment, and Water, or CEEW, and I began by asking him whether our pace of response this time was better than before.

INTERVIEW TRANSCRIPT

Dr. Vishwas Chitale: So, like you know, very quickly, I would like to reiterate the scale of the problem. In 2025, we published a study on India's district level risk to extreme heat, which talks about nearly 57% of districts in India, which host three-fourths of India's population are facing high to very high risk to extreme heat. So that's where we are.

In terms of numbers, we have 23 heat wave prone states in India out of our 36 states and UTs. So that's where again, like, you know, the overall stats shows us the reality or the starkness of the reality. Now, when it comes to response, I would like to answer it in two ways.

One is, of course, this year is pretty similar to what we saw in 2024. While 2025 was when we had on and off rains, and maybe like, you know, people just forgot about heat waves, and there was no talk about it at all. While in 24, if you recall, in the month of May, we had almost 10 states declaring heat waves at the same time.

And this year, we are seeing similar situation right now also like three plus states have declared heat waves in various parts of the country. So it's pretty similar to that. It is linked with many other climatic factors.

Of course, this year being El Nino year, we are already seeing that monsoon is going to be below normal, heat is already getting prolonged, etc. But in terms of response, this year, I felt that already starting from January or February, many cities had started putting out alerts, IMD had started putting out early warnings based on their seasonal forecast of heat. And there was a lot of proactiveness in terms of putting out forecasts and making people aware that this year is a little bit harsher compared to earlier years.

So that started happening in February itself. In terms of action at city scale, at CEW, we run a programme called National Urban Heat Resilience Programme, in which we support nearly 300 cities in India to develop heat action plans. And in that mission, so far, we have reached 245 cities across various states in India.

So also what my personal observation is, during this year, like if we compare with say January onwards, there was a lot of proactiveness from the cities as well to either launch the heat action plans, or either pick up some sort of implementation case for cooling shelters, or for cool roofs, etc. So we saw a much better awareness and at least a much better acknowledgement of the issue, which is also very important in this case.

Govindraj Ethiraj: Right. Okay, so let me split that question now into two parts. One is how are you seeing this in terms of impact on labour productivity?

And what is the response been or should be from manufacturing in general, and maybe small enterprises who are typically more exposed to, let's say extreme conditions. And the second, of course, is the cities that you talked about, where you're saying that definitely the pace of response was better than maybe 24.

Dr. Vishwas Chitale: Correct. Yeah. So in terms of impacts on manufacturing industry or industry as a whole, we have been referring to some of the research where it says that in 2023 alone, India lost nearly 181 billion potential labour hours due to heat exposure, which means that either those hours were not suitable for people to work in those conditions, because of red alert, or because of orange alert, or the working conditions were so harsh, that people actually had to stop working. And then even if there was alert or not alert, they were not working there.

So these kinds of potential labour hours were lost in 2023 alone. This year, again, like you know, we are seeing that many of these kinds of statistics are coming along and in terms of SMEs or SMEs, which are even much more vulnerable to any climate shock, these kind of statistics or these kind of impacts affect their economic viability or economic sustainability quite a bit. So if we just put it in perspective, MSMEs, which are run from household level businesses, or even very small scale businesses, do not have any sort of cooling facility at all.

And that's where the real challenge lies. Like, okay, just by drinking water, it's not going to solve the problem. While many of the large scale industries like I can also definitely cite an example of Aditya Birla group or Mahindra group, where they have been able to establish cooling shelters within their industrial units within their assets.

And in some cases, also, like some of these large groups, again, Aditya Birla and Mahindra, that's what I am aware of, are actually calling for compulsory breaks for shop floor and for people who are working in manufacturing jobs to take some break of 15 minutes, drink electrolyte, and then take some cool water and then come back to job. So these kind of shifting hours or staggered working hours is already being implemented in combination with cooling solutions, which is what we see in the large scale industry. However, this definitely is missing from the MSME piece as such.

Govindraj Ethiraj: Right. And that's perhaps the task ahead and the implementation or enforcement of it. So what more should we be doing from a policy point of view, I can see the enforcement is clearly a gap because the solutions at least some of the solutions are already evident to us.

What more could we be doing not just this year, which we may be saved in a few weeks because of rains, but the next time we face similar heat conditions?

Dr. Vishwas Chitale: I think three things are very important here. Again, like, you know, when you talked about response in the question, I wanted to say that it's not going to be only response centric preparedness, while we need long term heat mitigation to be embedded into planning, like the cities that we are developing, the industries that we are putting up, even any kind of industrial development area planning that is going on, we should ensure that long term heat mitigation is accounted for in that planning process, maybe by allocating green spaces, or maybe by already identifying areas for establishing cooling shelters and many of these technologies and tools on the ground.

Second, we have to support this preparedness or mitigation efforts with financial allocation. Now this year, 16 Finance Commission has recommended recognition of heat under nationally notified disasters, which means that the financial allocations which will be given to heatwaves, etc, is likely to get a good boost. And we should utilise that finance for mitigation centric activities on the ground.

And third one, I think so far, what I feel is people are still not acknowledging the fact that the summer that they faced 10 years back is no more the same summer that they are experiencing right now, especially when we talk about increasing number of warm nights. So I feel there is still a lot of effort needed to bring that scientific evidence to masses and make sure that they understand the importance of it. Otherwise, we might be doing great research.

But if it is not really acknowledged by the masses, it will never be seen in terms of changes in the practise. So I think I would like to talk about these three things.

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

Dr. Vishwas Chitale: Thanks, Govind.

Is it Possible to Monetise the Gold kept in Households?

Indian households and temples are sitting on over 25,000 tonnes of gold, with some estimates going up to 34,000 tonnes of gold. In times of austerity, the question that obviously comes up is can these reserves be monetised? Remember, the Prime Minister also had put out a call or an appeal to Indians to reduce their purchases of gold. Amol Bansal, who runs a generational jewellery store, BK Sarab Jewellers in Lucknow in Uttar Pradesh, is attempting to build what he calls a complete gold ecosystem, a fully digital transparent platform enabling you to buy, sell, store, and transfer and earn interest on gold easily.

I reached out to him and I began by first asking him how he was seeing overall gold purchase or sale trends right now, before asking him about his initiative to free up gold reserves.

INTERVIEW TRANSCRIPT

Amol Bansal: Gold has almost risen from 90,000 to 1,60,000 in the last 6-7 months. It rose from 1,00,000 to almost 2,00,000 and came back to 1,50,000. And this has been an incredible journey for people who have invested in gold.

Now, the problem is that with this shift in the market, it brings about a lot of ambiguity in the market and the trust in the market. As of today, gold with PM's appeal and the import duty hikes from 6% to 15%, it is a very uncertain market. But given the international position of gold, there is certainty by most of the people who work in the gold industry that gold is supposed to go up to $6,000 in the coming days.

So most of the analysts are looking between $6,000 to $8,000 in the coming days. As even today, even after so much uncertainty, I still feel gold is a very safe haven for people who believe that gold gives them stability in uncertain times.

Govindraj Ethiraj: Siddharth Right. And in the areas that you are present in, I mean, which is mostly in and around UP, consumers, you know, times like this, are they buying more or are they selling or are they holding back? I mean, if at all, that's different from the rest of the country.

Amol Bansal: So see, after the PM's appeal, everybody's holding, right? So it's very quick to judge, is it because of the PM's appeal or is it because of people actually taking it too hard that they should abstain from buying gold for the next one year? But overall, yes, impulsive buying of gold has gone out of the window.

People who actually need gold, maybe wedding buying, they're happening, right? Because still, India is a gold-obsessed nation. We have been buying gold forever, for generations after generations.

To change it in one go might be a difficult task to ask of Indians. But yes, as of today, the market is subdued. The demand is subdued.

In terms of volume, in weight, the volumes have gone down, even though because of the change in prices, we don't see so much of losses on the balance sheet. But yes, they will start taking a toll if this goes on for too long.

Govindraj Ethiraj: Right. Anmol, tell us about your MyGold initiative. You're essentially trying to unlock idle gold assets.

And how has that worked so far? Or how do you see that going, particularly in terms of, again, consumer response? I've been in this industry for the last 30 years.

Amol Bansal: And it was during COVID time when I started looking into, you know, because I was sitting at home, and I was trying to read a lot. And when I did a very deep survey on gold mobilisation scheme, which was launched by the government in 2016. And that was when it struck me that, you know, we are sitting on gold mine.

Everybody has invested in gold. Some of the gold is in use. And most of it is kept in loggers, which is idle.

In temples, we have almost 5000 tonnes of gold, which again is lying idle. So I have been trying to develop a platform, which is MyGold for the last four and a half years, which we have successfully built now, tested, proven, operational. We have tried to understand every layer in terms of security, transparency, safety, right from the flow of when a user gives his gold to the point where it is utilised by the industry and returned back.

So we have created an ecosystem and infrastructure, which can work for Bharat, which can work for every milligramme of gold to one to tonnes of gold, and still function flawlessly with securities and insurance built in every layer.

Govindraj Ethiraj: So I know you're not a bank. But how would the scheme be different from, let's say, what banks and non-bank finance companies offer as loan against gold? We have built this structure on gold weight.

Amol Bansal: The ownership will never be taken away from Govind. If Govind is suppose giving me 100 grammes of gold, he receives a contract of bailment for 100 grammes of gold, along with a 100% insurance paid cover note, which protects his 100 grammes of gold against any defaults. Right?

Now this 100 grammes of gold, what does the return Govind is looking for is not in terms of money, but in terms of gold weight. So we are gifting you returns in terms of gold weight. The whole system is flowing in terms of gold weight.

I give this gold again to the jeweller in terms of gold weight. He returns me in gold along with the added gold over the year, which is extra bonus to the user. So if today 1 kg of gold was lying in lockers for the last 5 years, it was still 1 kg.

But today, if it is in my gold, after 1 year, it is 1 kg 35 grammes. After 5 years, it is almost 1200 grammes. So your gold is growing not only in value, but it's the weight of the gold, backed by insurance, backed by securities, and backed by a system which is functioning flawlessly.

Govindraj Ethiraj: And who is the beneficiary in this? So you're saying that the onwards jewellers who are picking up this gold, I can understand if there was a shortage of gold, but I'm assuming there's no shortage. So how does the economics work then for someone who's actually picking this up and also then therefore willing to pay that extra value in gramage?

So very good question again, Govind.

Amol Bansal: It's something that only a finance person can ask me. So look at this from the point of view of a jeweller. Today, a jeweller has to either buy gold, right?

And he has to pay upfront capital of import duty and GST, right? Now this, even if he goes for a bank loan, it sits on his balance sheet as a liability, which is already bought, at some point of time has to be paid. Now in terms of bailment, the ownership is never transferred to the jeweller.

He's just getting that 1 kg of gold to work with for 1 year, right? So that for 1 year, that gold is with him as a contingent liability, not sitting directly on his balance sheet. Now he's not giving import duty.

The mobilisation is happening from the gold that is collected within India. It is not being imported. So it helps the government reduce CAD, allows us to mobilise the idle gold, gives return to the users, to the Indian citizens.

Gold till today is treated as a dead asset. It is an asset which people believe will be kept in lockers for years. We are giving them a reason to get that gold out and give it to us so that we can make extra gold for them.

Plus for the industry, it protects them from import duty, GST, easy access to gold that has been mobilised within India.

Govindraj Ethiraj: Right. So two questions. One is, I'm sensing that all of this depends on a very high level of trust.

If you're saying that you're really giving them a certificate and the backing of an insurance certificate or an insurance certificate, which is not the same as money. The second thing is to do with how your response has been in the last couple of years. Could you give us some sense on what kind of volumes we've seen and where?

Amol Bansal: So we have been not building for scale to today. We wanted to make sure that it is a working model first. We wanted to prove an operational model with all safeguard and guardrails built in.

So today, after doing operations in a city like Lucknow, organic, right? We have been able to scale it to a point. We have tested it within the gold industry.

So that is the kind of demand from the gold industry. And if now we are ready to scale at a point where PM's appeal is also that mobilise the gold lying in India rather than importing it from outside. So out of that 900 tonnes going that comes into India every year, only 300 to 400 tonnes were being used for jewellery.

Rest of it was all bullion coins that is going straight into lockers. So our appeal is even if we are able to mobilise 1% of the 35,000 tonnes of gold, we are looking at 350 tonnes of gold. Our annual need of the jewellery industry is close to 300, 400 tonnes.

So we should be good enough if we are able to do that in the next one year or two years.

Govindraj Ethiraj: Therefore, you're saying what people are giving you is really bullion or coins and not jewellery, and then getting back coins or bullion or a little more than what they originally gave.

Amol Bansal: Interestingly, we have customers who are coming in with jewellery and they're saying, we don't use it. It has been lying in lockers for years, but because it was lying in lockers for our security, please take this. And we have collected gold because we melt it and take 24 karat.

Our is a 24 karat ecosystem. Whenever they want, they can ask for 24 seven axis of their 24 karat gold, right? So whether they want money into their bank account, they can get that.

They want their physical gold handed back to them. We do a doorstep delivery back to their houses. So 24 karat is a system which allows us to maintain all parameters on a transparent scale.

So if you have given me 100 grammes of jewellery, say 22 karat gold, it is actually 91.6% of 24 karat gold that is credited to your account. So we are getting in jewellery also a lot, a lot of old jewellery, which was not being used. People are giving that also.

Govindraj Ethiraj: Right. Amol, this is very interesting and insightful. Thank you so much for joining me.

Amol Bansal: Thank you.

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And on Tuesday, gold prices fell thanks to fears of elevated inflation after US-Iran tensions rose again and pushed up crude prices and obviously thus clouded US interest rate outlook. Spot gold was down to about $4,521 per ounce, according to Reuters.

How has Ferrari’s New Electric Car Affected its Stocks?

Shares of luxury carmaker Ferrari fell sharply on Tuesday after the company launched its first fully electric vehicle. The Italian sports car manufacturer unveiled the Luce, which translates as light at a venue in Rome, describing the choice of name as one that evokes clarity and direction, according to a CNBC report. The highly anticipated model, according to this report, marks a departure from the aesthetic of a typical Ferrari and comes even as other luxury car manufacturers, notably Porsche and Lamborghini, have scaled back on plans to launch their own EVs due to weak demand.

Ferrari's CEO described the launch of the Luce model as a very important day for the company and one that symbolises the opening of a new chapter. When asked whether the company could satisfy both new customers and its typical clientele, Ferrari CEO Benedetto Vigna told CNBC that when you do a new technology, you need always to keep in mind a word that's called respect. And respect of the technology because when you have a new technology, you need to make sure that it's properly represented in the design, so the design must be different.

What was the Chaos Caused by Audemars Piguet recent Launch?

And sticking to luxury and with a twist, watchmaker Audemars Piguet, CEO Ilaria Resta said that response to the luxury Swiss timepiece maker's launch of a pocket watch in collaboration with Swatch has been overwhelming. She told Bloomberg Television in an interview on Tuesday that their website received more than 10 times the visitors they get in a year in just one day. The pocket watch, which is the result of a collaboration, which is of course rare, between the mass manufacturer Swatch Group and Audemars Piguet, the maker of the exclusive Royal Oak, went on sale on May 16th.

Just to put things in perspective, Audemars sold about 50,000 watches last year with a production capacity of an extra 20,000 and that compares to about 4.4 million watches for the Swatch brand, according to various reports by Morgan Stanley and Lux Consult. So the Royal Pop launch generated so much interest that some Swatch stores across the world had to shut down for crowd safety concerns and the product was only available for purchase in stores. There was a similar frenzy in 2022 when the Moon Swatch had debuted, which was a similar collaboration between Omega and Swatch.

Resta said that buyers should be patient and that the Royal Pop would remain on sale for several months, echoing a similar message from Swatch after it was forced to close about 20 of its 220 participating stores after mall operators could not handle crowds. Resta framed the collaboration with Swatch as part of a broader push to court younger and first-time buyers at a time or rather moment of structural pressure on the industry. Nobody needs a watch to tell the time, she said. “We need to preserve this wonderful industry.”