On Episode 922 of The Core Report, financial journalist Govindraj Ethiraj talks to Raja Lahiri, Partner at Grant Thornton Bharat as well as Nicolas Ziv, Lead Specialist, Transport Sector Resilience at Coalition for Disaster Resilience Infrastructure (CDRI).

SHOW NOTES

(00:00) Stories of the Day

(00:50) Markets Recalculate Impact As Trump Signals End Of Truce

(05:00) The RBI Wants A Cryptocurrency Policy That Leans Towards Prohibition

(06:57) Its Pharmaceuticals And Cricket All The Way In The Mega Deals Of The Last Quarter

(14:25) The Growing Importance Of Disaster Resilience In General And The Importance Of Airports In Specific

(23:08) Deepseek Wants To Build Its Own Chip

Check out CDRI's Airport Resilience Tool:

https://cdri.world/airport-resilience-tool/

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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 Thursday the 9th of July and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital.

Our top stories and themes…

The stock markets recalculate impact as Trump signals end of truce in West Asia.

The Reserve Bank of India wants a cryptocurrency policy that leans towards prohibition.

And it's pharmaceuticals and cricket all the way in the mega deals of the last quarter.

The growing importance of disaster resilience in general and the importance of airports in specific.

And Deep Seek wants to build its own chip.

Markets, West Asia Conflict, Oil and the Monsoon

The Indian markets have once again declared that oil prices matter the most when it comes to deciding sentiment and of course price movements. Other domestic macros are seemingly resurgent monsoon corporate results which we are waiting for but there is a sense of optimism.

A shift in potential foreign portfolio investment flows back into India, all of which are good but not enough. US President Donald Trump said on Wednesday that the United States ceasefire with Iran is over after hostilities between the two sides escalated overnight. That's Tuesday into Wednesday.

During a joint press conference with NATO chief Mark Rutt at the military alliances summit in Ankara, Turkey on Wednesday, Trump said, I think it's over in response to a question. I don't want to deal with them anymore. As far as I'm concerned, it's over, he added.

He also said Washington's delegation wanted to negotiate a peace deal but then he saw it as a waste of time dealing with the Iranian side. Now we've of course heard varying versions of this from Trump before or words to these effects on many occasions as a matter of fact so we do not know how this will go but it is a fact that there is real bombing going on whether unprovoked or provoked. Trump did say that while the ceasefire was off negotiations would continue so it's up to everyone else to figure out what exactly that means or meant.

Oil prices in response jumped more than six percent on Wednesday and hit a two-week high in response to the US president's statements. This obviously means that assured flows of oil through the state of Hormuz are once again under a cloud. Brent crude futures were up four and a half dollars to 78.73 cents on Wednesday morning.

That's under 79 and the benchmarks are at their highest level since June 22nd. The United States has also revoked with immediate effect a temporary sanctions waiver that allowed the purchase of Iranian oil without attracting US penalties. The waiver was issued in late June and had temporarily allowed the production delivery and sale of Iranian crude oil and petroleum products until the 21st of August as part of a broader understanding.

The Indian markets took all these cues in mostly from the oil markets and logged their biggest one-day loss in three months on Wednesday. The Sensex was down 1,677 points to 76,503 and the Nifty 50 was down 516 points to 23,882. In both cases the loss was about 2.1 percent.

The rupee took the same cues as well dropping to its weakest level in nearly a month. On Wednesday traders told Reuters the Reserve Bank of India had likely intervened in the foreign exchange market to limit the rupee's fall via dollar sales from state-run banks but it closed at 95 rupees 55 paise per dollar down 0.6 percent for the day. On Wall Street stocks were lower too after US President Trump told the summit in Turkey that the ceasefire was over.

The Dow Jones was down close to one percent. The S&P was also down as was the Nasdaq composite. The President of the United States by the way later said on Wednesday that the US might hit them hard again tonight before adding we'll see how it all works out.

So there you go both statements at the same time. By the way if you've not noticed after losing roughly one trillion dollar in market value in less than two months Nvidia's stock is the cheapest it's been since the AI boom kicked off and sent its shares into the stratosphere according to a Bloomberg report. While the chipmaker's graphic processing units or GPUs still dominate the AI data centre market but the stock has fallen 16 percent after hitting its all-time high on the 14th of May.

Even as investors move away from Nvidia in favour of competing semiconductor manufacturers particularly those in the memory market according to Bloomberg. While Nvidia is still expected to deliver the fourth fastest revenue growth in the S&P 500 this year it's cheaper than about half the stocks in the index including candy maker Hershey and company according to Bloomberg of course. Meanwhile back home the monsoons continue to batter several parts of India on Wednesday and even New Delhi woke up to heavy rains with a yellow alert from the India meteorological department or IMD on Tuesday going on to record its wettest day of the year.

Heavy rains continue to claim lives in many parts of the country and we're now talking about Wednesday. One of the lakes supplying drinking water to Mumbai has begun overflowing on the same day.

What Is RBI’s Position on Cryptocurrency?

The Reserve Bank of India has reasserted a call for a cryptocurrency policy leaning towards prohibition while the income tax department has warned that trading via offshore exchanges is hard to track according to government documents seen by Reuters.

Now in many ways this is not new because sentimentally this is exactly what the regulator that's the banking regulator as well as the income tax department have been saying for some years and primarily expressing their helplessness at regulating cryptocurrencies or even for that matter tracking them. The Reuters report says the documents reveal a preference amongst key Indian agencies to use tighter curbs on virtual digital assets even though the government has yet to adopt a policy to ban or regulate them. Cryptocurrencies exist in a somewhat grey zone in India though the latest documents suggest that the authorities are concerned about growing risks to the country's financial stability as cryptocurrencies continue to be traded without clear rules.

They've of course gained greater acceptance globally following big policy changes in the US and there are of course legislation backing broader use of stable coins. While countries like Japan and Singapore have moved to regulate cryptocurrencies, China by the way has prohibited the use of such tokens. Amazingly or interestingly India has about 39 million crypto traders who hold about 2.1 billion dollars in digital assets at the end of May according to income tax department estimates.

The reserve bank also has warned against stable coins while stable coins backed by foreign currencies pose or could pose a threat to domestic sovereignty. Rupee-based tokens or backed tokens could reduce the government's income from issuing its fiat currency and pose risks to financial stability during times of market stress according to the reserve bank of India. The income tax department's findings also said that fewer than a quarter of the 645,000 individuals who made cryptocurrency transactions in the financial year ended March 2023 reported them on their tax returns.

What are the Mega Deals of the Last Quarter?

A clutch of major outbound deals resulted in India's dealmaking landscape seeing a significant increase in transaction values during the second quarter of 2026 with total mergers and acquisitions and private equity deal values surging more than 125 percent quarter on quarter to about 36 billion dollars according to Grant Thornton Bharat's latest deal tracker report. Overall deal volumes however declined about 18 percent to 565 transactions but were the highest in four years while underlying deal activity remained subdued according to Grant Thornton. Pharma healthcare and biotech emerged as the top sector by value recording close to 14 billion dollars thanks to the landmark Sun Pharmaceutical Organon transaction.

The largest private equity deal was the 1.6 billion dollar acquisition of the Rajasthan Royals IPL franchise by investors including Lakshmi Mittal and Adar Poonawalla which suggests according to Grant Thornton strong investor appetite for premium consumer and sports assets. Retail and consumer led deal volumes with 95 transactions followed by IT and ITES and banking and financial services. I reached out to Raja Lahiri partner transaction advisory and private equity leader IPO advisory and national leader for TMT that's technology media and telecommunications for Grant Thornton Bharat and I began by asking him what he was seeing inside these broader numbers.

INTERVIEW TRANSCRIPT

Raja Lahiri: You're absolutely right, means the numbers are very solid. The number is $37 billion, a big activity overall. This is in Q2-26.

Q2 basically is your April to June 26, compared to $16 billion in Q1. So clearly there is a momentum. As you rightly picked up, outbound has dominated.

But again, there's some nuances there. Outbound, clearly the biggest deal is your Sun Pharma Organon, close to $12 billion deal. I think it sets a complete benchmark as far as Pharma set.

It's the largest deal Indian company has bought out outside India. It's in the biosimilar women's health space, very, very attractive space. I think it kind of sets a benchmark for Indian companies to look aggressive and make a statement and really make it happen.

So I think that's a top one. But apart from that, I think the other deal which to take note of is the SLPropac Indovida, basically the ex-Indorama Ventures, the packaging space that built a $2 billion asset. This is Blackstone back SLPropac, it's now called EPL.

And then you have Bharti Airtel, Airtel Africa, etc., those kind of deals. So outbound, you're right in terms of numbers, that clearly dominates the deals.

Govindraj Ethiraj: Right. And it seems to be fairly scattered. I mean, there's no clear trend apart from, of course, one big Pharma one.

Would that be fair?

Raja Lahiri: Absolutely right. Outbound, outlook-wise, in my view, it's going to be a little challenging because of the current geopolitical situation. So I would expect Indian buyers, yes, they would be very aggressive.

They will want the backing of the banks, investors to do that. But I still believe that they will look at quality assets, but they'll be cautious in terms of the size of deals and the jurisdictions they want to buy. So I'll not get carried away by some of the numbers in this quarter.

But clearly, Indian businesses, if you look at it, have always grown by large acquisition outside India. But as I said, given the geopolitics, I think it's going to be a cautionary kind of sentiment amongst buyers.

Govindraj Ethiraj: Right. And what's the reverse looking like? I mean, the domestic market and inbound investments?

Raja Lahiri: See, domestic is very active, the domestic market. India is a big market. And if you look at the sectors, ferry activity, a lot of activity in the overall infra-renewable side of things, Adani Ports, JP Fertilisers, JSW Energies, Rail Infra, they bought a company.

There are some deals in the highway segments. So I think the overall infra-renewable sector will continue to be very active. There will be consolidation happening.

And I guess sectors that have a little slowed down because people are looking at how things span out, especially in a volatile environment like now what we are facing today, is things like the usual one like consumer for example. We have seen a lot of activity in the consumer sector, but it has slowed down. There are definitely good opportunities going to happen.

And then the other sector I would say extremely active and will continue to see real momentum is overall healthcare, right? Speciality hospitals, jail hospitals, medical devices, because very clearly the economic trend of building the healthcare. So domestic consolidation will continue to be very active in my view.

Govindraj Ethiraj: And we've also seen the cricket investments come in or cricket investments into IPL teams. I mean, and there's one which is recorded here. There's another one either on the horizon, or has it already been recorded?

Raja Lahiri: Yeah, absolutely. Cricket has taken the centre pitch today. You have the Rajasthan Royals deal that has happened.

RCB Royal Challenges Bangalore also happened. There are $2 billion deals. I still remember looking at some of these assets with EBAC when they were formed.

Personally speaking, it's incredible to see this. And I think it signifies something. It signifies that the interest and the impact sports has on the businesses and the overall economy.

So I think clearly cricket and IPL definitely, but also don't miss out things like the other sports sectors. We will see many, many more investments in those sectors as well. Right.

Govindraj Ethiraj: And one of your other findings is that while the value is at $36 billion, which has increased quarter on quarter, and that took quite substantially because the previous quarter was even slower, the number of deals itself has shrunk by about 18%. So how does one read that particularly going forward?

Raja Lahiri: There are two parts of dealmaking, the volume of activity and the value. Very clearly India is moving to high value deals. So if you look at value deal, these are pretty large transactions, we had five plus billion dollar transactions.

So that's obviously adds to the value, which is great. The volume basically indicates your momentum in the economy, in dealmaking. There is clearly challenges in some of the mid-market P and the VC spaces, for example.

There is clearly some challenges, as I said, on the economy and hence there is caution. People are taking longer to close dates. So I would see the volume, some challenges this year.

But honestly speaking, last month, we've seen so much of work and business in the activity because we had the war, mind you, in April, etc. I definitely expect Q3 to be a very busy quarter for deals.

Govindraj Ethiraj: Do you see any newer or different sectors? For example, let's say if cricket was a surprise of sorts in the last couple of quarters, would we or could we see something else, or would it be more trend, continuing trend?

Raja Lahiri: Great question. That's all something that we always watch out for. Clearly space tech, Skyroot, it's a unicorn funded by investors.

It's the first unicorn, but very clearly the first of many, in my view, that will get born from India. Sarvam AI, again, one of many, in my view, that will get formed. Data centres.

I think these three, I think definitely watch out sectors because India will have to build data centres and AI stack. Clearly, I would say that that's areas to watch out for.

Govindraj Ethiraj: Right. And there are always more IPL teams to buy.

Raja Lahiri: Of course.

Govindraj Ethiraj: On that note, Raja, thank you so much for joining me.

Raja Lahiri: Thank you very much.

What Should Airports Do About Disaster Resilience?

Some 2.4 trillion dollars will be invested in airports old and new in the next 14 years including in India. A rising concern in recent years has been the ability of airports and their surrounding infrastructure to withstand disasters and their inbuilt resilience which could limit the damage and help them get back to their feet quickly. Before we go further into airports here are some larger infra figures which are worth repeating.

14 percent of global GDP growth is at risk each year from infrastructure losses to climate change and disasters and 80 percent of this risk is concentrated in the critical power transport and telecommunication sectors. The coalition for disaster resilient infrastructure or CDRI an intergovernmental body launched by India's Prime Minister Narendra Modi in 2019 and with 58 member countries now has been working across the world along with international bodies and businesses to drive research and investments in disaster resilient infrastructure. Now back to airports CDRI has released an airport resilience tool that can be accessed publicly which sets the benchmark of sorts in putting this form of research in public domain and there's also increasing the level of alertness to all forms of infrastructure and their exposure to potential disasters.

In the case of airports the idea is to help airport planners and operators respond to the specific risks they are facing across hazard types. CDRI worked with ACI world or airports council international and NACO which is a global consulting firm or Netherlands airports consultants to build this tool which leans on real world case studies built on situations ranging from cyclones, sandstorms, flooding, fog and haze, sea level rise, snow storms and many more. Major Indian airports as you know have seen flooding in recent years.

I spoke with Nikolas Ziv lead specialist transport sector resilience now based out of Delhi and I began by asking him what went into the making of this report.

INTERVIEW TRANSCRIPT

Nicolas Ziv: So, one of the aspects airports don't necessarily do is to look at the infrastructure part of resilience. Some of them, and most of them, do, for example, drills on how to operate when there is a crisis, when there is a disaster happening, but not necessarily to the infrastructure part, and that's really on what the tool is about. Like, it's looking at the different infrastructures of the airport, not only the infrastructures, by the way, also the operations, how to operate when there is a disaster happening, but mostly directly on airport perspective.

Like, you look at the runway, you look at the terminals, and what could be the impact of the different disasters on your different components, let's say, of the airport, and then it gives you some solution of what you can do. And that can give some assistance, some support to the airport to at least have some ideas of where to look for, what to look at in terms of solution, and that's what the tool can support them to do. And sometimes they don't necessarily do this analysis, do this vulnerability also studies on what are their vulnerabilities and the risks they are facing, and the tool can support them on that.

Govindraj Ethiraj: Right, so in your research that led you to building the tool, what are the areas you feel are the most vulnerable, particularly in countries like India, within the airport ecosystem?

Nicolas Ziv: Like heavy rain and flood are definitely some of the key disasters which are impacting a lot Indian airports. Like recently, I think in 2024, heavy rainfall led to a collapse of the roof in Delhi airport, with some casualties related to that, so that's an example. But just to mention that this heavy rain, they can first damage some of the infrastructures, and in some cases, even flood part of the airport.

And then of course, when an airport is flooded, it's not possible to operate it, and then it has a lot of impact for the economy, for travellers. So that's one of the main aspects. The other aspect and the other disaster, like I would mention two others.

One is, of course, big storms, because when you have high wind, heavy rain, so very difficult for airports to operate, and most of the time they have to stop operation during that time. And the other one is heatwave, because when you have heatwaves, then it's harder for planes to take off and to land as because of the modification air conditions, that could lead to delays and also sometimes to no possibility to operate in extreme cases. In the tool, we have 19 hazards which are explored, and all of these 19 hazards can have impacts, and it's very key to look at all of them, but the three I've mentioned are really key, I feel.

Govindraj Ethiraj: Right, and you know, for example, just in the last couple of days, we've seen Mumbai airport shut down for a few hours because of heavy winds. Now, these are extreme weather events. Now, can investment prepare airports for this, or is investment or disaster-resilient investments focused on other aspects which are really beyond all of this?

Nicolas Ziv: No, they can. Like, if you do some investments, especially on the infrastructure part, you can improve how resilient you are and how you can face these events. If we take floods and heavy rain, for example, of course, if you design your drainage, if you design your water evacuation system accordingly, of course, you can operate better your airports in an easier way.

That's one. Then, of course, if you invest in your people, like if you invest in drills, simulations, capacity building on how to behave, what to do when such an event happens, that's also an investment which might be key for an airport to train. Like in the tool, you have also these operational solutions which can be developed and maintenance.

Maintenance is another key aspect which should be developed because if you build the best drainage system but it's blocked by debris, for example, you cannot get to full potential. And lastly, I will mention governance. Governance is another key topic.

Who should do what, when, and how, and how the different authorities should collaborate together is also another key aspect for airports, especially that an airport is not working in isolation. You have roads leading to the airport, energy systems, water systems, and at the end, the operation of the airport, it's all these authorities talking together. And it's really key that we know exactly who does what before a disaster happens.

So then, when it's happening, it's clear the responsibilities and each of the different authorities can operate.

Govindraj Ethiraj: Right. And you're also saying this because this is not happening the way it should, not just, I'm not talking about India now, in airports across the world when disasters hit.

Nicolas Ziv: Yeah, it's not always the case. Sometimes, of course, like airports, they don't do nothing. Most of them, they do.

Most of the airports have already faced disasters, so they already know. But sometimes they don't put the required investments or they don't put it as a key topic. And of course, airports have a lot of topics to deal with.

And this one is not always one of the top priorities. And of course, that's the mandate of CDRI to bring as a top priority because we feel it will happen more and more in the future. So with the effect of climate change, disaster will be more intense, more frequent.

And if airports want to prepare to that, then we need to put it at a high priority.

Govindraj Ethiraj: Right. And you said there are about 19 hazards that you've looked at. And if you look at the prominent airports today, maybe in Asia or, for that matter, elsewhere in the world, particularly where CDRI has studied airports, what would you say are the two or three areas where airports need to work fast on?

I mean, what should they prioritise in terms of being more disaster ready?

Nicolas Ziv: I would say that flood is definitely an area which is impacting a lot. But after it depends on each context. Of course, if you have, and some of the airports are, for example, close to the sea, coastal cities, it's very often airports are even built on reclaimed land, for example.

So in these cases, sea level rise and storm surge are definitely a subject to look at. So it really depends on the local context of each airport. But if I have to pick one, flood is definitely one they should look at first.

And heat waves as well is another one, because it can affect a lot also the operations. Also for comfort of passengers, for example, that's another key aspect.

Govindraj Ethiraj: Right. So is there any airport or region where you feel that or has invested maybe ahead of others or is a good example of disaster resilient investments?

Nicolas Ziv: Yes, there are some. In the tool, we give some case studies, like best practises, I would say, from airports which have developed such solutions and best practises. So I have in mind, for example, the one in Amsterdam, Schiphol, on flood.

They did a lot of developing good solutions, also based on nature, like nature-based solution to cope with flood in particular. But there are others, and sometimes for different reasons, like, for example, in Japan, in heat by storm surge and flood a lot, and thinking of the airport of Osaka, for example, and they did a lot of work on that as well. So there are some good examples that you can find in the tool with the best practises and how the airport actually implemented the different solutions which are showcased in the tool.

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

Nicolas Ziv: Thanks a lot.

Why DeepSeek is Developing its Own Chip

China's deep seek is developing its own chip to help power artificial intelligence systems according to a Reuters report. The chip is designed for inference the stage in AI when models are trained and begin generating responses to users queries other than for building new models themselves according to Reuters.

Virtually every major AI developer according to that report is said to be developing its own chip in an effort to gain an edge by tailoring hardware that will work more efficiently or most efficiently with their systems. Last month OpenAI unveiled its first custom chip developed in partnership with Broadcom. Amazon is also in talks to sell custom chips for use in other companies data centres.

Alphabet has also seen significant demand for its own chips known as tensor processing units or TPUs according to Bloomberg.