On Episode 864 of The Core Report, financial journalist Govindraj Ethiraj talks to Ambareesh Baliga, Market Expert as well as an excerpt from our extended interview with Neha Agarwal, MD & Head – Equity Capital Markets at JM Financial Institutional Securities.

SHOW NOTES

(00:00) Stories of the Day

(01:00) Markets recover but oil prices are jittery once again. Looking back at the last two months.

(02:04) Rupee hits fresh closing low

(09:15) India’s petrol consumption has risen while gas has fallen in April

(10:25) Emirates, Etihad announce they are returning to full capacity and flights

(12:02) Why you may not get to see the World Cup Football in India this year

(14:21) The IPO market in 2026 may outshine 2025, what could drive this?

Check out our Live Earnings tracker: https://earnings.thecore.in/

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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 5th of May, and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital.

Our top stories and themes…

The markets recover, but oil prices are jittery once again as we look back at the last two months.

The rupee hits a fresh closing low.

India's petrol consumption has risen while gas has fallen.

In April, Emirates Etihad announced they're returning to full capacity and flights.

Why you may not get to see the World Cup football in India this year, and the IPO market in 2026 may outshine 2025, and what would be the driving factors for this.

The Markets, The Rupee and State Election Results

We continue to track the price of oil as it best reflects, in present times, investor sentiment, which in turn affects markets and the rupee, particularly for countries like India. Oil prices rose almost 5% on Monday after Iran's Fars News Agency reported an incident with US warship in the state of Hormuz, sparking concerns over fresh tensions in this oil transit route.

Brent crude futures were up almost $5.5 to $113 a barrel on Monday morning, having actually come down on Friday. In general, as we know and have been pointing out, oil staying above $110 a barrel is not good news at all, and that obviously has several cascading downstream effects. Back home, the stock markets did better, though they were off their day's highs.

The Nifty 50 was up 121 points to 24,119, and the Sensex was up 356 points to 77,269. The broader markets, that's the Nifty mid-cap and small-cap, were up 2 at about 0.6 and 0.7% each. The rupee, however, slipped to its weakest closing level on record on Monday, thanks to increased dollar demand from maturing non-deliverable forward positions and a rise in oil prices, according to Reuters, which added that it closed at Rs 95.08 against the US dollar, that's down almost 0.2% from its previous close.

The Reuters report also said that India's Reserve Bank of India is now looking at ways to mobilise dollar inflows to boost its foreign exchange buffers and cushion rising pressure on the rupee from rising oil prices. One step being considered is reviving a mechanism last used in 2013 to pull in dollar deposits from NRIs and eliminating withholding tax on overseas government bond investors. In 2026, foreign portfolio investors have sold net about $20 billion of Indian stocks and bonds, according to the Reuters report.

In political news, the Bharatiya Janata Party, or BJP, is on course to win two of four crucial state elections, i.e., West Bengal and Assam. Actor-turned-politician Talapathy Vijay's newly formed TVK party staged an upset in Tamil Nadu in the south, overtaking the DMK, which was in power and AIADMK parties. Vijay is most likely going to be the new Chief Minister of Tamil Nadu, which, among other things, hosts Apple's largest production capacity in the country.

The other southern state of Kerala saw the Congress-led UDF return to power after a decade. The stock markets are at an interesting holding point, with some lift in the small and mid-caps as we've spoken about earlier and some stability in the larger caps as we're seeing now. So how are markets reading the medium-term signals from external factors like oil prices and rupee and what are the counterbalancing forces, if any? And what are current sentiments like? I reached out to market expert Ambareesh Baliga and I began by asking him how he would sum up the last two months if he were to look at the market movements.

INTERVIEW TRANSCRIPT

Ambareesh Baliga: See, basically markets never like uncertainty, and especially when it comes from geopolitical issues. So, normally we see markets correcting whenever there are geopolitical issues because those selling in fact fear the worst. But then, as far as the US-Iran war was concerned, in the Indian context, I think things were a bit different.

I mean, we didn't have direct damage. It was more of a collateral damage, which again, we are trying to limit as much as possible. The collateral damage was basically as far as oil and gas supply was concerned, and as far as the supply chain of various industries was concerned.

We managed to get that oil and gas shipments. So basically there was no major shortage as such, though we felt the pinch, and in couple of pockets, I mean, people felt their shortage, no doubt. The trade was affected, but again, it was not at standstill.

Government and refiners had absorbed the oil shock. I mean, there was a different reason why it was not passed on to the consumers, but irrespective, I think the election season was a boon in disguise because of which, I mean, the increased prices of diesel and petrol was not passed on. Otherwise, clearly the inflation would have shot up immediately.

I mean, now the losses lie with the refiners and the government books, which means going ahead there could be some cutback in spending, and I think that effect will be felt over the next few quarters. As far as corporates are concerned, like I said, the supply chain issues are there, and because of which there are margin pressures, but the market has already discounted that. So as of now, as we stand, people are hopeful.

Things should normalise maybe in the next quarter or two, and that's very clearly getting reflected in the market sentiments, because of which we have seen that huge bounce back in the markets.

Govindraj Ethiraj: And we've also seen small and mid-cap resurgence. What's driving that in a broad sense, and is that something that's going to extend to larger caps as well and broader markets?

Ambareesh Baliga: See, if you look at the small and mid-caps, I don't know whether I've discussed this in the past with you, but then see, there is a clear difference between the mid-caps which are being bought by mutual funds and the other mid-caps. And I would say broadly, these are the stocks which are below 5000 to 8000 flows of market cap. Beyond that are the ones which are generally bought by mutual funds.

So if you look at pre-war, about 12 to 18 months pre-war, most of these mid-cap and small caps which are bought generally by HNIs and the retail investors have been falling sharply. And it was consistent fall and most of those portfolios were in the red. Now when we had this geopolitical issue, these are the same stocks which fell further.

I mean, there are stocks which had fallen 50-60%, they fell another 30-40%, which means finally they fell about 70-80% from the highs, irrespective of the fact whether they were fundamentally good or whether they're just those tip stocks, which people generally buy based on tips. So I mean, after that sort of a crack, I think there was a decent amount of value in quite a few of these mid-cap and small caps, it's not that all of them are doing badly fundamentally. So there was some buying which happened, interested buying which happened during that dark period of the war season.

And once you have these stocks bouncing back, when you bounce back from lower levels, a 20% return, I mean, can happen easily and that's exactly what we have seen. I mean, some of them have bounced back that 20, 30, 50% in the last month, month and a half. And typically when that happens, you have a lot of people who are sitting on the sidelines.

They start jumping into buy saying that, okay, now the bottom has happened, let me get into this stock and buy the momentum. So currently what we are noticing or what we are witnessing is that these mid-cap and small caps, which had bounced back decently well from lower levels, continue to move up that momentum is there. And I expect that to continue.

Govindraj Ethiraj: Right. And as you look ahead, Ambrish, so we are just now somewhere midway or towards the end of the earning season. Is that going to drive prices or markets or how is the markets essentially balancing between let's say the known factors, which is earnings and maybe some other macro data versus the unknown, which is the uncertainty still flowing in from the war in West Asia?

Ambareesh Baliga: See, one is earnings. I think earnings is something which normally drives the stocks like in the longer term. And fortunately, because of the war, the expectations for Q4 and also I would say for Q1, FY27 are a bit tepid.

Whereas what we have seen in most of the cases is that the earnings were better than expected. Although the earnings haven't mixed till now, but most of them have been better than expected. So if this trend continues into Q1 or FY27, I mean, that's the one which can drive the markets going ahead.

And hopefully, I mean, no further geopolitical shocks like all of us are expecting or hoping that this gets sorted out over the next month, month and a half. And as far as India is concerned, monsoons, I think we need to watch it very closely. I mean, after a number of good monsoons, this time it's expected that it could be a bit below average.

So that's the other thing which can have an effect on the markets going ahead.

Govindraj Ethiraj: Thank you so much for joining me.

Ambareesh Baliga: Thank you. Always a pleasure.

Oil and Gas Consumption for April

India's gasoline and gas oil consumption rose in April, according to preliminary data released by the Petroleum Planning and Analysis Cell of the Oil Ministry in India. Gasoline consumption was up about 6.3 percent from last year at about 3.7 million tonnes. Local gas oil sales were up to about 8.3 million tonnes in April.

That's diesel for you. On the other hand, liquefied petroleum gas consumption or LPG or cooking gas consumption in April fell by about 16 percent to 2.2 million metric tonnes, according to the same preliminary government data quoted by Reuters, after supplies were hit by the closure of the state of Hormuz following the war. In 2025, India consumed about 33 million tonnes of LPG, mostly for cooking gas.

Imports accounted for about 60 percent of that and 90 percent of those imports came from the Middle East. India's jet fuel demand also fell slightly by about one and a half percent in April, even as airlines passed on the higher fuel prices to consumers, according to that report.

Emirates and Etihad in Full Swing

Could some normalcy be returning to international flights? Well, in some ways, yes, but how tickets will be priced in coming days, given the soaring cost of jet fuel, of course, remains to be seen.

Meanwhile, the United Arab Emirates has removed all temporary airspace and airport restrictions imposed in the last two months, which opens up the pathways for Emirates flights Dubai and Etihad to return to full schedules, which have obviously been disrupted since the 28th of February. Emirates is marking a near full return to operations, with 96 percent of its global network now restored following a period of disruption, according to a release sent to us by the airline. In the past few weeks, the airline has progressively resumed services to the Americas, Europe, Africa, West Asia, the Middle East and the Far East and Australasia.

Emirates operates about 167 daily flights between Dubai and nine Indian cities, including the major metros. Emirates said the airline is right now operating to 137 destinations across 72 countries, with 1,300 weekly frequencies representing 75 percent of pre-disruption capacity, but is constantly adding more flights, seats and options every day, the airline said. Travel portal Carry On quoted Emirates CEO Tim Clarke saying that people have short memories and he backed a swift rebound and pointed to their experience through previous regional shocks.

Speaking at the Capa Airline Leader Summit in Berlin, he predicted full operational recovery within one to two months of the state of Hormuz reopening and said that they would be the most profitable airline of the year, as you would hear soon.

India and China Skip Football World Cup Broadcast?

Will you get up in the middle of the night to watch a choice World Cup football match? Well, you might, but the broadcasters are not betting on it, it appears. In a surprising development, it appears that millions of soccer fans in China and India may not be able to watch the World Cup starting next month because of a stalemate over broadcast rights in India and no official decision in China, according to an exclusive Reuters report.

Reliance Disney, the brand's geo-hotstar, has reportedly offered $20 million for the 2026 World Cup broadcast rights, which is a fraction of what FIFA wants and is also not acceptable to them, according to sources who spoke to Reuters. Sony apparently also held talks but decided not to make an offer for those rights. The tournament kicks off in about five weeks' time on the 11th of June, which means that it's very tight for broadcast infrastructure to be set up and advertising inventory to be sold.

FIFA had earlier quoted about $100 million but apparently lowered its ask, but is not very keen to come down as much as what Reliance has offered, which is $20 million, according to those sources. Reliance believes that the World Cup will have lower viewership in India, which is of course quite intuitive because the tournament is being held in the United States, Canada and Mexico and most matches will air past midnight or somewhere in the middle of the night in India and the subcontinent. Moreover, football does not command the same commercial premium like cricket and then of course there's the slowdown linked to the Iranian war.

China too has not announced a deal, which FIFA says accounts for almost 50 percent of all hours of viewing on digital and social platforms during the 2022 World Cup. The lack of a confirmed broadcast agreement with India and China is unusual at this stage, says the Reuters report, adding that in past World Cups, including 2018 and 2022, Chinese broadcaster CCTV had closed the rights well in advance and began airing promotional content and ads weeks before the tournament. When the World Cup last aired in India in 2022, Reliance's then-standalone media arm secured the same rights for about $60 million, which was announced by the way 14 months before the event in Qatar and it drew about 110 million digital viewers across platforms.

Outlook for IPOs in 2026

How is the IPO market looking like this year? Can it match last year's 175,000 crore approximate raising in 2025 and what kind of sectors and companies could attract investor fancy this year? On the Core Report Special Edition, I spoke to Neha Agarwal, Managing Director and Head of Equity Capital Markets at JM Financial Institutional Securities, whose job it is to track both sides' investor appetite as well as companies who are priming for a public offer. While the appetite is strong or is projected to be strong, the markets are more discerning than they were last year and companies have therefore to be more robust. I began by asking Neha what kind of pipeline she was seeing in coming months.

INTERVIEW TRANSCRIPT

Neha Agarwal: I think two things, right, whatever, again, when now we're talking to the buy side, when I talk to mutual funds, insurance companies, FBIs, I think important metric is yes, they are investing in India for growth, for sure. But I think the nuance over there is it's profitable growth. So I don't think investors are a little myopic, when I mean myopic, they're not looking to get to a profitability metric, say four or five years down the line.

But if you're showing, you know, the entire milestone towards a profitable growth the next two to three years, investors are willing to listen to you. And keeping pricing aside, I think there's good reception. But from a sector dominance, I don't think this year is going to be any hot sectors.

I don't think it's only going to be new age tech, or it's not going to be only renewable energy. Then this year, you will see REITs and INVITs have really picked up as a product. And I think that is because there's a very good confluence of annuity and growth.

So if you have annuity and growth, REIT, INVIT also are a very good product, because you have a yield cash flow coming in, and then you have a growth element to the portfolio. That, keep in mind, all the corporates have started shifting their narrative towards showing investors what is a predictable revenue base that I have, and superimpose growth on that. So I think business commentary has changed.

Again, point of validation being REITs and INVITs. This year, we're going to see data centres. So data centres is a thematic which is playing extremely well.

There is, it's asset heavy, but there is revenue visibility is extremely strong. Also, if you see renewable power, again, large capex, but if their execution is on point, you're going to see a lot of reception of those companies. And third, my personal favourite because I'm seeing them perform is manufacturing companies with high precision.

When I do not mean the usual commoditised manufacturing, I mean where there is R&D, there's value add, and there's precision. Could be aero, could be defence. So a lot of those companies, because you're actually seeing that entrepreneurial energy in research and development, and investors are just loving to partner.

Govindraj Ethiraj: And you've visited some of these companies?

Neha Agarwal: Yes. In fact, we did IP of this company called Acus, you know, and phenomenal. We went to the factory in Belgaum and we were mighty impressed by the kind of facility they have and the execution that they're doing.

Govindraj Ethiraj: And that will happen this year. We've got at least two or three big names that are like National Stock Exchange and Jio that are coming, but that looks like it'll be more towards the end of the year rather than...

Neha Agarwal: Yes, I would believe so. If you see publicly right now in SEBI, there are more than 250 DRHPs which are filed without these big potential transactions there. And if I really put some probability assignment to that, I wouldn't be surprised if we raise about 30 to 40 billion dollars just via IPOs.

Govindraj Ethiraj: That means it would be more than last year?

Neha Agarwal: That's right.

Govindraj Ethiraj: Okay.

So you're saying after everything, we're actually likely to see more fundraise from IPOs.

Neha Agarwal: Let's go back to calendar year 25, right? Jan to May, there was a vacuum in primary markets. There was U.S. tariffs, there's Project Sindoor and like, so the volatility again was very high. The IPO market actually kicked off in May. So from May to December, we broke all records, right? It was the highest ever fundraise.

We're same confluence point right now. Right.

Govindraj Ethiraj: And if you look at instruments, so I mean, when we say IPOs, we usually think of equities and so on. So tell us about what else is happening in terms of instruments or innovation and instruments from the company side.

Neha Agarwal: Kino says JM has vintage of more than 50 years. And I think one thing we've learned from our chairman is innovation is key. We were pioneers in actually introducing IDR as a product.

We did it for Standard Chartered way back in 2010. We also did differential voting ride shares for Tata Motors. I think it's time has come where we need to innovate more on products.

I think we need to spend more time on IDR as a product. Again, it didn't do well for a variety of reasons, could be specific to a company, but as a product.

Govindraj Ethiraj: Or ahead of its time?

Neha Agarwal: Or maybe ahead of its time. Now, domestic capital is matured. The liquidity, I think, is a mega trend on its own, right?

So if you really want to focus, we should make sure that IDR becomes an investable product for mutual funds. Right now, there are certain nuances, whether it comes under their external capital limits, or can they invest from their domestic capital? If we just iron out and kind of harmonise all these regulations, I think it's a phenomenal product for large MNCs, which have very dominant India presence.

For them to have IDR, I think is a great product in these times.

Govindraj Ethiraj: Can you just walk us through what an IDR exactly would be? I mean, from a domestic investor's lens?

Neha Agarwal: Okay, let's imagine a company, a large global company, which has a very significant India presence. Could be in the form of clients. It could be in the form of employment.

So the brand equity is very strong in India. There, the stock is already listed, maybe on the NYSE. There is a mirror, but that valuation over there could be other global markets.

India is just a subset. Now, if you want to focus only on the India regime, and domestic investors knowing, and I've always believed familiarity breeds an investment, right? Today there's comfort with a brand.

If you actually go over there and pitch a story, which the Indians know about, I think the reception there will be very good. So IDR is literally Indian Depository Receipt. If we think about it, how Indian companies like Infosys had an American Depository Receipt.

This is just a reverse of that. The only issue is there are certain nuances about the potential pools of capital, which can invest in an IDR. We're working, and if certain of those regulations get ironed out, I think this will be a very good product for this year, or maybe next year.

Govindraj Ethiraj: Right. So if today a company were to come and talk to you and say, we want to go public, and we're talking about mid-sized companies, what do you ask them to do first? I know you said that governance and disclosures are fairly world standard, but where else can Indian companies work on or work upon?

Neha Agarwal: See, I think first, to my mind, most important is they need to be ready to list. Again, disclosures are just at the document stage. No, it goes beyond, right?

They need to be ready in terms of the entire growth strategy. Do they believe that they are at an operational maturity where from that there's a stability of cash flow and there is growth? Are they ready to take external capital as responsible capital, right?

And B, executing as to whatever they have been promising. So if they A, have made up their mind that listing is for them, raising responsible capital is for them, and envisaging on the growth strategy is something that they wish they could do. And I would think at that point of time, they're ready to IPO.

I wouldn't differentiate between a small cap or a mid cap or a large cap. Indian domestic capital itself is large enough to absorb good companies' paper.

Govindraj Ethiraj: Yeah. And you're saying that 26 is going to be bigger than 2025.

Neha Agarwal: I wouldn't be surprised.