Shares Drift Down The Fourth Consecutive Session
For all the hammering that the IndiGo management and staff have been getting in the last few weeks, the share prices almost predictably have not suffered as much
On Episode 755 of The Core Report, financial journalist Govindraj Ethiraj talks to Manas Majumdar Partner and Leader Oil & Gas, Fuels & Resources, PwC India as well as Pawan Kumar, President of the Seafood Exporters Association of India and Managin Director of Sprint Exports.
SHOW NOTES
(01:00) Shares drift down the fourth consecutive session
(02:45) Rising apprehension over Oracle’s finances, a key player in the AI infra game
(04:27) Sebi would like more women to invest in debt
(05:06) 2026 is a busy year for Indian energy as more refineries go on stream, a demand outlook
(15:45) India strengthens India’s economic and geopolitical presence at the mouth of the Gulf with Oman FTA
(18:13) Let that sink in: The Indian telecom industry saw overall overall subscriber base reaching 1.2 billion by November
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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.
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Good morning, it's Friday, the 19th of December, and this is Govindraj Ethiraj, broadcasting and streaming weekdays from Mumbai, India's financial capital.
Our top stories and themes…
Stocks drift down for the fourth consecutive session as they continue to hunt for cues.
There's rising apprehension over Oracle's finances, a key player in the AI infrastructure game that's on Wall Street.
Securities and Exchange Board of India would like more women to invest in debt.
2026 is a busy year for Indian energy as more refineries go on stream, a demand outlook.
India strengthens its economic and geopolitical presence at the mouth of the Gulf with a FTA or a free trade agreement with Oman.
India's exports to the US jumped last month despite a tariff blockade. How did that happen and how are exporters, for instance, in seafoods, seeing this?
And let this sink in, now there are 1.2 billion telecom subscribers in India
Flying Not So High
For all the hammering that the IndiGo management and staff have been getting in the last few weeks, the share prices almost predictably have not suffered as much, rising over 2% on Thursday in a down market and they've risen for six trade sessions now.
Now other markets would have punished an airline stock much more in a similar situation. We did point out in the take last week that the markets implicitly seem to believe in IndiGo's management and ownership, even if they're not all publicly present, whatever the reason might be. CEO Peter Elbers told employees on Thursday that the worst was behind them following widespread flight cancellations and disruptions at airports.
Meanwhile, Geojet Investments has reduced its target price for IndiGo to 5,830 from its earlier 6,720, but still maintains a buy rating and has identified several near-term challenges for IndiGo, including increased regulatory scrutiny, competitive reallocation of flight slots, and difficulties in pilot recruitment, according to a Business Standard report. Now while IndiGo appears to be clearing the zone of turbulence, the stock markets broadly are still in it and they continue to struggle for direction amidst a lack of cues, even as we head into the last few weeks of 2025. The markets fell for the fourth consecutive trading session and would have fallen further on Thursday were it not for some buying in IT stocks and the Sensex swung around a fair bit, but eventually closed 78 points lower at 84,482.
The Sensex has now declined 785 points in this period, that's four sessions. The Nifty 50 was three points lower at 24,815. In the broader market, the BSE mid-cap index was flat and the small cap was down 0.3%. Now on Wall Street, where we are continuing to look for signals on how and where the AI boom is going right now, there is rising apprehension amongst investors around Oracle, which has now spilled over from manifesting in its stock price, which has fallen nearly 50% from its all-time high on September 10th to affecting its projects, according to CNBC.
An asset management firm reportedly pulled out of Oracle's $10 billion data centre project over unfavourable debt terms, according to the Financial Times, even as concerns over its high level of debt mount. Now the latest development adds fuel to worries that Oracle could delay the completion of data centres for OpenAI, which were flagged first by Bloomberg on Friday, though the cloud company has denied the report, says CNBC. Shares of Oracle were down on Wednesday and other stocks were also hit during this period and the major indices, including the S&P 500, Dow Jones Industrial Average, and the Nasdaq Composite lost out.
Back home, the rupee was up slightly on Thursday after rebounding from a record low in the previous session, thanks to intervention by the Reserve Bank. The rupee closed at Rs. 90.24, slightly stronger than Wednesday's close of Rs.
90.38 per dollar. It had hit, as we discussed earlier, Rs. 91.07 earlier this week, thanks to continued uncertainty on a potential trade deal with the United States and, of course, persistent portfolio outflows.
And the data for that came from Reuters. Elsewhere, an upcoming 2025 Securities Market Code bill will consolidate four major legacy acts, including SEBI, that's the Securities and Exchange Board of India, depositories, securities contracts, and government securities into one uniform regulatory framework. The Finance Minister, Nirmala Sitharaman, introduced this on Thursday and the bill seeks to eliminate regulatory overlap, simplify business operations, and, of course, strengthen investor protection.
And other regulatory news for mutual funds and women, India's market regulator, that SEBI, approved changes on Wednesday to mutual fund fee structures to provide more transparency to investors and it also approved measures to encourage a transparent breakup of costs charged by mutual funds and to mandate disclosures of all the components of these charges. SEBI feels or has said that with the new cost structure for mutual funds, the average charges will fall by 10 to 15 basis points. It's also approved steps to increase retail participation in debt issues by allowing issuers to offer additional incentives to women, retail, and senior investors, among others.
An Oil Outlook
Oil prices steadied on Thursday as investors assessed the likelihood of further US sanctions against Russia and the supply risks posed by a blockade of Venezuelan oil tankers, according to Reuters, which added that crude dropped one cent to $59.67, so under $60 per barrel, on Thursday morning. And it also pointed out that US intentions to impose more sanctions against Russia and its threatened blockade of tankers under sanctions and carrying Venezuelan oil has pushed prices higher.
Now back home, what are the prospects for India's energy sector looking like, particularly from a supply point of view, or at least to start with, as we head into 2026 from 2025, which saw significant geopolitical shifts and an impact on the oil markets? I spoke with Manas Majumdar, partner and leader oil and gas fuels and resources at PwC India, and I began by asking him how he was looking at the oil and gas supply scenario right now.
INTERVIEW TRANSCRIPT
Manas Majumdar: You're right 2025 has at least been interesting if nothing else and 2026 looks to be probably equally so while we have the tenure of certain global leaders going on but coming specific to your question on India and you know the 2025 implications and hence the 2026 outlook in general the demand is always a positive story when we look at it from an India perspective and this I'm saying energy demand right so India's energy demand will grow at a shade lower than our GDP rate and our GDP rate is going at strong seven percent right at the latest numbers that have dropped and within that again of course the biggest growth segments are renewables and again pockets within oil and gas I would say we haven't had much so far on hydro or nuclear though there are quite a few ambitions but I would not call them short-term ambitions they would be longer term nature zeroing in into the two where we do see growth which is renewables and oil and gas renewables will see significant addition year on month on month in fact right if I remember numbers from just a few months back June July we were adding close to five plus gigawatt almost close to seven eight gigawatts per month and this is without offshore wind so this is mostly solar and parts of wind has also picked up oil and gas also as I said in general there is growth now it will not be say a 10 percent growth some parts would grow at say four five percent primarily say petrol ATF you know and some of those products diesel not so much NAFTA again more than intermediate because there's a significant push for petrochemicals so demand side remains bullish and positive not the short term but fairly long-term ish over the next 10 odd years supply side if I were to break it down and I'm focussing more on the oil and gas conversation the refinery capacity is also expected to see significant boost right we will have three more capacities coming up ISAG upgrade happening HMEL upgrade happening the Barmer HPCL refinery coming online so we would see close to 15-20 million tonnes coming online in the next quarter if not first half of the year right so this will mean significant supply on the refinery side and that will equally mean increase in crude requirements right and what that has reflected in is the fact that India has diversified its food sources right of course there is the Russia link of course which India has gone down a bit but it still continues to source that and we don't believe in general globally that there is any short supply of crude as such so demand bullish supply challenges yes but just from a pure volume perspective no availability issues sourcing and supply chain of course
Govindraj Ethiraj: Right and I'm going to come to the components of demand in a moment but on the supply side so walk us through what the broader numbers look like so we are importing crude oil some of the finished product we are exporting out of the west coast so obviously we're not using it within India and now you're saying that we have these three new capacities coming up so what's the total mix looking like in terms of what's coming in what's going out and how much is staying back in India
Manas Majumdar: so I would say obviously a lot more import is coming in of crude we're touching almost 90 percent and we probably hover around that while domestic production will increase but it's not a short-term thing there is a lot of intent that has come up in the new PNGR act notifications the ODA act that had come in earlier also there are other aspects as I was saying as part of Vixit Bharat Samudra Manthan etc which will bring in domestic production but let's say that broad imports would be in that 80 to 90 percent bracket right with that in mind all of that food goes into a refinery but not all of that remains domestic as you rightly highlighted a large part of the private refiners output of this food goes back to Europe and that's again if I were to look at the private and PSE context we have roughly about 250 million tonnes of refinery capacity which in about 60 million barrels etc whatever of capacity so of that 250 million close to about 75 80 million is the private refining right so about one third of it bulk of that one third goes for exports and within that or some of the PSU also do some parts of exports to Asia to Africa etc ballpark if you from the overall value we would say about 20-25 percent of our finished products is exported which is pretty much assuming that most of the private refiners is getting exported back and some of the PSUs right this in a sense in the slightly medium to long term will only enhance because as capacities come online and capacity and demand always have a little bit of a you know step jump function right capacity either lags or leads demand in this case there will be additional capacity coming online which may not have enough demand in the short term so some of the PSUs might also start exporting more right in the short term and then of course as domestic demand picks up which it will it will obviously get absorbed and the only last point I want to end on supply is on the refinery capacity there is more refinery capacity that is coming up BINA is also coming up right then you also have the other BPCL refinery that is being talked about in Telangana right so there is a lot of that also coming in NRL expansion Numaligarh coming on CPCL will also be a little later so all of this in the horizon of anywhere between two to five years additional capacity coming on with India having a broad Vixit Bharat goal of being 400 million tonnes from where we are 250 to 400 million tonnes so not exactly doubling but close to it and which means that you will not only supply the domestic market but continue to remain a significant export hub.
Govindraj Ethiraj: Right and so what is India's need then I mean if we look let's say in the same time period that you're looking given that now on the demand side we're steadily seeing consumption or sourcing shifting from fossil fuels to other forms of energy.
Manas Majumdar: Even fossil fuels to other fuels like a biofuel even the ethanol impact has an impact on eventually how much petrol gets consumed right so that is also by the way leading to some of the surplus on on the refining capacity there is of course having said that I said a technical or a refinery configuration that is underway where many of the new capacities are made to be more middle NAFCA heavy cuts which will then move to integrated petrochemical complexes so rather than being transport fuel orientated they become chemical orientated hubs which will safeguard some of these aspects the switch that you're talking about. Having said that the other fuels issue which is essentially the broader electrification that is happening is partly in transport but partly in industrial fuel which in some cases has already happened right some of it has moved to gas already therefore the impact on the industrial fuels is limited the biggest impact on the refinery capacity is the transport fuel ship which is again driven mostly by electrification but some extent by gas and in the future by green hydrogen but green hydrogen is at least another seven eight years away from a transport usage bulk of green hydrogen will be industrial usage to start with so to kind of summarise you know demand side picture that you're talking about the transport fuel which accounts for close to 65 70 percent of our refinery throughput basically is MSHSD and APF which is aviation and road transport and of course some bit of industrial fuel there that is the segment that is little threatened but again to that extent some of it has already happened on the industrial side some of the green hydrogen will happen in the future given that India in itself is not one content multitude some of those changes will happen at urban first and rural later so some of that demand will pick up from the tier three and rural side of it to still maintain the oil and gas demand
Govindraj Ethiraj: right into 2026 what's the one or two things that you're looking out for as things are either developments potential or otherwise which could influence prices or demand or supply
Manas Majumdar: I mean i would say there is two i mean of course continued geopolitical shocks but also i think capacity coming online right and i think you know in general we are in a bit of i would say a bubble zone i don't want to say a bubble economy globally because there is also that ai boom that is happening which in a sense is also good because there's a lot of energy demand that comes in from ai and data centres so there is a little bit of additional capacity coming on right so some of this oil demand is growing but supply is growing even faster because many of the european and american oil majors had not even moved towards energy transition so they had invested like an exxon or a hess or a chevron into assets in the americas and south americas to that extent where they have actually got supply coming online similar for gas where shell has invested significantly whether in africa or australia and papua new guinea where more lng will come into play now all of that capacity would mean that prices would definitely get a bit of pressure but again just because again i am highlighting it is more available does it mean it is reaching its end destination that is where the geopolitical prism comes into play right so i think it's those things that the supply enhancement and the geopolitical prism which will eventually map out how the supply goes work out
Govindraj Ethiraj: All right manas thank you so much for joining me
Manas Majumdar: Thank you
More Bilateral Trade
India signed a free trade agreement with Oman on Thursday, adding another pillar to the country's expanding trade and strategic engagement with the Gulf, and this follows a similar deal with the United Arab Emirates. The Comprehensive Economic Partnership Agreement, which covers goods, services, and investments, was signed during Prime Minister Narendra Modi's two-day visit to Muscat, which began on Wednesday.
And this, of course, expands India's network of preferential trade deals in the Middle East. SIPA, or SEPA, is India's sixth free trade agreement in the past five years, and there have been deals with Mauritius, the United Arab Emirates, as we just said, Australia, the EFTA bloc, and the UK, which could come into force in coming months. A note from the Global Trade Research Initiative says that with over 6,000 India-Oman joint ventures and Indian investments of more than $7.5 billion, mostly in the Sohar and Salalah free zones, the SEPA is as much a strategic pact as a straight trade deal.
It adds that for India, the most visible gains lie in merchandise exports. Oman has offered immediate zero-duty access in about 98% of its tariff lines, which cover about 99% of India's exports by value, which were about $4.1 billion in fiscal 25, and the main products are mostly petroleum, NAFTA, petrol, and also calcined alumina, machinery, aircraft, rice, iron, and steel products. More than 80% of Indian goods already enter Oman at an average tariff of around 5%, though duties on some items run as high as 100%, and their elimination under the SEPA is expected to improve price competitiveness for Indian exporters, though growth prospects are obviously tempered by the size of Oman's domestic market, according to GTRX.
On the other side, India imported about $6.6 billion of goods from Oman in fiscal 25, mostly crude oil, liquefied natural gas, or LNG, and fertilisers alongside chemical inputs like methanol and ammonia. There are also services commitments with Oman opening sectors, such as IT business and professional services, education, healthcare, and research, and also eases temporary entry for Indian professionals and streamlines regulatory approvals for pharmaceuticals. So very broadly, given the size of this, the real value, says GTRI, goes beyond tariffs and strengthens India's economic and geopolitical presence at the mouth of the Gulf, deepens Indian's firm role in Omani logistics and supply chains, and supports India's wider strategy on energy services and regional connectivity.
Telecom 25
The Indian telecom industry saw overall subscriber base hit 1.2 billion by November, and teledensity rising to about 87%, according to a year-end report from the Cellular Operators Association of India. Wireless broadband continued to dominate with about 954 million users compared to about 45 million wired line connections, thanks to rapid 5G adoption that rose to about 394 million subscriptions by the end of the year, the COAI said, quoting the Ericsson Mobility Report. Average mobile data usage has touched 36 gigabytes per month with a forecast of 65 gigabytes by 2031, and fixed wireless access also grew steadily with subscribers rising to about 13 million in October across both urban and rural markets.
One of the themes for 2025 was obviously the effort to tackle scam calls, messages, and digital frauds, which directly erode consumer trust, and the COAI says the common thread in 2025 was digital trust. Also, parliamentary recommendations on converging the telecom, IT, and broadcasting ministries under a unified umbrella for better policy coherence reflect how deeply communications now cuts across sectors and, I guess, our lives. As 2025 closes, the COAI says the sector's focus is firmly on strengthening digital trust and ensuring that future networks are secure, reliable, and inclusive.
