The Stock Markets See 1000 Point Jump
The markets crossed 1,000 points today with stocks like HDFC Bank hitting a lifetime high
On Episode 617 of The Core Report, financial journalist Govindraj Ethiraj talks to Rishi Agrawal, CEO and Co-Founder of Teamlease Regtech.
SHOW NOTES
(00:00) Stories of the Day
(01:10) The stock markets see 1,000 point jump
(02:26) Bank stocks in vogue as HDFC Bank hits an all time high
(06:02) Sales of houses drop 20% on year in top 7 cities
(07:25) How running a solar power plant, a sector favoured by Government, can still mean 2,735 total compliance instances in a year
(21:37) Japan pushes back on the US trade deal, Spain offers an option for US bound students
(23:29) Black box analysis begins and so does the flow of communication
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 [email protected].
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Good morning, it's Friday, the 27th of June, and this is Govindraj Ethiraj, broadcasting and streaming weekdays, usually from Mumbai, India's financial capital, but in transit right now.
Our top stories and themes
The stock markets see a thousand point jump as unusual exuberance continues.
Bank stocks are in vogue as HDFC Bank hits an all time high.
Sales of homes dropped 20% on year in the top seven cities across India.
How running a solar power plant, a sector favoured by the government, can still mean 2,735 total compliance instances in a year.
Japan pushes back on a U.S. trade deal. Spain offers an option for U.S. bound students.
And finally, the analysis of a black box from Air India's ill-fated 171 aircraft begins, and so does the flow of communication.
Markets
The stock markets crossed a thousand points today with stocks like HDFC Bank hitting a lifetime high. Now, there is unusual exuberance across markets globally, given everything else that's going on, including both war and tariff tensions, not to forget valuations in countries like India. We have a truce right now in the Middle East, but there is no truce that we know of on tariffs, and more on that shortly.
And the July 9th deadline imposed by the United States to firm up deals on tariffs is, of course, fast approaching. While both the Middle East war and tariffs would have had less impact on India than many other countries, neither provides the certainty that businesses need to expand and grow. Most businesses in the last three months have been focused on managing this new world trade environment, if directly impacted, and wondering if they would be, even if not directly impacted.
To come back to the markets, the Sensex was more than a thousand points up before closing. It was up 1,000.36 points to be specific, or almost 1.2% to close at 83,755. The NEC Nifty 50 was up 304 points to close at 25,549.
So there you are above the 25,000 mark, clearly. The broader markets were not as busy with both the Nifty Mid Cap 100 and the Nifty Small Cap 100 indices closing down about 0.59 and 0.4% each. So the big action was in bank stocks, taking the Nifty Bank Index to an all-time high, mostly thanks to heavy buying in stocks like HDFC Bank, Axis Bank, and ICICI Bank.
HDFC Bank shares rose for the third day in a row, and they hit a fresh all-time high of about 2,000.08, or 2,008 shares, along with ICICI Bank, which also went up, all of which obviously lifted the Sensex and Nifty. HDFC Bank is set to earn from the sale of shares and listing of its subsidiary, HDB Financial Services, and there's a dividend ahead as well, and there's a cautionary tale too, which is coming up. Banks are generally doing well because of a liquidity doze in the economy, along with a repo rate cut and a reduction in cash reserve ratios, all by the Reserve Bank of India.
A quick reminder, the Reserve Bank pulled a rabbit out of its hat with a 50 basis point cut earlier this month to bring repo rates down to 5.5%. Repo rates obviously influence the rate at which banks take deposits and lend funds. Now, speaking of HDB Financial Services, here is that story of caution, which is also unusual because of what you think Pedigree represents and does not. Investors who bought HDB shares in the unlisted market are now likely to take big haircuts, according to a report in the Economic Times.
The 740 rupees price band for HDB's IPO is about 40% lower than the 1,225 level it was trading at in the unlisted market. Even others had bought the stock last year, says the report, at about 1,550. Another example the Economic Times points out is of delivery company Swiggy, whose shares were changing hands at about 500 rupees in the unlisted market a month before its November 2024 IPO.
Today, it trades around 400 rupees. There are, of course, many such other examples which we will not get into. Experts advise, to whoever will listen, I guess, that lucrative as it may seem, the unlisted market is full of landmines and traps, which, of course, one does not think of when the markets are rising.
One analyst told ET that the unlisted space is full of liquidity traps and opaque pricing, there's a post-listing lock-in of six months, and the prices at which retail investors enter are quite obnoxious. Another tip from the analyst, don't rush into buying just before the IPO because listing gains are now tougher. You might be okay if you buy a few years ahead, if, of course, you have that kind of long-term investing approach.
Elsewhere, the rupee hit a 15-day high on Thursday, even as the dollar continued to show weakness on the back of concerns over the future independence of the US Federal Reserve. As we've seen, President Donald Trump wants to change the governor of the Federal Reserve and has been hinting or rather expressing this quite loudly in recent weeks and months. The rupee rose about 0.4% to close at Rs.85.70 per dollar, tracking gains in its regional peers, according to Reuters.
The dollar index fell to its lowest level since March 2022 and was last quoted at 97.1. So while the dollar had picked up because of safe haven demand during the Iran-Israel conflict that we saw just last week, the ceasefire has deflated the geopolitical risk premium, says Reuters. Meanwhile, oil prices too have settled down and appear to have found a parking place for now around $68 a barrel, a clear sign that some of that war risk premium has eased. Meanwhile, responding to reports, oil giant Shell said it has not bid for another oil giant, BP, once called British Petroleum, and said it is not actively considering such a move.
It said it was bound by UK rules, which means such a statement bans it from bidding for BP for the next six months. The Wall Street Journal quoted sources on Wednesday saying Shell was in talks to acquire BP in response to which Shell has said that no talks were taking place.
The Real Estate Market
The real estate market is showing some signs of weakness after a multi-year bull run, so to speak.
Housing sales in the top seven cities in the second quarter of 2025 saw an annual sales drop of 20% with about 96,200 units sold in the quarter against about 120,000 units in Q2 2024, according to real estate consulting firm Aniroc Research. Mumbai saw a 36% yearly decline and an 8% quarterly decline in new supply. For sales, the quarter-on-quarter overall, that's countrywide sales, numbers were a little better and rose 3%.
So overall, Mumbai metropolitan region and Pune accounted for about 48% of total sales in the top seven cities with about 46,600 units sold. Chennai was the only city to see a yearly rise in housing sales in the quarter against Q2 2024, and queue-on-queue, Chennai sales went up by almost 40%. So clearly, Chennai is seeing a sustained growth in sales starting last year and going on till now.
The Conundrum Of India's Laws
India is making a big play for renewables in general and solar in specific. As of April 2025, India's solar power installed capacity stands at about 107 gigawatts, making it the world's third largest generator of solar power. As of April 2025, India's solar power installed capacity stands at about 107 gigawatts, making it the world's third largest generator of solar power.
India is also chair of the International Solar Alliance, a treaty-based international organisation that aims to accelerate global solar energy deployment and promote sustainable development and was set up 10 years ago by India and France. On the other hand, it is no easier to run a solar power company than it is to run any business in India, as a new report from TeamLi's RegTech, a regulatory technology solutions company, has pointed out. The report highlights how, for instance, a standalone solar energy producing plant in Maharashtra, where the electricity is generated and transmitted through the grid, along with a corporate office in Haryana, must comply with 799 unique regulatory obligations spread across 646 central, 153 state and municipal requirements.
All of this translates into just 2,735 total compliance instances for a year. So is this unusual or part of a larger problem that we've still not managed to address? I reached out to Rishi Agrawal, co-founder and CEO of TeamLease RegTech. Agrawal, interestingly, also authored and quite famously a report called Jail for Doing Business, along with Gautam Shikharmani at the Observer Research Foundation last year, which documented the jail provisions across some 1,536 laws in India.
I started by asking Rishi Agrawal what had changed since his first report and more importantly, what policymakers could be focussing on and how.
INTERVIEW TRANSCRIPT
Rishi Agrawal: Just to bring you up to speed with the regulatory environment that governs doing business in the country, there are seven categories of the law that affect doing business in the country. Six are broadly applicable to every sector regardless of which industry are you from. So whether it is pharmaceutical or textile, automotive or chemicals, it doesn't matter.
The six categories of the law are broadly applicable to everyone. The seventh category of the law is industry specific which is sectoral. So if you are a bank or an NVFC, then you deal with RBI as a regulator.
If you are a food processing company, you deal with FSSAI as a regulator. If you're a telecom company, you're dealing with TRY. If you're an insurance company, you're dealing with IRDAI.
Those are just some examples. But broadly, any company deals with seven categories of the law. Now when you deal with renewable energy, the six categories of the law don't change.
Just for a reminder, 30% of India's acts, 47% of India's compliances, and a whopping 68% of criminality reside in labour laws. As I said, whether you are a pharma company or a renewable solar plant, labour laws are widely applicable to every one of them. So why 2600 plus compliances are applicable?
Hopefully, that kind of answers the question because six categories of the law are common, uniform. Of course, the specificity changes when you move from, say, a Maharashtra to Gujarat. Couple of items here, some formats of the form, some duty structure, some rate structure, some penal provisions have marginal changes.
But broadly, the law remains almost uniform.
Govindraj Ethiraj: So you're saying that if I were to take out the one which is, let's say, in this case to do with the solar industry, since your report is on the solar industry, there would be still more than maybe 2,500 compliances or compliance instances using this example?
Rishi Agrawal: Yes. So there are two things in every one of these dialogues. One is unique compliances.
Second is total compliance. Now, unique compliances are unique. That means Minimum Wages Act of 1948.
Under that act, there is one specific compliance that is a unique compliance. But if it is a monthly compliance, then there are 12 instances of the compliance that you have to do in a year. Provident Fund, ESI, all of these are examples of one unique compliance, but 12 instances because they are monthly compliances.
So when you look at number of compliances that one has to deal with, one always looks at unique compliances as well as total number of instances.
Govindraj Ethiraj: Right. So if I were to stick to solar for another moment, what do you think is an ideal? So let's say for a company or an organisation that's putting up solar power plants in different countries, how would they see India versus, let's say, I don't know, whichever country you feel is a good example of where laws are more balanced?
Rishi Agrawal: Broadly, one has to look at a black and a white in India. The moment you are informal, you don't deal with any compliance. A Minimum Wages is not applicable.
A Factories Act is not applicable. Payment of wages, payment of bonus is not applicable. Contract Labour Regulation and Abolition Act is not applicable.
A Maternity is not applicable. None of those acts are applicable. And that's why vast majority of the 63 million enterprises in India, they continue to stay informal.
But the moment you become formal, the moment you cross the 10 threshold for ESI and 20 for EPF, and you become formal, then the floodgates open for you. The number of compliances, typically they go far and beyond. The numbers disproportionately rise.
And I think we don't have a mezzanine layer in the country where we say that unless you cross another threshold, we consider you as a low-risk enterprises and we can reduce the number of obligations, we can reduce the complexity of these obligations. The moment you cross 20, suddenly the floodgates open for you. I think one thing that we need to do differently and better as a country is to create that mezzanine layer.
And we often like to use MSMEs as an example. But if you look at the broad compliance obligations affecting MSMEs, that is not necessarily anything lower than a large enterprise. The only difference is a large enterprise is an army of compliance professionals.
They have a general counsel. They have a dedicated compliance officer. They have a company secretary.
They have labour contractors. They have compliances outsourced to many companies. But in MSME, you have a lone soldier, often lonely, which is the entrepreneur trying to not just run the business, but also to manage compliances.
And that's a huge difference. And the mezzanine layer is where I'm saying we need to do a much better job.
Govindraj Ethiraj: And did you use the instance of Solar to illustrate the fact that this is a sunrise industry as opposed to many others, which are more mature industries?
Rishi Agrawal: Of course. And I often use IT and IT-enabled services as a classic example. Late 90s, when IT and IT-enabled services were picking up, government maintained a light touch regulatory regime.
We did not create a lot of hurdles in their path. We often let them be. And you see where we are 25 years hence.
I mean, it's become one of the key job creators in white-collar jobs. It has created a huge amount of foreign exchange reserves, and it has put India on the global map. And a similar thought process has to be brought in other high-tech, renewable energy kind of areas where we should not saddle our entrepreneurs with too many obligations that can compel them to stay dwarfs.
We have to bring them out, let them fly high and not worry about falling down every now and then, not let an inspector knock at their door every few minutes and so on and so forth. They should focus on growing the business. And of course, I'm not taking away the obligations and the accountability on a variety of compliance obligations.
I'm just asking us to review it. The 21st century Indian entrepreneur does not need to deal with line washing of inner walls of latrines used by contractors. We should not be worrying about spittoons scattered all over my factory.
We should not be worried about if I didn't put the disclosure on the website every year, I can be sent to jail for up to three years. All of these are obligations that may have been welcome back in 1940s and 50s. But in 21st century India, where we are the fourth largest economy and looking to grow bigger and marching forward, I think compliances need a serious rethink.
Govindraj Ethiraj: And I'm going to come to imprisonment in a second, and which also goes back to your report of three years ago. Are you saying that the IT industry today faces more regulation than it did in its sort of heydays and early growth days?
Rishi Agrawal: Not necessarily. That hasn't changed much. It is just that now it has the spotlight.
It has become bigger. It is not seen as a unique one where government's pet child was IT, the STPI and the SEZ and all of those were helping the sector. There were tax holidays and stuff like that.
I think all of them are in the rearview mirror now. So while the compliance obligations on the ground hasn't changed, the scrutiny, the number of times they will get inspected and all of that has become more in line with a regular industry now.
Govindraj Ethiraj: To go back to your report, Jail for Doing Business, which you co-authored with Gautam Chakrabani of ORF three years ago. And you talked about, if I remember correctly, something like 26,000 laws across central and state governments which could lead to imprisonment of a business person or an entrepreneur. What has changed since then?
Rishi Agrawal: Numerically, not a lot has changed. From 26,134, about 182 items got reduced as a result of Jan Vishwas 1.0. Gautam and I both served as private members on the committee chaired by Mr. Amitabh Thankh right after the publication of our report. 42 acts and 182 odd line items were decriminalised, out of which about 110 odd items affected entrepreneurs.
Now, that was at the union level. What has changed on the state level is something which was an invisible narrative about two, three years ago has now become more like an institutionalised dialogue at a state level. We are currently, as a company at TeamLease, we are working with about five to six different states where the states are showing a lot more willingness to examine their regulatory cholesterol that ails doing business in their states.
There's a positive competition at that stage. They are looking to make themselves more attractive. And that's where they are asking us, listen, help us identify what these jail clauses are, which ones of them are state level, which ones of them are at the concurrent level.
What should be done? We have proposed something called a reversing a gaze approach, where we are saying that there should be a principles orientated approach to criminalisation. Only when certain things meet certain qualifying principles, there should be an option for criminalisation.
Rest, all of them should be dealt with by financial penalties and so on and so forth. Now, you can have prohibitively high financial penalties for all we care. But the sword that is dangling on the necks of entrepreneurs, which is somebody can bring in a warrant on a Friday evening and put you behind bars for a couple of days under the guise of harassment is something that we think should go away.
And we think certain states are doing a better job. There is more institutional energy being deployed. They are focussing on this better than some other states.
There is greater discussion. The sense of urgency has gone up. They are taking executive leadership in actually identifying these clauses, isolating them.
Obviously, none of them are in line with what we would typically expect for a country of our size, scale and ambition. But I think we are moving in the right direction.
Govindraj Ethiraj: So of those 26,000 laws, you said a few hundred laws and I'm sure those are impactful ones have been now decriminalised. What would be the centre state split roughly?
Rishi Agrawal: Out of 26,134, about 5,200 are union and just about 20,800 or something like that at the state level. There are many subjects which are at the union level and many items at the state level. And then there are a few like labour, which are at the concurrent level.
Anything which is union, typically we would look to union government for legislations and executive changes. Anything which are at the state, states have to do the needful. Union can't do anything.
And then there are concurrent items where union sets the broad outline of the act and the states create the rules under them. So there are these three unique categories. Each one of them will have their own actions and outcomes.
Union has done phase one. Madam Nirmala Sitharaman in her budget speech on February 1 announced that they are going to come out with Jan Vishwas 2.0. We have continued to participate in that exercise and contribute to it. But the needle is not moving a whole lot.
We're looking at about 100 plus items, which is what she announced in the union budget as well. So I think we need to do a lot better. There has to be greater ambition.
Govindraj Ethiraj: Right. And last question. So you're saying that basically, since states control a bulk of these regulations, so 21 out of 26, and we're only talking about criminalisation right now.
If there is more progress made at the state level and that too within some states, then clearly that number could come down faster. The overall number could come down faster. But it also would seem that basically some states who can, let's say decriminalise faster are likely to become more attractive from a doing business point of view.
Rishi Agrawal: Well, absolutely. There are a few states who have already stated a trillion dollar economy as their GSDP kind of target. Those states, they are currently at 300 billion plus minus here and there.
If they have to become three times of their current size, what got us here will not take us there. So if you have to grow three times, we cannot wait another century to get there. So obviously a lot more rethink is required.
How well they are positioning themselves as attractive destinations for investment is going to be the key. And towards that, these are all important initiatives. The less hostility you have embedded in your regulations, the better off you will be.
And some states obviously will emerge as clear winners because they are focussing on it. And whether some of these items seem very openly, but they have a signalling value which goes to the industry, both domestic as well as international. When international companies are looking to make foreign direct investment, these are factors that add up to their attractiveness and so on.
I think it will go a long way in signalling that we are welcoming investments and we are not looking to harass people. We are removing disproportionate penalties in our laws to make sure that investments can become easier and more forthcoming.
Govindraj Ethiraj: Rishi, thank you so much for joining me and it was a pleasure speaking with you.
Rishi Agrawal: It's a pleasure always speaking to you, Govind. Thank you for having me on the show.
Japan Pushes Back, Highlights Trade Issues
We touched on the July 9th United States government self-imposed deadline for tariff deals, including with countries like India, which apparently are not making as much headway as we would like to, though there is not much clarity either.
Meanwhile, Japan's chief trade negotiator said the country cannot accept the US 25% tariffs on cars, adding that the automakers in Japan produce far more cars in the US than they export to America. Japanese car makers make about 3.3 million cars in the US every year, which is much more than the 1.37 million that they ship there. According to Japan's trade negotiator, Ryosei Akazawa, he was leaving for Washington to hold a seventh round of trade negotiations with US counterparts, according to Bloomberg.
He also pointed out that Japanese companies have invested more than $60 billion in the US and created 2.3 million local jobs. He said that they've repeatedly explained to the US that Japan's automobile industry has made an enormous contribution to the US economy and we intend to keep explaining this clearly and seek understanding. In any case, we consider the 25% automobile tariff to be unacceptable.
He also said that of the 3.3 million cars made in the US by Japanese companies, about 300,000 are shipped from the US to other nations, also helping a trade surplus for the US. All of this, of course, illustrates once again and highlights how complex trade negotiations are and the many nuances that are involved, including for countries like India where talks are on, but we've not seen any clear headway. The Bloomberg report also said that auto tariffs are a sticking point in the bilateral negotiations as Washington focuses on its deficits in the sector while Tokyo tries to protect its key economic pillar.
And there have been six rounds of talks for more than two months and there has been no real agreement.
Some Clarity On The Air India Crash
After some avoidable silence on the issue, the government has finally revealed details of progress on the Air India Flight 171 crash investigation.
Aviation analysts have been pointing out and the core report also highlighted two weeks ago that information, even if preliminary, must be shared as soon as possible and also the problems or other dangers of an information vacuum as we are now seeing. International aviation analysts have pointed out that in similar cases, there are periodic and regular media engagements and press conferences and attempts to share authentic details as they emerge, while here, what we've seen is, of course, something that's been fairly ad hoc and intermittent, even when that has been the case. The Ministry of Civil Aviation said on Thursday that investigators probing the Air India Flight AI 171 crash have successfully extracted data from the aircraft's black boxes, the cockpit voice recorder and flight data recorder at the Aircraft Accident Investigation Bureau Lab in Delhi.
It also said that the analysis of that extracted data is currently underway and that the memory module of the front black box was accessed and downloaded on 25th June and that was a key step in the investigation. It said that these efforts aim to reconstruct the sequence of events leading to the accident and identify contributing factors to enhance aviation safety and prevent future occurrences. They said that the cockpit voice recorder and the flight data recorder were recovered from the crash site on 13th June and 16th June.
The crash happened on the 12th of June. The front unit was apparently found on a building rooftop while the rear was located in the debris and both were moved under heavy security to Delhi on the 24th of June by Indian Air Force aircraft. Flight AI 171 bound from Ahmedabad to London crashed shortly after takeoff from Ahmedabad on the 12th of June and it killed 241 people on board and 34 on ground.
Only one passenger survived, which also makes it one of the worst aviation disasters India has seen. The government has emphasised that the investigation is being conducted in a time-bound manner and in full compliance with domestic and international obligations, but it is clear that there should be a timetable for periodic interactions on this matter and statements must be released even if there is no notable development, so to speak, and to address this ever-growing information vacuum, particularly in this era of social media.
