Economy

Online platforms have transformed consumer behavior, especially in urban areas. Instead of buying small quantities frequently (“top-up”), many now prefer stocking up. This shift, fueled by convenience, variety, and competitive pricing, has reshaped how products and services are purchased, particularly in metro cities.

Driven by this shift, India’s online grocery market is expected to rise from $3.95 billion in FY21 to $26.93 billion by 2027, growing at a strong CAGR of 33%. The e-commerce industry is set to reach $325 billion by 2030, driven by the growing adoption of online services like e-commerce and edtech.  Source: IBEF

India’s overall digital economy is on track to hit $1 trillion by 2030, up from $537.5 billion in 2020.

India has approximately 936.16 million internet subscribers, with around 350 million active online users regularly making transactions.

Growth of FMCG on Quick-Commerce Platforms

• E-commerce and quick commerce sales have surged 30% over five consecutive quarters year-on-year, driven by consumer demand for convenience and variety. Ready-to-eat foods led e-commerce growth with a 52% increase in sales (MAT September 2024 vs. 2023), followed by salty snacks and edible oils at 41% each, and biscuits and packaged atta at 40% and 39%, respectively.
• Large FMCG companies like Nestle, ITC, and Hindustan Unilever report high double-digit growth in major cities, especially through platforms like Blinkit, Swiggy Instamart, Zepto, and BBNow.

Impact on Traditional Trade

• Neighborhood Kirana stores still account for 85% of FMCG sales nationwide, but quick-commerce is growing fast in cities. This shift has made companies like Dabur and Nestle adapt their stock in traditional stores.

Changing Buying Patterns

• Shift to Online Groceries

More urban households have turned to online grocery platforms for weekly or monthly shopping. Companies like BigBasket, Grofers, and Amazon Fresh have revolutionized this space.

Recently, consumers have started buying in bulk, including 5kg or 10kg packs of staples like rice, oils, and atta, on quick-commerce platforms such as BB Now, Zepto, Blinkit, and Amazon, a shift from previous trends.

• Preference for Direct-to-Consumer (D2C) Brands

Consumers opt for niche D2C brands such as Plum, The Minimalist, Sleepy Owl, and The Souled Store, which offer high-quality products, often bypassing traditional retail channels.

• Rise of Subscription Models

From meal kits to beauty boxes, subscription models cater to convenience-driven buyers who value curated and recurring services.

• Surge in Second-Hand Marketplaces

Platforms like OLX and Quikr are making sustainable choices like buying and selling pre-owned goods more accessible.

Key Drivers Behind the Change

Convenience 

Urban consumers prioritize convenience in their shopping, and it’s clear why. With hectic lifestyles, they don’t have the time to visit stores. Online platforms have come to the rescue, providing doorstep delivery, flexible return policies, and cashless payments, making shopping more effortless. 

Wider Variety and Choices

E-commerce sites and apps offer access to various products that might not be available locally. As an urban shopper, you can easily compare prices, brands, and features in one place, making your shopping experience more convenient and tailored to your needs.

Competitive Pricing and Discounts

Online platforms are perfect if you keep an eye on your budget and love finding offers, discounts, and cashback deals. They help you get better pricing and more value for your money—making it a smart way to shop!

 Integration of Technology

AI recommendations, voice search, and AR features make online shopping more personal and fun. They help you find what you’re looking for faster, making the shopping experience more interactive.

What Are The Benefits of This Shift?

Consumers

• Convenience: You no longer have to leave your home to shop for your needs. With services like home delivery and pick-up, everything you want comes straight to your doorstep, saving you time and effort.
• Cost Savings: Brands know you’re always looking for discounts and special deals. It catches your attention when they offer great pricing or limited-time offers, making you feel like you’re truly getting a bargain.
• Customization: With personalized recommendations, shopping is tailored for you. Thanks to data analytics, brands can send you offers and suggestions based on your preferences or past purchases, making the experience more helpful and engaging, not intrusive.

Businesses

Businesses can now reach more significant markets without investing heavily in physical stores. E-commerce has helped smaller businesses grow and compete with the big players without breaking the bank. Even the most prominent brands have been using e-commerce to expand their reach and keep customers returning by making shopping more accessible and convenient for everyone.

Gig Workers

With the rise of online shopping, more opportunities have opened for delivery agents, warehouse staff, and tech support teams. It’s great to see how this shift has created jobs and supported so many people behind the scenes of our online purchases.

Technology Providers

Payment gateways, logistics teams, and AI solution providers are thriving as online shopping grows. It’s exciting to see how their services are in such high demand, helping make your online shopping smoother and more efficient every step of the way.

Who Is Already Benefiting?

• E-Commerce Giants and Digital Payment Providers
  Platforms like Amazon, Flipkart, and Meesho are transforming how we shop, offering everything from fashion and electronics to daily essentials. At the same time, apps like Paytm, PhonePe, and Google Pay are booming as more people and businesses embrace online transactions, making payments quick and hassle-free.
• Content Creators and Logistics Teams
  Social media influencers also ride this wave, collaborating with brands and thriving in online and social commerce. Meanwhile, logistics companies managing last-mile deliveries are busier than ever, reshaping urban delivery systems to keep up with the growing demand.

The Impact of E-Commerce on Traditional Retail

As online shopping grows in urban markets, it impacts traditional retail channels. While neighborhood Kirana stores still play a significant role in FMCG sales nationwide, their influence in urban markets has steadily declined. E-commerce platforms are rapidly replacing physical stores, particularly in large cities, where quick commerce has become the preferred shopping method.

FMCG companies, including major players like Nestle, ITC, and Hindustan Unilever, have noted this shift in their recent earnings reports. To meet the growing demand, these companies are now focusing more on e-commerce and quick-commerce platforms. 

The Future of Urban Buying Patterns

As digital penetration continues to rise, more consumers, especially in urban areas, will embrace online shopping for everything from groceries to electronics. The growth of e-commerce platforms and the rise of quick-commerce services will continue to reshape the retail landscape. However, companies must keep sustainability in focus and adapt to technological advancements. 

Conclusion

Online platforms are reshaping urban shopping trends by offering unmatched convenience, a vast range of products, and competitive pricing. With e-commerce expected to reach $325 billion by 2030, urban consumers are increasingly embracing the digital shift, marking the beginning of a new era in retail. 

As the demand for online and quick-commerce platforms grows, businesses must continue to adapt and innovate to meet the needs of this rapidly changing market.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

FAQs

The Indian stock market has been experiencing an exciting trend—a surge in global funds purchasing domestic shares. India has become a leading hub for dealmaking, with companies securing a record $28.4 billion through IPOs and primary share offerings this year, as reported by Prime Database.

This phenomenon highlights India’s growing appeal as a favorable investment destination. Let’s investigate why this happens, its implications, and key contributing factors.

Key Insights into India’s Record Primary Market Activity

India: A Global Dealmaking Hotspot

Record Capital Raised: According to the Prime Database, companies in India raised a historic $28.4 billion through IPOs and primary share offerings in 2024.

Significant Growth: This is more than double the capital raised in 2023, showcasing India’s growing prominence in global dealmaking.

Strong IPO Performance

Impressive Post-Listing Gains: IPOs in 2024 delivered an average gain of 24% on their first trading day.

Continued Enthusiasm: Investor interest remains robust, even as broader market indices face corrections.

Valuation Challenges

Expensive Market Levels: Despite the correction, the Nifty continues to trade at nearly 20 times its 12-month forward earnings, ranking among the most expensive globally.

Primary Market Purchases Hit a New High

Record-Breaking Year: Primary market purchases, including IPOs and preferential share sales, reached $11.5 billion in 2024.

Surpassing Past Records: According to Central Depository Services Ltd, this figure exceeds the previous high set in 2021.

Global Fund Activity: Contrasting Trends

Secondary Market Selling: Global funds sold over $13 billion in shares on the exchanges, contributing to a market correction.

Impact on Indices: The NSE Nifty 50 index has entered correction territory, falling over 10% since its September peak. Source: Money control

Foreign Investor Strategy

Focus on New Issues: Foreign investors target IPOs and other new issuances for faster return potential.

Selling in Secondary Markets: According to industry experts,  expensive valuations in the secondary market are prompting profit-booking. 

Why Global Funds Are Targeting Indian Markets

1. Economic Resilience

India’s economy has shown remarkable resilience, bouncing back strongly post-pandemic. Key economic indicators like GDP growth, rising exports, and a robust manufacturing sector have positioned India as an attractive market for global funds.

2. Reforms and Policies

Pro-investor government policies, including taxation reforms, manufacturing incentives, and ease of doing business, have further boosted foreign interest in Indian shares. The country’s push toward digitalization and sustainability also aligns with global investment trends.

3. Attractive Valuations

Amid volatility in other global markets, Indian companies are offering competitive valuations. Certain sectors, such as technology, green energy, and finance, present lucrative opportunities for foreign institutional investors (FIIs).

Key Sectors Driving Global Investments

1. Technology

India’s global leader in the IT sector continues to attract substantial investments. Companies focused on cloud computing, artificial intelligence, and fintech have become magnets for global funds.

2. Renewable Energy

India’s ambitious renewable energy goals have caught the attention of global investors. Solar, wind, and green hydrogen projects are receiving record funding, driven by the worldwide push toward net-zero emissions.

3. Consumer Goods

India’s growing middle class and increasing spending power encourage investments in FMCG and consumer-focused sectors.

Data Highlights: The Surge in Purchases

In recent months, there have been record inflows of foreign funds into domestic equity markets. Key data points include:

• Volume of Investments: A marked increase in block trades by foreign institutional investors.
• Top Stocks: Blue-chip stocks in the banking, technology, and energy sectors have emerged as favorites.
• Market Impact: Benchmarks such as the Sensex and Nifty 50 have touched new highs, driven by robust foreign inflows.

Global and Domestic Factors Supporting the Trend

1. Global Economic Conditions

• Interest Rates: Despite rising interest rates in developed economies, Indian equities remain competitive due to their high growth potential.
• Diversification: Global funds are reallocating portfolios to hedge against risks in other markets, especially the US and Europe.

2. Domestic Stability

• Political Stability: A stable government and upcoming elections often increase investor confidence.
• Market Maturity: India’s equity market is more transparent and accessible than ever, supported by regulatory oversight and technology-driven platforms.

Implications of Record Purchases

1. For the Stock Market

• Increased Liquidity: Greater foreign participation boosts liquidity, making the market more efficient.
• Market Rally: Higher foreign inflows often lead to market rallies, benefiting domestic investors too.

2. For Companies

• Capital Availability: Companies can raise more funds through IPOs and secondary offerings, enabling growth and expansion.
• Global Exposure: Increased FII participation often leads to improved corporate governance and global visibility.

3. For the Economy

• Growth Opportunities: Investments in critical sectors create jobs and drive economic growth.
• Currency Stability: Foreign inflows support the rupee, reducing volatility in the foreign exchange market.

Challenges and Risks

While the record purchases are a positive sign, there are risks and challenges to consider:

• Dependence on Foreign Inflows

Over-reliance on FIIs can lead to market instability if global factors cause a sudden outflow.

• Valuation Concerns

With rising investments, some stocks may become overvalued, increasing the risk of corrections.

• Geopolitical Uncertainties

Global tensions and trade wars could impact foreign fund flows, creating uncertainties in the Indian markets.

What Lies Ahead?

• Sustained Growth

Experts predict India will continue attracting global funds thanks to its economic growth and favorable demographics.

• Focus on Emerging Sectors

Sectors like electric vehicles, biotechnology, and digital infrastructure will likely see increased investment.

• Regulatory Support

Continuous efforts by regulators like SEBI to enhance market transparency will further encourage foreign investments.

Conclusion

The surge in domestic share purchases by global funds results from India’s growing prominence in the international economic landscape. While this trend benefits the market and the economy, maintaining a balance through solid policies and market reforms will be essential. 

Know more about:
IPOs | Current IPOs | Upcoming IPOs | Listed IPOs | Closed IPOs | IPO Performers

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

FAQ

India’s sports market is set for unprecedented growth, with the industry expected to reach $130 billion by 2030. This projection, revealed in the Deloitte-Google Think Sports report, underscores India’s evolving sports ecosystem, powered by rising sports viewership, digital innovations, and increased investments across multiple sports segments. 

The report emphasizes the potential for the sports sector to create 10.5 million jobs while contributing $21 billion in indirect tax revenue, showcasing its significant role in driving economic growth and employment opportunities. Source: Times of India

This article analyzes the report’s findings, breaking down the factors driving this growth and what this means for India’s sports industry.

A Rapidly Growing Sports Economy

The Deloitte-Google report highlights that India’s sports industry has experienced significant growth over the past decade. Major sporting leagues, endorsements, and viewership have grown substantially, with cricket, India’s most popular sport, leading the charge. 

However, non-cricket sports like football, kabaddi, and badminton are also gaining traction. Increased participation in diverse sports and a growing digital landscape further amplify the market.

Since 2017-18, India’s sporting goods exports have increased at an annual growth rate of 11%. Major exports include athletic and gymnastics equipment, cricket and football gear, nets, exercise equipment, boxing items, toys, games, protective gear, sportswear, carrom boards, and hammocks.

India’s sports fanbase has expanded to 655 million people, with Gen Z accounting for 43%, fueling a growing demand for interactive and personalized experiences. The Deloitte-Google Think Sports report highlights how sports emerge as a significant driver of economic growth and a force for social change. This includes empowering youth and creating employment opportunities, demonstrating the industry’s broader impact beyond entertainment. Source: Business Today

Key Highlights of the Report

Expanding Interest Beyond Cricket

• Cricket Dominates, but Other Sports Are Gaining Ground: While cricket is India’s most-followed sport, the report shows a rising interest in sports like kabaddi and football, which have 120 million and 85 million fans, respectively.
• Multi-Sport Fandom on the Rise: Around 90% of Indian sports fans follow multiple sports, creating broader investment opportunities across sports sectors.

Shift to Digital Sports Consumption

• Gen Z’s Digital Engagement: 93% of Gen Z fans access sports content online, with a growing preference for on-demand, non-live content over live events. They spend 20% more time on it.
• Broadened Fan Demographic: Fans are increasingly diverse, with 36% being women and 59% residing in rural areas.
• Growth in Sports Apparel: Interest in fitness has fueled demand for sports apparel, which is projected to double to $58 billion by 2030. Source: Business Today

Technology-Driven Transformation in Sports

• Advancements in Sports Tech: The sports technology market is anticipated to hit $1 billion, propelled by innovations enhancing fan engagement and operational efficiency.
• AI in Talent Development: AI tools are already revolutionizing scouting and training; meanwhile, e-learning platforms broaden access to sports resources nationwide.
• Opportunities in AI-Driven Personalization: AI offers a pathway to immersive, personalized experiences and greater digital accessibility for fans.

Sports as a Catalyst for Nation-Building

• Socioeconomic Impact: Experts believe that sports in India have the potential to unify communities and build a resilient, inclusive society, aided by AI, cloud technology, and grassroots initiatives.
• Public-Private Partnerships for Progress: They emphasize that to harness this potential, challenges in access, infrastructure, and equity must be addressed, recommending public-private partnerships to advance India’s sports ecosystem.

A Pivotal Moment for Sports in India

• Path to Unlocking Sports Value: Industry experts underscore India’s sports market is transformative, marked by multi-sport fandom and Gen Z’s engagement.
• Innovation and Engagement Opportunities: These trends offer companies unique chances to connect with India’s large, passionate fanbase, setting the stage for further innovation and engagement.

Drivers of Growth: Key Factors Influencing the Market

1. Rise of Digital Platforms and OTT Media Digital streaming services have transformed sports consumption in India, allowing fans to access live matches and behind-the-scenes content on the go. OTT platforms like Disney+ Hotstar and JioCinema provide a personalized and immersive sports experience, reaching new audiences and further monetizing sports content through ads and subscriptions.

Sports Media Spends

2. Increased Sponsorship and Brand Investments With major corporations and brands investing heavily in sponsorships, the visibility of sports in India has expanded significantly. Sponsorships from national and international brands drive the growth of sports beyond cricket, helping leagues like the Indian Super League (ISL) in football and the Pro Kabaddi League reach wider audiences.
3. Sports Infrastructure Development India has ramped up its investment in sports infrastructure, building modern stadiums and facilities to host national and international events. The government’s “Khelo India” initiative is furthering these efforts, aiming to promote sports at the grassroots level and develop a robust sports ecosystem across the country.
4. Youth Engagement and Grassroots Initiatives India’s youth, which makes up a significant portion of its population, are increasingly engaging in sports, not only as viewers but also as participants. Government programs like Khelo India and private youth sports academies foster talent and promote sports culture. With more youngsters entering the sports scene, the future of India’s athletic talent pool looks promising.
5. Technological advancements in sports management technology are becoming integral to India’s sports industry. Technology enables teams to improve efficiency, from data analytics to player performance tracking, while fans enjoy enhanced experiences. Innovations like AR/VR experiences in live sports and AI-driven analysis are drawing more engagement and investment in sports technology.

Emerging Opportunities in the Indian Sports Economy

• Media Rights and Broadcasting Opportunities The demand for sports content creates lucrative opportunities for broadcasters. Media rights for major leagues, especially cricket tournaments like the Indian Premier League (IPL), attract multi-billion-dollar deals, contributing significantly to the sports economy. As viewership grows, media rights will remain a major revenue source.
• Though relatively new in India, merchandising and licensing are poised for growth as fans show increased interest in sports merchandise like jerseys and gear. This trend is not limited to cricket but extends to other sports, with Indian football and kabaddi leagues starting to explore merchandise as a revenue stream.
• Rise of the Fitness and Wellness Industry The shift toward health and wellness, particularly post-pandemic, has fostered a greater interest in physical fitness and sports. Gyms, fitness programs, and sports academies are tapping into this trend, leading to a complementary rise in related sports industries. This focus on wellness also encourages more individuals to participate in sports as part of a healthier lifestyle.

The Role of E-sports and Fantasy Sports

The surge in e-sports and fantasy sports platforms, such as Dream11 and MPL, has created a new frontier within the sports market. These platforms are highly popular among younger audiences, and with investments pouring in, they are poised to become a substantial part of the overall sports economy. E-sports tournaments and events are becoming regular fixtures, supported by significant sponsorships and partnerships.

• Fantasy Sports: Platforms enable fans to create fantasy teams based on real matches, boosting fan engagement and attracting millions of users.
• E-sports Growth: Competitive gaming events draw sponsorships and create new opportunities for brand endorsements.

Challenges Facing the Indian Sports Economy

While growth is promising, the sports market in India faces certain challenges:

1. Infrastructure Gaps – Despite advancements, the quality of sports infrastructure outside urban areas remains inadequate. Investments are needed to bring facilities to smaller towns and rural areas.
2. Limited Sports Culture Beyond Cricket – While cricket dominates the sports landscape, there is still limited viewership and engagement for other sports, though this is changing slowly.
3. Talent Development and Retention—Talent development across sports disciplines needs to be prioritized for sustained growth. Retaining trained athletes who can excel nationally and internationally remains a challenge.

What’s Next for India’s Sports Industry?

The Deloitte-Google report concludes that, with sustained investment, India could become one of the world’s top sports markets by 2030. International events like the Olympics and Commonwealth Games inspire more Indians to pursue sports professionally. 

India’s sports market is on the cusp of transformative growth, with an expanding digital ecosystem, increasing sponsorship investments, and a rising sports-conscious population. If current trends continue, India’s sports industry will contribute substantially to the economy and cultivate a robust sports culture across the nation.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

FAQs

With Donald Trump’s victory securing him a second term in the White House, many wonder how his leadership will shape global financial landscapes—especially for Indian investors.

For those following US-India trade ties, Trump’s win has implications for trade policies, market fluctuations, and investment flows. But what does this mean specifically for Indian markets and investors?

Immediate Market Response To Donald Trump Win

A Donald Trump win triggered a swift response in the Indian markets. On November 6, Indian stock indices rallied, with the Nifty climbing above 24,500 and the Sensex jumping by 900 points, closing at 80,378.13. Gains were broadly distributed, particularly in sectors like IT, realty, oil & gas, and power, which surged by over 2%.

The mid-and small-cap indices also experienced a 2% boost, outperforming the benchmark. These gains suggest optimism among Indian investors, largely due to Trump’s business-friendly policies, which may align well with India’s growth sectors.

Bitcoin Surge and Impact on Indian Crypto Markets

As election results came in, Bitcoin crossed the $75,000 mark for the first time, indicating a solid rally fueled by “Donald Trump Trades.” Indian crypto exchanges such as CoinSwitch and CoinDCX reported increased trading volumes, with heightened interest linked to Trump’s endorsement of digital assets.

This shift points to rising optimism around cryptocurrency in India. It suggests that Trump’s pro-crypto stance could positively impact Indian crypto markets and investments in exchange-traded funds (ETFs) that offer exposure to digital assets. Source: Moneycontrol

Foreign Portfolio Inflows: A Renewed Focus on India

Donald Trump’s victory may also influence foreign portfolio investments (FPIs) in Indian markets. In October, FPIs shifted from net buyers to net sellers, with a sell-off of Rs 94,017 crore. However, Trump’s return could prompt renewed foreign investments in India, especially given the alignment of US-India trade interests.

With India viewed as a strategic alternative to China, a realignment of supply chains might encourage FPI inflows in technology, defense, and clean energy sectors. Both countries’ efforts to bolster mutual economic ties could drive steady capital inflows into the Indian markets, possibly reversing the recent trend of FPI outflows. Source: BusinessToday

Mutual Fund Performance and US-India Diversification

Investors in US-focused Indian mutual funds saw substantial returns in 2024, with some funds delivering gains of up to 38%. Notably, funds like the Mirae Asset NYSE FANG+ETF Fund of Funds, Mirae Asset S&P 500 Top 50 ETF, and Bandhan US Equity FoF recorded returns of 38%, 35%, and 31%, respectively. In comparison, domestic funds in India’s large, mid-, and small-cap categories posted 16%, 26%, and 25% returns, respectively. 

As US-focused funds continued to outperform, Indian investors benefited from geographical diversification. Given Trump’s economic priorities, US markets could see continued stability, which would favor US-focused investments within Indian mutual funds and maintain robust returns for investors.
Source: MoneyControl

Trade Relations and Manufacturing Opportunities for India

Trump’s policies, often characterized by his “America First” approach, could benefit Indian manufacturers and exporters. His plans to tighten trade restrictions on China might lead more US companies to shift manufacturing operations from China to India.

This shift could open export opportunities for Indian businesses in the machinery, textiles, and chemicals sectors as companies look to diversify their supply chains. Stronger dollar values could further boost Indian exports, particularly in telecommunications, pharmaceuticals, and automotive components. Source: MoneyControl

Strengthening India-US Trade Relations

Under Trump’s administration, India and the US have built a solid partnership grounded in mutual economic goals, technological collaboration, and trade growth. Trump’s pro-business stance could deepen this alliance with the US, already a leading investor in India across sectors like technology, infrastructure, and renewable energy.

As the demand for skilled Indian workers rises in industries pivotal to both countries, India’s role in the global digital economy could strengthen, promoting cross-border growth in tech, renewable energy, and sustainable development. Source: Livemint

Geopolitical Considerations and Global Tensions

Trump’s foreign policy, particularly regarding Ukraine and the Middle East, may have ripple effects on global markets, including India. Analysts predict that Trump could push for a ceasefire in the Ukraine conflict, potentially easing geopolitical tensions.

In the Middle East, he has been vocal in his support for Israel and Saudi Arabia, and his policy on Iran may become even more assertive. Regarding China, while continuity is expected, Trump’s trade stance remains steadfast, potentially creating indirect opportunities for Indian industries as US-China trade relations stay strained.

Currency Implications and Rupee Volatility

The Indian rupee may experience downward pressure as the US dollar strengthens under Trump’s leadership. On Wednesday, the rupee closed at a record low of 84.28 per dollar. A stronger dollar could make Indian exports more competitive and increase import costs.

To manage the rupee’s volatility, the Reserve Bank of India (RBI) has maintained a significant foreign exchange reserve of $684.8 billion as of October 25. The RBI stands ready to use these reserves to stabilize the rupee in case of any adverse impacts from global market volatility, ensuring excellent stability in the domestic currency markets. Source: Livemint

A Potential Shift in the Dollar’s Strength

Trump has often favored a weaker dollar to boost American manufacturing competitiveness. For India, a weaker dollar could reduce export profits and potentially make the country less attractive for foreign investments.

While weakening the dollar could boost US manufacturing, it poses challenges, as a weaker dollar might drive inflation. Implementing this would be complex, involving a delicate balance between inflation control and supporting American industry. Such policies may have cascading effects on Indian trade, investment, and currency stability.

Conclusion

Donald Trump’s second term in office presents Indian investors with opportunities and challenges. With potential shifts in trade policies, the strengthening of India-US relations, and volatility in currency and crypto markets, Indian investors are likely to feel the ripple effects across multiple sectors.

As markets respond to these global changes, Indian investors can expect opportunities in diversified mutual funds, sectors aligned with manufacturing and export, and sectors poised for growth as trade between the two countries deepens.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

New company formation is often seen as a crucial indicator of economic health, signaling growth, innovation, and a vibrant business landscape. However, recent reports reveal a noticeable decline in registered new companies, pointing to challenges in the current business climate. 

This slowdown, dubbed “business blues,” has sparked discussions on the factors contributing to the drop, potential long-term impacts, and strategies to rejuvenate entrepreneurial enthusiasm.

Decline in New Company Registrations

Over the past three months, new company registrations have steadily declined, with the most significant drop seen among high-investment ventures across various states. This downturn, often viewed as an indicator of entrepreneurial activity, raises concerns about a possible slowdown in business formation.

Despite the recent decline, new company registrations from January to September 2024 remain 12% higher than in the same period in 2023. However, this growth mainly reflects strong activity in the early months of 2024, as recent months indicate a clear downturn in new registrations.

September marked the third consecutive month of fewer registrations than the same period in 2023, and preliminary data for October suggests this trend may extend further. Source: Mint

Year-on-year change in registrations of new companies (%)

	2020	2021	2022	2023	2024
Jan	2	-14	12	0	18
Feb	-11	35	4	-81	511
Mar	-45	199	-13	-13	27
Apr	-69	291	27	5	-4
June	14	16	24	-13	12
July	54	-6	-1	9	-11
Aug	64	-19	9	6	-4
Sep	81	-0	-18	4	-21
Oct	68	-4	-33	46
Nov	27	6	-10	4
Dec	19	-7	21	-8

Capital Commitments: A Cautionary Signal for Entrepreneurship

Data on capital commitments provides additional insight into the current state of entrepreneurial activity. Paid-up capital, the initial investment shareholders contribute when starting a company, reflects both financial commitment and business ambition. Previously, government regulations required a minimum paid-up capital of ₹1 lakh, though this rule was removed in 2015.

Source: Mint

Majority of New Companies Formed with Low Initial Investment

Most new companies are registered with a paid-up capital of up to ₹1 lakh. This trend has grown over the last six years, with the share of companies in this category increasing from around 72% in 2019 to approximately 83% in 2024.

Source: Mint

Decline in High Capital Ventures

While the number of registered companies has risen, the share of new companies with higher paid-up capital—a sign of larger business ambitions—has either stalled or dropped between 2022 and 2024. This decrease in higher capital ventures highlights a potential slowdown in large-scale entrepreneurial commitments.

Registrations in higher capital bands dropped

	Jan-Sep 2022	Jan-Sep 2023	Jan-Sep 2024
Less Than Rs.1 Lakh	101,805	97,724	113,084
Between Rs. 1 to 5 Lakh	14,018	10,797	11,035
Between Rs. 5 to 10 Lakh	8,826	7,350	7,546
Between Rs. 10 Lakh to 1 Crore	6,289	4,608	4,032
More Than 1 Crore	2,539	1,243	679

Shift from Post-Pandemic Growth Trends

This decline contrasts sharply with post-COVID-19, during which new business registrations rose consistently. This increase was driven by a surge in entrepreneurial activity and the expanded compliance requirements from a broader scope of the Goods and Services Tax (GST).

Negative Trends in Company Registrations

Significant Drop in Q2 of FY 2024-25

The most substantial decline in new company registrations occurred in the second quarter (July-September) of FY 2024-25. Analysis at the state level shows that this decline spans multiple states, with double-digit drops in many cases. In terms of company registrations, each of the top 10 states experienced a decrease in new registrations during this period.

• Top States with Maximum Drop

Among the top three states for company registrations, significant declines were recorded:

• Maharashtra: down by 13.2%
• Uttar Pradesh: down by 16.5%
• Delhi: down by 14.9%

• Exceptions in Andhra Pradesh and Manipur

Only two states, Andhra Pradesh and Manipur, saw an increase in registrations compared to the same period in 2023.

• Andhra Pradesh: Experienced an uptick in registrations following the installation of a new political administration in June 2023.
• Manipur: Registered a rise in activity despite the social unrest that began in May 2023, impacting the economic environment.

Rise in Limited Liability Partnerships (LLPs)

Another shift in business registrations is the increase in Limited Liability Partnerships (LLPs), an alternative to private limited companies that face fewer regulatory requirements. LLPs are often ideal for small businesses that do not plan to seek external funding.

Between January and September 2024, LLP registrations rose by 39% compared to the same period in 2023. Consequently, LLPs now comprise a larger portion of total registrations, increasing from 20-25% in past years to 25-30% in 2024.

Source: Mint

Impact on the Economy

A decline in new company formations has widespread economic growth, employment, and innovation implications. Here are some potential impacts of this trend:

1. Reduced Job Creation

• Fewer Employment Opportunities: New companies are a major source of job creation. When fewer businesses start, employment opportunities dwindle, affecting local economies and increasing unemployment rates.
• Stagnation in Workforce Development: New businesses often bring fresh talent into the workforce and foster skills development. Without new company formations, the labor market risks stagnation.

2. Slower Economic Growth

• Lower GDP Contributions: New companies contribute significantly to GDP through investments, taxes, and consumer spending. A slowdown in new business formation reduces these contributions, potentially impacting overall economic growth.
• Innovation Bottleneck: Startups and small businesses are traditionally at the forefront of innovation. A decline in new companies could limit technological advancements and slow the introduction of innovative products and services.

3. Limited Competition

• Market Dominance of Established Firms: A reduced influx of new companies can lead to monopolistic trends, where a few established players dominate the market, potentially driving up prices and limiting consumers’ choices.
• Reduced Pressure for Innovation: Existing companies may face less competitive pressure to innovate or improve their services, which could stagnate industry standards and slow down advancements.

Potential Solutions to Encourage New Business Formation

To counteract this trend, creating an environment that supports and encourages entrepreneurship is essential. Here are some steps that can be taken to revive the enthusiasm for new business formation:

1. Reducing Regulatory Burdens

• Simplifying Compliance Requirements: Streamlining compliance processes can make it easier for new companies to start. This could include reduced paperwork, online registration, and one-stop portals for approvals.
• Tax Incentives for Startups: Offering tax breaks or subsidies for new businesses could reduce their financial burden in the early stages, making it easier for entrepreneurs to navigate the initial years of operation.

2. Expanding Access to Funding

• Creating Supportive Loan Programs: Governments and financial institutions can establish low-interest loan programs tailored for startups and small businesses. For example, microloans, angel investments, and small business grants could help bridge the funding gap.
• Encouraging Venture Capital Investment: Initiatives to incentivize venture capital firms, such as tax deductions on startup investments, can increase access to funding for new businesses.

3. Fostering a Supportive Ecosystem

• Mentorship and Business Support Programs: It can be invaluable to set up programs where experienced entrepreneurs mentor new business owners. These programs can guide critical aspects like managing finances, marketing, and navigating regulatory landscapes.
• Incubators and Co-working Spaces: Providing shared spaces for startups, including incubators and co-working spaces, can reduce overhead costs and foster collaboration among entrepreneurs, increasing their chances of success.

4. Encouraging Consumer Demand

• Supporting Local Businesses: Encouraging communities to support local businesses can help boost demand for new enterprises. Governments can run campaigns to promote local consumption, benefiting small businesses.
• Targeted Marketing Support: Providing resources or subsidies for marketing efforts can help startups reach their target audiences more effectively, promoting growth even in a cautious consumer environment.

The Road Ahead

While the decline in new company formation is concerning, it’s also a call to action. Policymakers, financial institutions, and the broader business ecosystem must work together to create a conducive environment that encourages entrepreneurial endeavors. By addressing the 

economic and regulatory challenges, it is possible to reverse this trend and restore the vibrancy of the business landscape.

The current downturn in new company formations is a complex issue rooted in economic uncertainties, regulatory hurdles, and cautious consumer behavior. Yet, with targeted interventions and support mechanisms, there is potential to reignite the entrepreneurial spirit and foster growth.

Reversing the business blues requires a collective effort to lower barriers, facilitate funding, and boost demand. In doing so, economies can unlock the benefits of a thriving startup ecosystem and ensure continued progress in innovation, job creation, and economic resilience.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

FAQ

Silver prices have recently soared in domestic and international markets, fueled by strong festive season demand and notable global factors.

Domestically, silver breached the ₹1 lakh per kilogram mark, while internationally, prices reached a 12-year high of over $34 per troy ounce. Analysts expect this upward trend to persist as silver prices often correlate with gold, which has also been on an upward trajectory. Forecasts suggest that silver could reach its all-time high of $50, last seen in April 2011, with an end-of-year target of around $40 per ounce. Source: Mint

Silver Price Historical Trend in India

Silver Outpaces Gold in 2024

Silver’s performance this year has outpaced gold, reducing the traditional gold-to-silver price ratio. Silver has surged around 42% year-to-date, compared to gold’s 32% rise. In comparison, stock market returns have been relatively modest, especially with recent market corrections.

With silver gaining approximately $10 per ounce since January, its appeal as an investment has risen, particularly given the safe-haven status that silver shares with gold. Source: Mint

Change in Gold and Silver Rates in the Last 10 Years

Year	Gold-Rs/10 Gram	Silver Rates in Rs/Kg
29-10-24	80450	99000
31-03-23	51484	66990
31-03-22	65330	76000
31-03-21	48720	65400
31-03-20	48651	40500
31-03-19	35220	40600
31-03-18	31438	41400
31-03-17	29667	37825
31-03-16	28340	36990
31-03-15	26245	37825

4 Key Factors Fueling Silver’s Price Rise

Several global factors are driving Silver’s recent rally. Here are some of the primary influences on silver prices:

U.S. Federal Reserve’s Interest Rate Cuts

Interest rates set by the U.S. Federal Reserve directly affect bullion prices because of their inverse relationship. When rates are lower, metals like gold and silver become more attractive as they help protect against inflation and economic uncertainty.

The Federal Open Market Committee (FOMC) recently lowered interest rates by 50 basis points in September—the first cut in four years—and hinted at possible further reductions through 2025. Lower rates generally lead to more investment in precious metals, increasing the demand for silver as an alternative asset.

China’s Economic Stimulus

China’s economic policies also profoundly influence global commodity markets, including silver. China recently announced a series of stimulus measures to spur growth as the world’s second-largest economy.

Analysts expect additional stimulus actions, given that current measures may not be sufficient to reach the projected 4.8% growth rate this year. Since China is a primary silver importer, any economic turnaround will likely boost silver demand, especially for industrial purposes. This trend mirrors the rise in silver prices in 2011, supported by China’s growth.

Supply Shortfalls: A Key Market Driver

Despite abundant global reserves, silver supply has not kept up with demand over the last three years. According to the Silver Institute’s 2024 World Silver Survey, the global market recorded a supply deficit of 184.3 million ounces in 2023, expected to widen to 215 million ounces this year. The primary reasons for this shortfall include:

• Industrial Demand: There is a high demand for industrial silver applications.
• Reduced Mine Output: Labor strikes, lower ore grades, and mine closures in major silver-producing countries like Mexico, Argentina, Australia, and Russia have impacted production.

With supply failing to meet demand, the pressure on silver prices remains high, especially as industrial and investment demands surge.

Rising Industrial Demand: Driving Silver’s Value

Silver’s applications in industry are a significant factor in the rising metal price. Here are some key areas where silver demand has been growing:

• Photovoltaic Sector: Silver is crucial for solar energy technology, especially photovoltaic cells. In 2024, demand from the photovoltaic sector alone is projected at 232 million ounces, representing a significant portion of industrial demand and outpacing demand for silver jewelry.
• Electronics and Electrical Manufacturing: Silver is widely used in electronic devices due to its excellent conductivity. Nearly every electronic device, from mobile phones to computers, contains silver. For 2024, annual demand in this sector is estimated at 485.6 million ounces. Additionally, silver is used in specific military applications, including missile manufacturing, which adds to the market amid ongoing global conflicts.

Industrial demand for silver rose by 11% in 2023 and is projected to increase by another 9% in 2024, reflecting a consistent trend despite economic hurdles. Although there are substantial global silver reserves, a supply shortfall has continued due to decreased mine production and heightened industrial demand.  Source: Mint

India’s Role in Silver Demand

Though a relatively small producer of silver, India is one of its largest consumers, importing substantial quantities of the metal for various uses. India’s demand is primarily driven by:

• Jewelry and Silverware Fabrication: In 2023, India’s demand for silver in jewelry fabrication was about 83.7 million ounces, nearly 41% of global demand in this sector. While this is a decline from 2022 levels due to a depreciating rupee and higher import duties, the country’s demand remains considerable.
• Physical Investment: India’s physical investment demand for silver, while smaller than that of the U.S., is substantial. In 2023, it was recorded at 49.3 million ounces, about 20% of the global total, despite falling from the previous year’s levels.

India’s silver demand influences the global supply shortage and can impact price levels, particularly if demand trends shift upward. Source: Mint

Conclusion

In summary, silver’s price outlook remains bullish. It has the potential to hit new highs, supported by robust industrial demand, safe-haven appeal, and constrained supply. With key global economic and geopolitical factors playing out, silver’s performance in 2024 is set to continue catching investors’ attention.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

FAQs

The recent Indo-China border pact between India and China marks a historic turning point in their strained bilateral relationship. Tensions over disputed territories have shadowed economic cooperation and investment flows for years. However, this landmark agreement offers a glimmer of hope for a new era of collaboration.

While the pact signals a positive development, it’s essential to acknowledge that the road ahead will likely be complex. Several factors, including geopolitical considerations, economic conditions, and regulatory hurdles, will continue to shape the trajectory of investments between the two countries.

The global geopolitical context, including the ongoing Russia-Ukraine conflict and the broader competition between the United States and China, may also indirectly affect bilateral investments.

Indo-China Pact –A Historic Breakthrough

The announcement of the border pact came as a significant surprise, given the tense relations between the two countries following the 2020 border clash. This breakthrough has opened the door for improved political and economic ties, which could have far-reaching investment implications.

Addressing Investor Concerns

One of the major concerns that has hindered investments between India and China has been the government’s stringent vetting process for companies from neighboring countries. The introduction of Press Note 3 in 2020 effectively restricted investments from Chinese firms, leading to a significant decline in bilateral flows.

While the Indo-China border pact may alleviate some of these concerns, it’s important to note that India will continue to maintain investment curbs on bordering nations. The government will focus on the place of origin of investments rather than the identity of the investors. This suggests that scrutiny will remain in place to safeguard national interests.

The Growing Economic Ties

Despite the political tensions that have characterized the India-China relationship in recent years, economic ties between the two countries have strengthened. This is evident in the steady growth of bilateral trade.

In FY24, India-China trade reached a new milestone, surpassing $118.4 billion. Notably, China overtook the United States as India’s largest trading partner during this period. This signifies a significant shift in India’s trade landscape and underscores the growing economic interdependence between the two nations.

While Chinese investments in India have been relatively modest compared to trade flows, China’s substantial exports to India highlight the complementary nature of their economies. India’s demand for Chinese goods, ranging from electronics and machinery to raw materials, has been a major driver of bilateral trade.

The Role of FDI

The Indian government has increasingly recognized the importance of foreign direct investment (FDI) as a catalyst for economic growth and development. FDI brings in capital, technology, and expertise, which can contribute to job creation, industrial development, and technological advancement.

While FDI from China has not been a significant source of inflows to India, the recent Economic Survey has advocated for a more open and welcoming approach towards such investments. The argument is that attracting Chinese FDI can be advantageous for several reasons:

• Technology Transfer: Chinese companies often possess advanced technologies and manufacturing capabilities that can benefit India’s industrial development.
• Job Creation: FDI can lead to the creation of new jobs and boost employment opportunities.
• Domestic Manufacturing: By attracting Chinese FDI, India can encourage the domestic manufacturing of goods previously imported from China. This can reduce import dependency, improve trade balances, and promote self-sufficiency.
• Global Value Chains: Participating in global value chains through FDI can help Indian companies enhance their competitiveness and access new markets.

While the Economic Survey has made a strong case for attracting Chinese FDI, it’s important to note that the government will continue to exercise due diligence to safeguard national interests. Any FDI proposal from China will be carefully evaluated to ensure that it aligns with India’s economic and strategic objectives. Source: Livemint

Challenges and Opportunities of the Border Pact

Despite the positive developments, several challenges remain that could impact the flow of investments between India and China:

• Geopolitical Factors: The ongoing geopolitical tensions between the two countries, including border disputes and technology rivalry issues, could continue to influence investment decisions.
• Regulatory Hurdles: Even with the relaxation of some restrictions, navigating the regulatory landscape in India can be complex for foreign investors.
• Economic Conditions: The economic conditions in both countries, including growth rates, interest rates, and exchange rates, will play a crucial role in determining the attractiveness of investments.

The Way Forward

To fully realize the potential for increased investments between India and China, addressing these challenges and creating a conducive environment for businesses will be essential. This includes:

• Further Policy Reforms: The Indian government could consider further easing restrictions on FDI from China and other neighboring countries.
• Enhanced Dialogue: Regular dialogue and cooperation between the two countries can help build trust and confidence, essential for fostering long-term economic partnerships.
• Focus on Mutual Benefits: Investments should be driven by a focus on mutual benefits and the creation of shared value.

Conclusion

The border pact between India and China marks a significant step towards improving bilateral relations. While challenges can be overcome, the potential for increased investments and economic cooperation is substantial. By addressing the concerns and creating a favorable environment, the two countries can unlock the full potential of their partnership and contribute to the global economy.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

India’s real estate sector, particularly in metropolitan regions, has seen significant price hikes in recent years. Average prices for new launches in the top 10 cities surged by 88% over the last five years, as highlighted in a recent report by PropEquity, a real estate data analytics firm.

In particular, two regions in Delhi-NCR have recorded a remarkable 145% surge in housing prices during this period. This sharp growth prompts crucial discussions about the future of real estate in other cities and its broader impact on homebuyers, investors, and the real estate sector.

Source: Economic Times

According to recent data from Knight Frank, 173,241 residential units were sold across eight key markets in India during the first half of 2024. This reflects a 10.6% year-on-year increase in sales, achieving the highest half-yearly figures in 11 years.

According to the data based on PropEquity, from 2019 to 2024, approximately 15,000 projects, including apartments, floors, and villas, were launched in India’s top 10 cities. These cities include Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, Thane, Navi Mumbai, Pune, Noida, and Gurugram.

Housing price rise of new launch projects across top 10 Indian cities

Cities	2019	2024	Overall	Y-o-Y
Gurugram	Rs.7500	Rs.19,500	160%	32%
Noida	Rs.6500	Rs.16,000	146%	29%
Bengaluru	Rs.5051	Rs.10,020	98%	20%
Hyderabad	Rs.4686	Rs.8,500	81%	16%
Chennai	Rs.4451	Rs.8,023	80%	16%
Pune	Rs.7300	Rs.12,600	73%	15%
Navi Mumbai	Rs.8500	Rs.14,400	69%	14%
Kolkata	Rs.4457	Rs.7,500	68%	14%
Thane	Rs.7200	Rs.11,950	66%	13%
Mumbai	Rs,25,820	Rs.35,500	37%	7%
		Average	88%	18%

Source: Economic Times

Housing Price Surge in Delhi-NCR

In the past five years, two key locations within the Delhi-NCR region, namely Greater Noida and Noida Extension, have experienced unprecedented increases in property prices. This price rise is primarily attributed to several factors, including infrastructure development, improved connectivity, and rising demand for residential spaces. As per reports, the cost of new housing projects in these areas has surged by more than 145%, reflecting the growing attractiveness of these areas for buyers and developers.

Key Highlights of the Report

Gurugram’s Major Price Surge

• Gurugram saw the highest price increase for newly-launched housing, rising from ₹7,500 per square foot in 2019 to ₹19,500 per square foot in 2024.
• This marks a significant 160% increase over five years.

Noida’s Rapid Growth

• Housing prices in Noida surged from ₹6,500 per square foot in 2019 to ₹16,000 per square foot in 2024.
• This represents a 146% rise in five years.

Bengaluru’s Notable Price Increase

• Bengaluru’s housing prices increased from ₹5,051 per square foot in 2019 to ₹10,020 per square foot in 2024.
• This indicates a 98% rise over the five years.

Hyderabad’s Steady Rise

• Hyderabad’s prices climbed from ₹4,686 per square foot in 2019 to ₹8,500 per square foot in 2024.
• This reflects an 81% growth in five years.

Chennai’s Significant Growth

• Housing prices in Chennai jumped from ₹4,451 per square foot in 2019 to ₹8,023 per square foot in 2024.
• This marks an 80% rise during the same period.

Mumbai’s Moderate Price Increase

• Mumbai experienced a more modest 37% price rise, moving from ₹25,820 per square foot in 2019 to ₹35,500 per square foot in 2024.

Factors Influencing Real Estate Prices Across Cities

Various factors shape the price trends in different cities, some common across regions and others specific to the local market dynamics.

1. Lockdown Savings: Increased savings during lockdowns and minimal income disruptions among middle- and high-income groups have fueled demand in India’s residential real estate market.
2. Economic Growth: A robust economic growth outlook has further boosted interest in residential properties. 
3. Infrastructure Development: Infrastructure development, including new roads, metro lines, and airports, plays a significant role in boosting property prices. Areas with better connectivity and amenities attract more buyers and investors.
4. Urban Expansion: As Delhi’s central regions become overcrowded and expensive, many homebuyers and investors have shifted their focus to the peripheral areas of NCR, pushing up property prices.
5. Demand-Supply Gap: With increased demand for residential properties and limited land availability, prices have been driven upward due to the mismatch between supply and demand.
6. NRI Interest: Increased investment from non-resident Indians (NRIs) has contributed to demand.
7. Stock Market Gains: Rising stock market performance has created wealth, further fueling property investments.
8. HNIs and UHNIs Engagement: High-net-worth individuals (HNIs) and ultra-high-net-worth individuals (UHNIs) actively seek real estate opportunities.
9. Real Estate Regulations: Government regulations, such as RERA and the implementation of the Goods and Services Tax (GST), have significantly impacted the real estate market. These regulations have increased transparency and improved buyer confidence, increasing demand and rising prices.

Average price per square foot of new housing project in Mumbai, Noida, Gurugram in 2024

City	Average Price/Sq.ft
Mumbai	Rs. 35,500
Gurugram	Rs. 19,500
Noida	Rs. 16,000

Mumbai remains the priciest city in terms of per-square-foot pricing. Notably, in 2019, Mumbai was the only city with average prices for new launch projects surpassing ₹10,000 per square foot. By 2024, this threshold had been crossed by all but three cities: Hyderabad, Chennai, and Kolkata.

Source: Economic Times

Impact of Housing Price Surge on the Real Estate Sector

1. Homebuyers’ Dilemma

Rising property prices have made it increasingly challenging for potential homebuyers to find affordable housing. While the increased demand in areas like Greater Noida and Noida Extension reflects the popularity of these regions, it also limits options for middle-income groups. Many buyers are now forced to either increase their budget or look for properties in more remote locations.

2. Real Estate Investment

On the other hand, the price rise has been beneficial for investors. Those who invested in these areas five years ago have seen substantial returns, with property values appreciating significantly. The steady price increase will likely attract more investors to these regions as they seek to capitalize on future growth.

3. Developer Incentives

The booming real estate prices have encouraged developers to launch new Greater Noida and Noida Extension projects. With the possibility of higher profits, developers are focusing on delivering quality projects with modern amenities, catering to the growing demand for luxury and premium housing in these areas.

5. Shift Towards Suburban Areas

As property prices in metropolitan cities continue to rise, many buyers opt for homes in suburban areas with relatively lower prices. This trend has been particularly evident in cities like Delhi-NCR, Mumbai, and Bengaluru, where buyers move to peripheral areas for more affordable options.

6. Luxury Housing Segment Growth

While the demand for affordable housing has increased, there has also been a growing demand for luxury and premium housing in metropolitan cities. Developers are now focusing on high-end projects catering to affluent buyers willing to pay a premium for better amenities and locations.

7. Impact on the Rental Market

The surge in property prices has also affected the rental market, with rental rates rising in tandem with property values. In cities like Mumbai and Bengaluru, rental rates have increased significantly over the past few years, making it more expensive for tenants to find affordable accommodation.

What’s Next For The Realty Sector?

The sharp rise in housing prices in Delhi-NCR and other cities reflects the evolving dynamics in India’s real estate sector. As infrastructure development and urban expansion continue, property prices may rise further in the coming years. However, the market is also likely to see increased demand for affordable housing, with more buyers looking for homes that fit their budget.

The real estate market offers significant opportunities for investors, especially in regions that are still undergoing development. However, homebuyers face the challenge of finding affordable housing options as prices continue to rise.

As the real estate market continues to evolve, it will be important for buyers and investors to monitor local trends, government policies, and infrastructure developments that can influence property prices in their respective cities.

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

FAQ

What a weekend for global markets! With so many factors impacting stock indices worldwide, you might wonder what exactly changed and how it will affect the market this week. From China’s deflationary pressures to the US expanding sanctions on Iran, here’s a breakdown of the 12 most critical market drivers that will shape investor sentiment as trading begins.

1. China’s Debt-Driven Stimulus

China pledged to increase debt issuance to revive its slowing economy significantly. The government plans to help local authorities manage their debt, offer subsidies to low-income households, and support the property market. However, despite these pledges, Beijing’s lack of concrete measures over the weekend left analysts underwhelmed. Investors had hoped for more aggressive steps to stimulate growth. This uncertainty will continue to weigh on market sentiment.

2. China’s Inflation Slows

China’s inflation data was disappointing, with the consumer price index (CPI) rising just 0.4% in September, below expectations. Meanwhile, producer prices fell by 2.8% year-over-year, the steepest decline in six months. This deepening deflationary trend highlights the challenges facing China’s economy, which could affect its trading partners and global commodity demand, including oil and metals.

3. Asian Markets Trade Higher

Asian markets began the week mainly in the green. South Korea’s Kospi rose 0.63%, while the Kosdaq index slipped slightly by 0.43%. Japan’s markets were closed due to a holiday. Meanwhile, Hong Kong’s Hang Seng index futures pointed to a higher opening.

These movements reflect an optimistic tone from the region ahead of critical economic data releases that will come later in the week. This regional momentum is expected to have a positive ripple effect on global markets, including India.

4. Gift Nifty Signals a Positive Start

The Gift Nifty traded around 25,100 in the pre-market session, marking a premium of nearly 50 points from the Nifty futures’ previous close. This indicates that the Indian market might open with a positive bias on Monday. This strength from global cues will offer a cushion despite domestic challenges.

5. Wall Street’s Record Highs

The U.S. stock market ended Friday on a high note, with the Dow Jones Industrial Average jumping 409.74 points (0.97%) to 42,863.86 and the S&P 500 gaining 34.98 points (0.61%) to close at 5,815.03. The Nasdaq Composite also finished up by 0.33%.

Notable stock movers included a sharp 8.78% decline in Tesla, while banks like JPMorgan Chase surged 4.4%, Wells Fargo climbed 5.6%, and BlackRock rose 3.6%. Wall Street’s gains may help set a positive tone for global markets at the start of the week, particularly as investors digest economic data and corporate earnings.

6. US Producer Price Index Holds Steady

The U.S. producer price index (PPI) remained unchanged in September, signaling a stable inflation outlook. This followed a 0.2% increase in August. Year-over-year, the PPI rose 1.8% in September, down slightly from 1.9% in August.

Although economists expected a minor increase of 0.1% for September, the unchanged PPI suggests that inflationary pressures might not be as significant as earlier feared, potentially keeping the Federal Reserve from tightening monetary policy more aggressively.

7. US Consumer Sentiment Weakens

Consumer sentiment in the U.S. slipped in October, with the University of Michigan’s index falling to 68.9 from September’s 70.1. This decline reflects ongoing concerns about high prices and the overall economic outlook. While this dip in sentiment might not immediately affect markets, it could signal potential headwinds for consumer spending.

8. US Expands Sanctions on Iran

On Friday, the U.S. expanded sanctions against Iran, targeting its “ghost fleet” that moves illicit oil. This move follows Iran’s Oct. 1 attack on Israel. The oil and gas rig count in the U.S. rose by one last week, bringing the total to 586. This marks the first increase in four weeks. The sanctions and a slight uptick in rig activity could affect global energy markets, depending on how tensions escalate in the Middle East.

9. Hurricane Milton’s Mixed Impact

Hurricane Milton temporarily affected U.S. gasoline demand, as evacuations boosted short-term consumption. However, weak demand dominated the fundamentals. BP reported a $600 million drop in Q3 profits due to weak refining margins. This suggests that, despite the hurricane’s short-term impact, the broader trend in oil consumption remains sluggish, especially amid global uncertainties.

10. Oil Prices Slip

Oil prices fell in response to weak Chinese inflation data. Brent crude futures declined by 1.44% to $77.90 per barrel, while U.S. West Texas Intermediate crude dropped 1.43% to $74.48 per barrel. China’s slowing demand for oil continues to weigh on prices, adding to broader concerns about global economic growth.

11. Gold Prices Decline

Gold prices dipped as the U.S. dollar strengthened. Spot gold fell by 0.4% to $2,646.75 per ounce, while U.S. gold futures dropped 0.5% to $2,663.90. This decline comes after gold prices rose 1% in the previous session. A strong dollar typically dampens demand for gold, which is priced in dollars, making it more expensive for foreign investors.

12. FII Selling Continues

Foreign institutional investors (FIIs) continued to sell Indian shares, net selling ₹4,162.66 crore worth of equities on Friday. In contrast, domestic institutional investors (DIIs) net purchased shares worth ₹3,730.87 crore. In October, FIIs sold a total of ₹58,394.56 crore worth of Indian equities, reflecting their cautious stance amid global uncertainties.

Source: Livemint

Conclusion

Investors should brace for volatility driven by global and domestic factors as the market gears up for another week. From China’s deflation to U.S. sanctions on Iran and FII sell-offs, these 12 key market drivers will likely set the tone for trading in the coming days. Monitor the macroeconomic data and global cues to better navigate these unpredictable markets.

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.