Finnovate Weekly Capsule (Aug 18–Aug 22, 2025)

Welcome to this week’s capsule. A lot unfolded across policy circles, regulatory boards, and global alliances. Here’s your snapshot of the biggest financial updates, decoded for impact.

1. RBI MPC minutes indicate that the rate pause could change in October 2025

Impact Analysis

• Most members agreed that the rate pause was justified by the RBI to allow full transmission of the 100 bps cut since Feb-25
• While low inflation could be the trigger for another rate cut, MPC members have cautioned about elevated core inflation

2. India core sector growth for July 2025 comes in at 2.03% yoy

Impact Analysis

• While this is lower than the June 2025 core sector growth, it must be remembered that June data was upgraded by 40 bps
• The big positive thrust to core sector came from cement and steel, while coal output applied the maximum pressure

3. FOMC minutes presented on Thursday gave indications of a divided house

Impact Analysis

• The majority of FOMC members still believe that the upside risk to inflation is much higher as an outcome of tariffs
• However, there is also a growing feeling that the tariffs could start to impact jobs and consumer spending in a big way

4. India plans to expand trade with Russia to $100 billion by the year 2030

Impact Analysis

• Indian trade with Russia is currently over $70 billion, but it is predominantly crude oil imports from Russia
• India is looking to expand its presence in the Russian market by exporting drugs, pharmaceuticals, chemicals, and textiles

5. RBI may reduce risk weights for auto loans to give a boost to auto sector

Impact Analysis

• Currently, auto loans attract 100% risk weights, while home loans have a risk weight of just 35-50%, with both secured
• A reduction in the risk weights would enable the banks to lend for auto purchases at lower costs, and in turn, boost sales

6. SEBI chair hints at long dated options to reduce the short-term options volatility

Impact Analysis

• The idea is to get more serious long-term players to hedge their risk in the options market, through long-dated options
• However, longer-dated options did not take off in the past due to the high risks involved and absence of counterparties

7. SEBI looks to gradually eliminate the grey market, with a pre-IPO platform

Impact Analysis

• The pre-IPO platform will offer a mechanism for investors to trade IPOs before they get listed, without going for GMP
• The recent IPO of HDB Financial Services exposed the downside risks of the GMP, after pricing was far lower

8. Government passes bill in Lok Sabha to ban money-based gaming platforms

Impact Analysis

• The argument of the government is that such games are causing big losses and social unrest with no value addition
• However, the gaming industry is of the view that banning is not the answer, considering the taxes that it contributes

9. Powell speech at Jackson Hole to be watched for signals on rate cuts

Impact Analysis

• Powell is expected to deliver his speech at Jackson Hole, Wyoming on Friday, which will be closely watched
• Powell has been a strong believer in the inflation impact of tariffs and has been steadfastly against rate cuts for now

10. Westbridge Capital may invest ₹450 crore for a stake in Edelweiss AMC

Impact Analysis

• Indian mutual funds business has not been the greatest for global players, with most of them exiting in the past
• However, the new breed of global investors are not typical mutual funds, but coming in more as strategic investors

11. RBI confirms that inflation tolerance band not to be changed after recent fall

Impact Analysis

• The RBI currently targets inflation at 4% with a 2% range, so ideally, inflation can be between 2% and 6%
• Despite recent inflation readings below 2%, RBI underlined the importance of long-term consistency in inflation policy

12. GTRI warns India about its massive $100 billion trade deficit with China

Impact Analysis

• This concern comes back as China relaxes its export ban on rare earths, tunnel boring machines, and fertilizers to India
• India runs an inordinately large trade deficit with China on its massive imports of electronic parts, machinery, chemicals etc

13. BPCL and IOCL will continue to procure crude oil from Russia through FY26

Impact Analysis

• The OMCs rely heavily on Russian crude to keep their cost of crude low and boost their marketing margins
• Despite threats of sanctions by the US, India has underlined that energy security was a primary commitment for India

14. The GST reforms are likely to cause revenue loss of ₹60,000 crore a year

Impact Analysis

• To curb inflation and boost consumer spending, India has cut GST rates in a big way across the board for most products
• Economists believe that the loss of tax revenue would be offset by the higher revenues from the economic boost

15. Government likely to consider AGR relief for Vodafone as a rescue measure

Impact Analysis

• Currently, Vodafone Idea has AGR dues of ₹83,400 crore, and there is no way Vodafone Idea can pay that amount
• It remains to be seen if the government eventually makes Vodafone Idea a fully owned government company

16. Wipro shells out $375 million to buy Harman, the DTS unit of Samsung

Impact Analysis

• This deal will help Wipro accelerate its engineering R&D services as Wipro will absorb over 5,600 DTS employees
• Harman combines engineering with AI-native platforms and can offer a big boost to Digital Transformation at Wipro

17. Bajaj electrical vehicles (EV) volumes feel the heat of rare earth magnets

Impact Analysis

• Due to the ban on export of rare earth magnets by China, Bajaj has fallen from second to fifth place in E2V rankings
• The market share of its leading EV brand (Chetak) in the E2V space has fallen from a high of 19% to just 12% in August

18. Hindalco plans to invest a sum of $10 billion globally by the year 2030

Impact Analysis

• These investments are likely to be largely towards expanding their aluminium and copper manufacturing operations
• In FY25, Hindalco had already initiated projects worth ₹18,000 crore, which is Hindalco’s highest annual capex in a decade

19. Vedanta demerger runs into trouble with SEBI and Petroleum Ministry

Impact Analysis

• This refers to the proposal by Vedanta to split its business into five distinct verticals and list each of them on the bourses
• The Petroleum Ministry and SEBI have now raised concerns about the guarantees provided by Vedanta to government

20. As the US gets aggressive on India, her China tilt appears to be paying off

Impact Analysis

• Chinese foreign minister Wang Yi assured support in exports of rare earth magnets, tunnel boring machines, and fertilizers
• As a gesture, PM Modi will also attend the SCO Summit in Beijing and support China’s leadership of the SCO

21. Centre urges Indian companies to expand and create Indian MNCs

Impact Analysis

• Government wants Indian companies to think beyond just getting global orders, and actually create global presence
• The External Affairs Ministry has also created permanent desks at all major embassies to support this endeavour

Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial advice. Always consult a qualified financial advisor before making investment decisions.