Finnovate Weekly Capsule (Dec 29, 2025 – Jan 02, 2026)

Welcome to this week’s edition of Finnovate’s Weekly Capsule. Below are the key macroeconomic, policy, market and corporate developments from Dec 29, 2025 to Jan 02, 2026, along with their impact analysis to help you understand how these trends could shape markets and investment decisions going into the new year.

1. India’s fiscal deficit hits 62.3% of FY26 target as of Nov-25

Impact Analysis

• Fiscal deficit rose by ₹1.52 trillion in November due to weak revenue collections.
• Net tax revenues have reached only 49% of the FY26 target so far, even before accounting for pending refunds.

2. RBI Financial Stability Report warns of higher NBFC NPAs in FY27

Impact Analysis

• Stress tests indicate NBFC gross NPAs could rise from 2.3% to 2.9% by Sep-26.
• CRAR is expected to fall by ~110 bps to 21.7%, still comfortably above regulatory thresholds.

3. Life insurance penetration falls to 2.7% for the third straight year

Impact Analysis

• Penetration has declined sharply from the 3.2% peak in 2022.
• New tax regime and removal of Section 80C incentives reduced demand for traditional life insurance products.

4. Economists flag fiscal risks ahead of Union Budget

Impact Analysis

• While the 4.4% fiscal deficit target is ambitious, falling revenues make it difficult to achieve.
• Calls to cut deficit to 3.0% may clash with the government’s growth-focused spending strategy.

5. Small-cap funds deliver negative returns in 2025 amid volatility

Impact Analysis

• This contrasts with Nifty’s ~10.5% returns and mid-cap index gains of ~5.3%.
• Heightened volatility and stock-specific drawdowns hurt small-cap mutual fund performance.

6. Defence allocation likely to rise in Union Budget 2026

Impact Analysis

• While FY26 defence capex stands at ₹1.80 trillion, DAC approvals already total ₹3.17 trillion.
• Next year’s defence outlay could rise 10–15%, led by capital expenditure.

7. IIP growth rebounds to 6.68% in Nov-25

Impact Analysis

• Sharp recovery from the -0.06% contraction in October.
• Manufacturing output surged 8.0% as domestic demand improved and export disruptions eased.

8. UBS raises 2026 gold target to $5,000/oz

Impact Analysis

• With gold already above $4,350/oz, UBS sees another ~15% upside in 2026.
• Central bank buying and expected Fed rate cuts reduce holding costs for gold.

9. Banks tilt toward unsecured lending to boost margins

Impact Analysis

• Average lending rate on fresh loans rose 32 bps to 8.71% between Sep and Nov 2025.
• Wide rate gap of 300–400 bps between secured and unsecured loans supports profitability but raises credit risk.

10. GST cuts lift passenger vehicle sales by 26% in Dec-25

Impact Analysis

• Wholesale PV volumes hit a record 4.55 million units in 2025.
• SUVs dominated, accounting for nearly 56% of total PV sales value.

11. PFRDA allows banks to sponsor and manage NPS funds

Impact Analysis

• Move deepens competition and improves institutional participation in the NPS ecosystem.
• Banks gain a new revenue stream beyond mere distribution.

12. Sapphire Foods and Devyani Industries merge via stock swap

Impact Analysis

• Devyani will issue 177 shares for every 100 shares of Sapphire Foods.
• Merger consolidates Indian franchises of KFC, Pizza Hut and Taco Bell under one platform.

13. Manufacturing PMI slips to a 2-year low of 55.0 in Dec-25

Impact Analysis

• Down from 56.6 in November, mainly due to export headwinds from US tariffs.
• Despite slower output, PMI remains in expansion territory aided by low inflation.

14. ITC stock falls 15% after 40% sin tax on cigarettes

Impact Analysis

• Brokerages downgraded ITC citing margin pressure and illegal trade risk.
• Higher sin tax could revive illicit cigarette market, impacting volumes.

15. IPO pipeline for 2026 seen at ₹2.50 trillion

Impact Analysis

• Significantly higher than ₹1.76 trillion raised in 2025.
• Large issues expected from Clean Max, Fractal Analytics, Hero Fincorp, OYO and Prestige Hospitality.

16. Mumbai property registrations hit 14-year high in 2025

Impact Analysis

• Registrations reached 1,50,254, driven by premium properties.
• Homes priced above ₹5 crore formed 7% of registrations, showing strong high-end demand.

17. Health insurance accounts for 41% of non-life premiums in FY25

Impact Analysis

• Non-life premiums touched ₹3.07 trillion, a new record.
• Health insurance outpaced life insurance in both growth and penetration.

18. Hospital sector to grow at over 12% CAGR for next five years

Impact Analysis

• Growth driven by shortage of ~2 million hospital beds and rising insurance coverage.
• India has only 16 beds per 10,000 people versus WHO norm of 30.

19. Vodafone Idea to recover ₹5,836 crore from Vodafone UK

Impact Analysis

• Includes ₹2,307 crore in cash and ~328 crore shares from Vodafone promoters.
• Receivables recovery strengthens liquidity amid ongoing turnaround efforts.

20. Kalpataru Projects wins ₹719 crore Thane Metro EPC order

Impact Analysis

• Boosts presence in fast-growing urban infrastructure segment.
• Order strengthens execution visibility in power and civil EPC businesses.

21. Ecommerce saw strong growth in 2025, but losses persist

Impact Analysis

• Despite higher cart sizes and over 12 million users, quick commerce remains loss-making.
• Lifestyle, electronics and staples dominate online consumption baskets.

Disclaimer: This article is for informational purposes only and does not constitute financial advice or product recommendations. Please consult a registered advisor before making investment decisions.