🔍️ Zerodha’s market outlook

Good morning. Delhi currently resembles a scene straight out of Dune 😢 

More on that in the bite-sized summary section - but also if this impacts you - hope you are taking care of yourselves 🫶 

- Ruchirr Sharma & Shatakshi Sharmaa  

TABLE OF CONTENTS

• 🔍️ Zerodha’s market outlook

• 🧑‍⚕️ India eyes major insurance reform

• 🗞️ Bite-sized summaries

  • 🚬 Gurgaon pollution worsens

  • 🤝 How big was the Vistara merger with Air India

  • ✈️ Delayed flights

• 🧑‍🍳 What else is cookin’?

• 🍿 Entertainment, Entertainment, Entertainment

MARKETS

🇮🇳 India

• The Indian share market closed mixed. This declines were attributed to weak global cues and profit booking by investors. Major sectors, including banking and IT, faced losses, contributing to the overall bearish sentiment. Market analysts suggest caution as volatility is expected to continue in the coming sessions.

🌍️ International

• U.S. markets showed mixed results on Monday. Tesla surged 5.6% amid potential regulatory easing from Trump's administration. Nvidia's shares dropped 1.3% ahead of its earnings report. CVS Health rose 5.4% due to new board appointments, while broader market sentiment remained cautious ahead of key retail earnings this week.

MACROECONOMICS

🔍️ Zerodha’s market outlook

After a four-year stock market surge driven by record retail investor participation, Nithin Kamath, CEO of Zerodha, predicts a plateau in growth.

This slowdown, coupled with recent regulatory changes in futures and options trading, could reduce Zerodha’s order volumes by 30% and its futures and options trades by 60%.

Here’s what he’s saying:

• Kamath emphasizes that Zerodha’s performance is closely tied to market trends, and the cooling of market euphoria presents challenges for the brokerage giant.

• Despite increased competition from platforms like Groww and Angel One, Zerodha maintains its leadership in financials, reporting ₹8,370 Cr. in revenue and ₹4,700 Cr. in net profit for FY24.

• Zerodha has proactively eliminated account opening charges, boosting new accounts by 20%, with 2.5–3 lakh accounts opened monthly.

• However, Kamath acknowledges the need to ensure these accounts remain active amid potential market slowdowns.

• Kamath also sees a positive trend in the influx of IPOs, which fosters greater participation from new-generation retail traders. Indian companies raised a record ₹1.19 lakh crore through public listings in 2024, highlighting the growing vibrancy of capital markets.

To diversify, Zerodha is expanding its credit offerings. Its NBFC arm, Zerodha Capital, will introduce loans against mutual funds and shares, alongside existing loans against securities.

Currently managing ₹350 crore in assets, it disburses ₹80–90 Cr. monthly to 7,000 customers at competitive interest rates. Plans for margin trade financing are also underway, albeit limited to specific customers due to high leverage risks.

Overall: In addition to credit, Zerodha operates Rainmatter Capital, supporting over 90 startups, and owns a majority stake in Zerodha Fund House, its asset management business. Kamath views the growing competition as beneficial for the ecosystem, fostering long-term growth in India’s capital markets.

Despite challenges, Zerodha is leveraging innovation and diversification to navigate an evolving market landscape.

Read more: Economic Times

INSURANCE

🧑‍⚕️ India eyes major insurance reform

India is preparing for a transformative shift in its insurance sector with the proposed introduction of 100% foreign direct investment (FDI). This landmark reform, part of the forthcoming Insurance Amendment Bill, aims to attract global insurers, enhance market competition, and expand insurance coverage per the government’s vision of "Insurance for All by 2047."

Here’s what’s happening:

• Currently capped at 74%, the FDI ceiling in insurance has limited the independent entry of foreign players.

• Raising it to 100% will allow global firms to operate without Indian partners, fostering innovation and financial strength in a capital-intensive industry.

• This move is also expected to complement domestic giants like SBI, ICICI, and LIC, while encouraging new players to underwrite policies and boost sectoral growth.

Another key reform in the bill is allowing insurance agents to sell policies from multiple companies. This will formalize existing workaround practices, streamline operations, and provide consumers with broader choices.

The Indian insurance market, comprising 24 life insurers, 26 general insurers, and other entities, currently has a low penetration of just 4%. The government is determined to improve this through additional measures, including composite licenses for insurers, allowing them to offer life and non-life products. Relaxed solvency norms are also on the agenda, potentially freeing capital to underwrite more policies.

Debasish Panda, Chairman of India's Insurance Regulatory and Development Authority (Irdai), emphasized the need for substantial capital infusion to achieve universal coverage by 2047. The entry of well-capitalized foreign players, he argued, would bolster domestic investment rather than crowd it out.

Overall: These reforms are expected to intensify competition, driving better products, improved services, and greater efficiency. For consumers, this means broader access to insurance and more tailored offerings. The winter session of Parliament will be crucial in determining the future of these ambitious reforms and their impact on India's evolving insurance landscape.

Read more: Economic Times

GENERAL OVERVIEW

🗞️ Bite-sized summaries

🚬 Gurgaon pollution worsens - Gurgaon has suspended physical classes for grades 1 to 5 from November 19, 2024, due to worsening air quality, with AQI levels reaching "Severe" in some areas. The Haryana government mandated online classes for all government and private schools, prioritizing students' health and safety. This move aligns with similar measures in Delhi, where most physical classes, except for grades 10 and 12, have also been discontinued under the GRAP-4 action plan for severe air pollution. Authorities aim to mitigate health risks as air quality in the National Capital Region continues to deteriorate, impacting millions of residents.

🤝 How big was the Vistara merger with Air India - The Air India-Vistara merger, completed on November 11, 2024, marks a transformative moment for Indian aviation. Singapore Airlines CEO Goh Choon Phong expressed strong support, with Singapore Airlines holding a 25.1% stake in the expanded Air India Group. The merger combines a fleet of 300 aircraft and over 30,000 employees, enhancing domestic and international operations. Tata Sons Chairman Natarajan Chandrasekaran highlighted plans to transform Air India into a world-class airline as part of the Vihaan.AI five-year strategy. The consolidation creates one full-service and one low-cost carrier, strengthening Air India's market presence and global ambitions.

✈️ Delayed flights - Poor visibility due to adverse weather disrupted operations at Delhi airport on November 18, 2024. Over 100 flights were delayed, and 15 were diverted to cities like Jaipur, Dehradun, and Lucknow. Airlines, including Air India, SpiceJet, and IndiGo, issued advisories, urging passengers to plan for delays and slow traffic. Limited availability of pilots trained for CAT III conditions, which allow operations in low visibility, contributed to the disruptions. Indira Gandhi International Airport, handling 1,400 daily flights, implemented low-visibility procedures while maintaining essential services. Passengers were advised to check with airlines for updates and prepare for extended travel times.

HEADLINES

🧑‍🍳 What else is cookin’?

What’s happening in India (and around the world 🌍️)

• Chhattisgarh to get India's third largest tiger reserve totalling four in the state.

• India's GCC ecosystem set to hit $100B by 2030.

• Amazon India to move corporate headquarters in Bengaluru amid cost-cutting exercise.

• AQI blues: What India can learn from China to curb air pollution.

CULTURE

🍿 Entertainment, Entertainment, Entertainment

• Nayanthara: Beyond The Fairy Tale releases on Netflix.

• Tiger Shroff’s Baaghi 4 first look out now: a bloody preview of what's to come.

• Mohammed Shami will represent Bengal in the upcoming Syed Mushtaq trophy.