At Arth Vidya, we believe better investing starts with understanding how businesses earn money, how sectors evolve, and how the economy is connected.

Join our free introductory session on Monday (August 3) at 5 pm to explore:

• Why information alone doesn’t create better investors

• How businesses create value and earnings

• Why financial ratios are outcomes, not starting points

• How sectors and companies are interconnected

• How to identify long-term trends and opportunities

Click here for the Google Form and join the session !!

Arth Vidya is not about stock tips. It’s about learning how to think, connect the dots, and make better investment decisions.

We look forward to having you with us.

Warm regards,

Jinay Savla
Arth Vidya | Indigenous Investors

What makes the discussion powerful is the shift from awareness to action.

Instead of forcing change, each personality is guided through a tailored intervention.

Savers are pushed to confront their deep attachment by giving money away, not for charity but for self-realisation.

Spenders aren’t restricted—instead, they are asked to match every expense with an equal investment, subtly rewiring behavior.

Avoiders are nudged gently, starting with something as simple as writing down their finances, building awareness step by step.

And for “saints”—those who detach from money with a sense of moral superiority—the path lies in seeking honest feedback from others to break their self-created narrative.

The underlying philosophy is simple yet profound: transformation doesn’t come from removing who you are, but by adding small, intentional shifts—like adding sugar to milk to change its taste.

You don’t fight your nature; you work with it.

Over time, these small interventions dissolve rigid identities and create a healthier, more flexible relationship with money—one that allows both control and freedom.

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Today’s discussion explores the “Saint” as one of four templates defining a person’s relationship with money, joining the categories of saver, spender, and avoider.

In this context, a “Saint” is not a person of genuine sacrifice but rather a common person who pretends to be above money and materialistic desires.

Defining the “Saint” Persona

A person in this category often masks a deep internal craving for money with a facade of spiritual or creative superiority.

• The Pretense: They claim to work only for “creative satisfaction” or a “bigger vision” rather than financial gain.

• Hidden Need: Despite their claims, they are often in desperate need of money. If given “satisfaction” instead of a salary, they are the first to complain.

• Arrogance and Ego: They frequently look down on others as “fools” for pursuing materialistic goals.

• Abstract Communication: They avoid practical, real-world discussions (like costs or timelines) in favor of abstract stories and “dream world” scenarios.

Life Impact and Challenges

The “Saint” template is described as the most “dangerous” and “hardest to break” because it is often reinforced over decades.

• Professional Failure: They often fail in interviews or meetings because they pretend they do not need the job or the deal, acting as if they are only there as a favor.

• Stagnation: While they may have a “vision” (e.g., a billion-dollar goal), they lack a concrete plan to achieve it, as their arrogance prevents them from performing “small tasks”.

• Impact on Family: Families of “Saints” often suffer more than those of “Avoiders” because the Saint refuses to earn money and may prevent family members from enjoying materialistic comforts.

Advice for Interaction

The discussion suggests that “Saints” are “anti-fragile”—the more you try to change or convince them, the stronger their pattern becomes.

• For Family: Family members should focus on managing their own personal finances and enjoying their own lives rather than depending on the Saint or trying to mold them.

• Identification: One can identify this pattern when a person refuses to move from the “Why” (purpose) to the “How/What” (action) of a situation.

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Avoidance is not a limitation of intelligence or ability; it is a pattern.

Today we speak about an the often-ignored “avoider” personality in our relationship with money—individuals who consistently resist engaging with financial discussions, decisions, or responsibilities.

Unlike savers or spenders, avoiders prefer to distance themselves entirely, often masking this behavior with statements like “personal finance is not my cup of tea.” However, this is less about capability and more about a deeply ingrained pattern of avoidance, often rooted in past experiences, discomfort, or even shame.

While avoiding money conversations may provide temporary emotional relief, it quietly prevents individuals from taking ownership of their financial lives.

Over time, this pattern becomes self-reinforcing. Avoiders not only miss out on opportunities to learn and grow but also shut themselves off from new financial possibilities altogether.

This avoidance impacts not just their own lives but also creates friction in relationships—especially within families—where open conversations about money become difficult or even impossible. What feels like an easy escape in the short term gradually compounds into a harder, more complicated life, as responsibilities are delayed and decisions are left unaddressed.

The path forward begins with awareness and honesty. Recognising “I am avoiding” is the most difficult yet most crucial first step. From there, change doesn’t require a dramatic overhaul but small, consistent actions—engaging in simple financial conversations, taking minor decisions, and slowly building comfort.

And like any pattern, it can be broken with conscious effort, opening the door to a more empowered and financially aware life.

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Are You Saving Money — or Missing Life?

In this conversation, we explore the psychology of a “saver” — someone wired to prioritise security, discounts, and future uncertainty over present experiences. Savers often pride themselves on discipline and control, but beneath that lies a subtle driver: fear of “what if something goes wrong.”

While saving is celebrated, the episode challenges its blind spots. When life becomes a series of calculations — chasing small discounts, optimizing every rupee — the hidden cost is time, energy, and missed experiences.

The key insight: it’s not about being a saver or spender, but becoming a meaningful one. Create a “love-to-do list” and let that guide your money decisions. Save where it matters, but spend fully on what truly enriches your life.

Because in the end, the real question isn’t how much you saved — but what you lived for.

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Most people think they have a spending problem. They don’t. What they actually have is a relationship with money—and like all relationships, it is emotional, deeply personal, and often shaped long before we become aware of it.

A spender is not just someone who spends a lot. A spender is someone who derives joy, identity, or emotional relief from spending money. When they feel low, they spend. When they seek validation, they spend. When they want to feel in control, they spend. Money stops being just a tool and starts becoming a coping mechanism. And the tricky part is that it works—but only temporarily.

This is where the illusion begins. Money can certainly buy comfort and make life easier, but it cannot create lasting happiness. What it often creates instead is a loop: spend, feel good, feel empty, and spend again. Over time, the gap between spending and real fulfilment only grows wider.

No one is born a spender. This pattern is built over time. It can come from a childhood where certain things felt out of reach, a need to prove one’s worth, constant social comparison, or even using spending as a way to deal with stress or emotional voids. In many ways, spending becomes the adult expression of unmet needs from the past.

Not all spending is harmful. The real difference lies between impulsive and meaningful spending. Impulsive spending is reactive, emotional, and often followed by regret. Meaningful spending, on the other hand, is intentional. It comes from asking a simple but powerful question: does this add value to my life? The money may be the same, but the outcome is entirely different.

On the surface, spenders often appear to be living fully. They are generous, fun to be around, and present in the moment. But behind the scenes, a different story may unfold. Savings remain low, debt quietly builds, and the future is often ignored. When your focus is entirely on the present, the future feels distant—until it suddenly isn’t.

There is also a hard truth that many spenders eventually confront: they may be buying things they don’t need, with money they don’t have, to impress people they don’t know. And somewhere deep down, they are aware of it.

This is not about judging the behaviour but understanding it. Awareness is what creates change. You don’t need to stop spending altogether—you simply need to shift from spending driven by emotion to spending driven by value.

Sometimes, all it takes is a pause. Before making a purchase, asking whether this is a need or an escape, and whether it will create lasting value or just temporary relief, can be enough to change the trajectory of your financial life.

Money is not just numbers on a spreadsheet. It is memory, emotion, and identity. Until you understand your relationship with it, no strategy will truly work. You don’t have a spending problem. You have a pattern—and patterns can be changed.

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Transcript of the Podcast!

Jinay: We are doing this after one whole week. And today we want to talk about the area of money where people feel stuck.

It’s like, you know, that rat just keep on running in that treadmill and they never get down.

I have seen a lot of these people. I think, you know, you’ve also seen.

So let’s talk about that.

Nandish: Yeah, so I have also observed the same in a lot of people and even a part of all these that you shared also resides in me. But then at least I have learned how to handle it and deactivate this part of me because it’s there in all of us.

I think everyone somehow, you know, somewhere they have these elements in them. There is always an element of insecurity, an element of not having enough, an element of, you know, gathering more, accumulating more.

I think if I look at my life in the start, I was just thinking once like, why did I get a job?

Why did I started earning?

So the answer was because everybody was doing that. I also started doing that. And because everybody was earning money, I thought it’s good, I also have to start playing the same game. You know everybody is buying cars so i also have to do the same everybody is buying now i also have to do the same so that comparison or what we see in the society what we see out in the world that actually influences us a lot but that’s not the true game that’s not the real game it’s important to earn money it’s important to save it’s important to invest it’s important to grow but that insecurity, if we don’t handle it, no matter how much money we will have, that insecurity will continue to overpower us or govern our life.

So who is on the driver’s seat?

Is it freedom or is it insecurity? And if insecurity is driving our life, then we will never be able to attain fulfillment.

Jinay: I think it’s interesting because I’ll give you a hypothetical scenario.

Two friends freshly out of college. One goes on to become billionaire. The other is stuck in the same place. So we’ve seen a lot of movies like this. Both of them may have equal amount of talent, equal amount of hard work, effort, everything. Yet somewhere they are not able to handle money, is it?

Nandish: So there’s an analogy which I would like to give you. Let’s say there are two balloons. Balloon A and B. Balloon red and balloon blue. And you release both. One goes up and one does not.

Now why did this one went up? Why did one balloon went up?

What must be inside that balloon that it went up?

Jinay: Helium.

Nandish: Absolutely. So one was having helium and one had normal air. So the one having helium automatically went up So the same happens with human beings.

So two people passing out from the same college, they get the placement in the same organization, maybe similar package, but then after 5, 10, 15 years, their financial life will be different. So it all depends on their relationship with money.

Is it like helium that they’re going up or it is like a normal air where they feel stuck and they stay at the same place. So it all depends on their relationship with money.

How do they see the world? How do they see money?

Even the work that they are into, how do they see their work, everything. I think it’s a sum total of each and everything that is there inside that person. And if that is like an helium, the career goes up, the financial life goes up.

Jinay: So when is this relationship with money formed if both of them are the same talent and work ethic?

Nandish: Well, I think if I look at my life or if I look at the people that I have worked with, Somewhere it starts from childhood, some incident that happened in our life. Still, it shapes our relationship with money. Like I remember when I was a kid, you know, I remember certain certain sayings you know that my family used to say that and that influenced me a lot you know like if you don’t study then this will happen if you don’t do this that will happen or there was a toy that i wanted when i was a kid and i was not given that toy just because it was a costly toy and money was not there and it had a huge impact on me like oh my god like money is so important and i did not i did not get that toy which i really wanted and my parents don’t love me my parents gave higher weightage to money than than the kids wish so now when my kid, he will ask for something that incident will automatically come in me and i’ll say yes to everything that he wants and then my wife will tell me why are you saying yes but she doesn’t know that when i was a kid a lot of things were not given to me and then i feel like okay if i have the resources why not i i give that to my kid so i think it’s not about those things or giving or not giving but then teaching the kids also the responsibility of uh of of understanding the value of money and uh having the abundance conversation around them always rather than always operating from, from scarcity.

You know, so when my kid will say, let’s buy a Ferrari or let’s buy a Rolls Royce, I will not say, oh no, no, it is very costly. It is, no, I’ll not say all of that.

I’ll just say that, okay, right now that’s not the requirement. You know, we don’t need that right now. It’s not on our list right now. And, uh, and these are the things that we are focusing on. And then he’ll understand it.

So I think it all starts with our childhood. Maybe the first incident happens somewhere when we are five, six or seven years old. And then so many experiences, you know, I think life is all about so many experiences that happens and then it keeps shaping our relationship with money.

So somebody a spender, somebody becomes a saver, somebody becomes an avoider. So all these relationships, they get created over a period of time. So maybe it starts with that one incident when we are in our childhood, but then it keeps on building up till we start earning money.

Jinay: So how important it is to actually discuss this relationship with your money, with your financial advisor, because most people don’t tend to do that.

And eventually they feel lost.

Nandish: Yeah. See, this is this is the software which is inside. So if the software is not handled, the outcome will always be based on the software that is there inside. So if the person is a spender, let’s say the internal system is of being a spender.

So then he’ll build the corpus. He’ll spend the money. He’ll read him and spend the money. And I’ve seen that into a lot of our clients. If they are a spender, this is how their relationship with money is. If they are a saver, they will not redeem very often.

They will stay invested. They will save a little more. So that is how they operate. So if this is discussed with the financial advisor, then the financial advisor can blow the whistle whenever it is required. Whenever the situation arises, the advisor can remind the investor that boss this is your design and it’s my job to make you present to the design so that you are able to take an informed decision.

Because otherwise a spender; a new iPhone comes and then something happens to the spender. The spender walks into the mall, something happens to the spender. Even if he has 10 pairs of shoes, he’ll buy the 11th one. And they have all the reasons to justify life happens right now.

They have all these reasons to spend money. So I think financial advisor is one where If he’s like your coach, then you are discussing with him, like, this is how I am. This is how I have been in last few years. So help me to improve my, my wiring.

You know, so once the wiring is in place, then better decisions can be taken elevate his or her financial life.

Jinay: I think that was a wonderful discussion. And what we’ll do is we’ll try and expand it in our further conversations moving forward. Because we need to also classify who is a spender, who is a saver, who is an avoider. So we’ll do it over the week.

Nandish: Sure. To get into the characteristics of all these three, four patterns which are there inside different investors. And once you get present to your design, I think the grip of the design reduces.

It helps the investor a lot.

Jinay: Absolutely. So we’ll do that definitely in the next video. Thank you so much for your time, Nandish bhai.

Nandish: Take care. Have a great life.

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Nandish Desai talks about the “noise” surrounding money—deep-rooted fears of scarcity, societal pressure, and the constant pursuit of “more.” This noise creates a psychological prison, especially within the Indian middle-class mindset, where even substantial wealth may not eliminate insecurity.

Financial freedom is deeply personal. Each person must define it for themselves instead of chasing ₹100 or ₹1,000 crores!

Nandish shares a key insight = the shift from “having more” to “wanting less.”

Ultimately, financial freedom is not about a number but about inner courage—the confidence to earn, spend, save, and invest without fear. It is this courage, combined with clarity of purpose, that enables individuals to live freely and meaningfully.

Transcript of the Podcast!

Jinay: Today, I want to talk about why financial freedom is important.

Nandish: So for that, I think it’s really important to look at what is financial freedom.

And for that to understand, I think it is first important to get in touch with what financial freedom is NOT.

I think in the online world, there’s a lot of discussion on what is financial freedom, why financial freedom, but nobody’s talking about what financial freedom is not.

And if you understand that at a deeper level, then I think why financial freedom and what financial freedom and all that will emerge on its own.

So sharing from my life, I think from 2007 -2008, I have been engaging with this whole idea and conversation of financial freedom. And I think more than finding the answers, it is very important to stand in this question of what is financial freedom or why financial freedom? Just be into that question itself.

And everyone has to find their own answer.

See, I can just tell you a scientific definition of what is financial freedom and why financial freedom. But then it is important that you find your own definition, you find your own answer, you find your own freedom, because it will be different for individual see we all have different variables in life you know some are dealing with relationship breakdowns or some are dealing with ailing parents some other breakdowns and so it is very important that you find your own meaning you find your own definition of what is financial freedom or why financial freedom so i always feel that we are more like in a prison, which is not made of iron, but it is made of noise.

So noise like it’s all scarcity.

It’s very important. We get in touch with the prison that we are in of I’m not good enough, or if I will not accumulate more money, I will die or everyone is behind money.

Why not me? I also do that.

So there’s a lot of noise that we are surrounded with. And if we are able to dismantle the noise, then I think freedom, it was always there. There’s nothing like we are going to achieve something.

I think it was always there. And then you get in touch with it.

So it’s not about finding the answers, but I think standing in this whole question of what is financial freedom. And for that, it is very important to first dismantle what financial freedom is not sort of working with a lot of people.

I’ve realized accumulating a few hundred crores is not financial.

It’s more money.

More money is more money. More money is not financial freedom.

I’ve seen people with a smaller corpus enjoying the best of their life. I’ve seen people with extremely bigger corpus, but they are living a miserable life.

So it’s not about accumulating a lot of things. It’s by the time I reach 50 or 55, I got to accumulate a lot of money.

No, I think this whole conversation of financial freedom is putting unnecessary pressure on a lot of people and that’s not a good thing.

I think whoever is listening to this conversation right now, even if my son is listening, or anybody is listening, my wife is listening, my family members are listening, or friends, or anybody who is listening right now and watching us, I don’t want to give them a false dream of. I think that’s not where financial freedom is.

That’s not what we are designed for.

That’s not what we should aim for.

So everyone has to find their one answer.

Everyone has to get in touch with first what financial freedom is not.

See, there’s very minimal work done on understanding the mindset of an Indian middle class. It’s so deep rooted in us. There is so much of scarcity.

Even if you build a hundred crores or thousand crores, you’ll still feel .

I need a little more.

So from 2007, 2008, I first heard this word financial freedom, started contemplating, meditating on this word, on what it means. And my definition has also changed over a period of time.

And now I feel that creating a meaningful life is much more powerful than talking about financial freedom or playing for financial freedom. I think that’s where all the magic is.

And we are into this prism, like we are taken away completely by this money conversation.

It’s all money, money, money.

I need to have more. I need to create more from morning till night. It’s only the money conversation. So it’s making people crazy right now. It’s making people mad right now.

And we are not the owners of money. We are the servant of money.

We are addicted to this whole conversation of fire, financial freedom and whatnot. So it’s very important like everyone gets in touch with what financial freedom is not.

Like find out that first, get in touch with your deepest of the fears around money.

Get, you know, get it very clear that all those fears are not at all real.

And I’m not saying don’t. earn money, I’m not saying don’t build wealth.

You can do all of that.

But in the end, it will be empty if you don’t understand this game, if you don’t understand the mathematics of financial freedom.

So it’s very important that you You find your own answer, you find your own process, you find your own happiness. And I think that is where the financial freedom conversation should emerge from. This is a starting point and there will be a lot of things coming later on.

So now the stage that I am in, I feel that having more will not make me happy, but wanting less will make me happy.

Jinay: That is interesting.

Nandish: I don’t want to have more. I want to have less.

I think living a minimal life is where I find there is more freedom into that.

So when it comes to eating food or the things that I purchase or the kind of life that I live, it’s all about wanting less rather than having more. That’s the stage that I am in.

So if somebody is a beginner, you know, have not yet built a sizable corpus or a minimal corpus, focus on building your skills and earn money, save money, all of that is fine, but don’t get carried away. And, you know, you are completely pressurized by this fire conversation.

Jinay: I think that’s not a good thing for somebody who is in the start of their career.

But I’ll tell you what, when you’re talking about I want to live a minimal lifestyle, the person who is starting their journey today, they’re already living that minimal lifestyle.

Hence, they are looking at having a higher corpus and hence they feel more money is more freedom. But what you’re saying is complete opposite.

I mean, you know, you should expand on that. How does that work?

Nandish: See, an individual, you will get it only once you reach that place that, oh, this, it does not solve all your problems. It does not, it’s not the solution to all that you are dealing in life.

So earning money is important. Experiencing things is also important, but then what I’m saying is one should play the game freely rather than Taking all this pressure that this should happen, that should happen.

Otherwise, I will not be successful in life.

No, I think I am just asking people to remove the pressure that they have put on themselves and then playing the game freely.

See, all that we do, Jinay, in entire days, we do only, I think, three things. I think we stand, we sit and sleep.

I think this is three things. Even after building 100 crores or 1000 crores, all we will do is we will stand, sit and sleep.

I was just talking this to somebody that why it is important to create a corpus, why it is important to build a minimal, like a sizable, a good, strong corpus so that

I was not born just to have financial freedom.

I was born for maybe some other things as well.

But you are able to see those things only when money is handled in your life.

So I feel that handle the money conversation so that you are able to experience other facets of life.

We will show some colors, some music will show in life rather than only building something and accumulating something. I think that is what I feel people should play for rather than just focusing on building a bigger corpus, playing for financial freedom.

Otherwise, it will be hollow. It will lose its meaning.

Jinay: So I think it’s a very beautiful conversation you’re having. Money at the end of the day needs to have some value. Basically, you’re not just accumulating a number, you’re actually spending it with the people you love, doing things that you enjoy doing and taking care of your health.

Nandish: Yes.

Jinay: Money should have that utility value. Otherwise it’s just a number that is sort of going up.

Nandish: Absolutely. See, it is, it is an important thing. Maybe it is next to oxygen for a lot of people, but still like as human beings, we got to find out some value, some meaning into it, make our life more meaningful.

See, when 2004, 5, 6, when I started my career, I probably didn’t have money at that time. I’m able to express myself fully. I’m able to enjoy my work. Or I think my attitude is still the same of enjoying what I’m doing and still holding that beginner’s mindset.

Like, okay, we’ve got to keep learning. We’ve got to keep working on ourselves.

And I’ve always seen money as a byproduct and not the mean thing. I’ve never made it a mean thing.

Jinay: Absolutely. From what I gather, financial freedom is important if you are able to live the sort of life that you had earlier desired or imagined that you want to live.

Nobody starts their career thinking we’ll have XYZ money in the bank account.

Everybody wants to travel. They want to see the world, they want to wear the best of the clothes, eat the best of the food. But somewhere along the way, like you rightly said, that fear, somewhere it creeps in of scarcity. And we simply disconnect ourselves from what we want to achieve versus the number that needs to come out there.

Nandish: Absolutely. So see, once that inner courage comes in, that i can earn money i can save spend invest grow once that courage comes in i think that’s from where that financial freedom comes the freedom comes from courage and not from having a bigger corpus or just building a lot of money you know it comes from that inner courage so if you build that inner courage and then you live your life from that inner courage the job is done it’s amazing it’s amazing you

Jinay: Amazingly you’ve put in. I mean, there’s no better ending to this conversation than this. Thank you so much for taking your time out and sharing it.

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So I sat down with Nandish Desai (my elder brother, my money and life coach) to bring his experience and wisdom to you!

Here’s the transcript for you!

Jinay: So when we are talking about financial planning for couples, why is it important that both partners need to be on the same page? And what pitfalls have you seen in the whole journey?

Nandish: Sort of working with a few hundred thousand investors.What I’ve learned is that it is extremely important, husband and wife. to be on the same page when it comes to personal finance, because then the magic can be created. If you want financial life to get magical, then both of them have to be on the same page.

It’s like if financial life is an aircraft and then husband and wife is like a pilot and a copilot.

So if pilot and copilot are not aligned, what will happen to the aircraft? It’s as simple as that.

So both has different strengths and weaknesses. Maybe one is a spender, one is a saver, one is good with numbers, one is not that good with numbers.

So both will bring something into the financial life. And that is the reason why if both are together, both are taking interest, they see themselves as one unit because we always see husband and wife as one unit. So they are earning separately which is fine but then it’s one unit they are handling all the expenses together they are they travel together they maybe they’ll they’re going to retire together so if they both get aligned say it’s about alignment why if once they come together and once they are aligned okay this is how

This is what we have decided to be after 5 years, 10 years, 15 years. And when that alignment is there, then this whole journey becomes very, very smooth. Otherwise, one wants to spend, the other wants to invest, one wants to travel, the other doesn’t want to travel.

So if there’s no alignment, then it leads to chaos and financial freedom can never become possible.

Jinay: In most of the conversations that we have seen, when, let’s say, one of the partner is not working, and when it is India, it is usually the woman partner who is not working. They don’t feel that they are important enough to be a part of this conversation at times.

So how do you handle that?

Nandish: Yeah, so earning or not earning, I think, is not important. What is important is having respect for your partner including your partner into the game and it’s not just about your future goals but giving equal weightage and equal importance to your to your to your partner i think that is so when they feel included then they start bringing if they’re not bringing money into the conversation, they’ll bring some ideas.

They will say, okay, so I’ve seen those ideas coming up when they are included into the conversation.

So there is oneness. There is inclusion. It’s more like a teamwork.

So if you compare it with any company, let’s say in an organization, so there is a sales team and there is, let’s say, a non-sales team.

But when they are put together, even non-sales team will bring some ideas into the company. It’s not like only the sales team is important. I think everyone in the organization is important.

Similarly, I think everyone in the family is important and The more people you include, the better it gets.

At least husband, wife, and maybe at a later stage, once their kid grows up a little bit, even the kid should be part of certain conversation.

Jinay: So you even include children in these conversations?

Nandish: Oh, yes. after after kid turns maybe 13 or 15 then slowly including them into certain meetings some conversations uh i think it’s extremely important like it is it’s all teamwork like husband wife and at a later stage even adding kid into the conversation uh so whatever document that i create for our clients i always tell them that this is not something that I am giving it to you.

It is your document which we are co-creating together.

And when husband and wife are included, they are part of that conversation, then the ownership of the document increases. Yeah, this is my financial life. This is our financial life.

And then the magic gets created. I think that is what I’ve seen.

So in some cases, sometimes husband takes a lot of interest, wife takes some access, sometimes wife is taking a lot of interest, husband is not that interested into numbers.

But I think when they are together, maybe one person does not understand numbers completely, but he’s present, he’s there. trying to understand things.

Okay, this is what we are doing, why we are doing.

So, what we have seen in a lot of cases is that 10, 15, or 5, or 6 years later, if one partner has something happened, then the other partner has the idea that, yes, I have been part of all these discussions.

So, then that person can handle the finances in a much better way.

Jinay: Okay.

Nandish: So, even that I have seen in a lot of cases. We have seen, like, you know, wife losing husband and then, you know, because wife was part of all these conversations, she was confident enough that she knows what actions have been taken so far, car loan is going on, how to dispose the car, whom to contact, what to do.

You know, so all those things becomes very, very easy when we have included people into the conversation.

Even my wife, like I am into finance, but then I’ll always keep including her into these conversations.

Extremely important.

Jinay: I think that was a very good insight. And if you can share an experience where magic happened.

Nandish: So we have witnessed a lot of clients that we have, each and every call, like husband and wife have been together on the call, each and every call.

Not a single call, husband has missed. Not a single call, wife has missed.

And one of the client that we have, just I think last month, When we did the call, we could see that they have achieved financial freedom now.

They are in a very good zone in their financial life.

Achieved financial freedom. And I could see that happiness in that call.

They were like, it has become possible.

The dream has become possible.

It’s real now. And both of them, they were looking at each other.

It was like a happy moment.

I could see that. I could feel that space on that call that we did it. We did it.

It was not like I am doing something, you are doing something. It’s like we did it. We achieved it.

And in those last 10 years, husband made a lot of sacrifices, wife made a lot of sacrifices. And in that moment, I could see that it was all worth it.

All the sacrifices that they made, all the efforts that they took,

It was all worth it. And now they have achieved financial freedom. And they were very happy about it. So that’s why I said, it makes things magical.

Your speed increases.

Your velocity increases.

Your momentum increases.

You are able to take better decisions when this alignment is there.

Otherwise, I’m going to think of something. I’m going to think of something. I’m going to think of something. I think then you can still achieve it but then it’s it’s not a smooth journey say cricket ka team all the players are aligned then the match performance goes up again but then we don’t know the outcome it will not be like an aligned team is always powerful than a non-aligned

Jinay: Teamwork makes the dream work.

Nandish: Teamwork makes the dream work. And it’s including people.

It’s giving importance to the other person, being honest to the other person when it comes to money. I always tell husband and wife, bring honesty into your financial life. If something is not working, say that. Otherwise there are a lot of people they hide from their responses.

So if you are not honest with your immediate people, you cannot create magic.

So I have seen a lot of honesty. At least there is honesty. We are accepting it.

And then we are taking joint decisions on those calls.

Okay, whatever has happened, now what’s next?

Okay, now from here, what’s next?

What’s the next milestone that we are working on?

What’s the next action that we can focus on?

So that their overall financial journey gets elevated. And I always tell them about mistakes to overcome. grows, the intensity of making mistakes also expands.

You make bigger mistakes when your network expands. Think like this. Avoid these kind of mistakes. And then they both listen and try to make sure that those mistakes are good. So that’s the reason why both of them are on the phone.

Jinay: Absolutely so i think thank you so much for these last 10 minutes i’m very sure a lot of magic will get created in people’s life as they listen to this part!

Concluding Remark: This is first of our many conversations to come!

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CG Power didn’t turn around because of fancy strategy or financial engineering. It turned around because the leadership focused on trust first, paid vendors before banks, took quick decisions, and treated people fairly. Money followed intent.

I’ve read many business books over the years.

Most of them sound impressive, but very few feel real. They read like a CEO looking back and saying, “See how smart I was.” The mess, the fear, the uncertainty—all of that is quietly removed.

That’s why many people stop reading business books. They don’t see real life in them.

Which is why The Great Revival, written by Natarajan Srinivasan on CG Power’s turnaround, caught my attention. Not because it was dramatic—but because it was honest and written from CEO’s own experience.

A Situation Most People Would Avoid

When the Murugappa Group took over CG Power, this was not a comfortable situation.

The company had:

• Around ₹2,933 crore of debt

• Nearly ₹700 crore of unpaid vendor bills

• Delayed salaries

• Negative net worth

On top of that, the earlier promoter was accused of taking out large sums of money. Trust was broken everywhere—employees, vendors, banks, markets.

Even the legal advice was to stay away. There were chances that new liabilities would keep coming up.

If leadership was only about avoiding risk, this deal should never have happened.

But leadership is not about playing safe all the time. Sometimes it’s about asking: Is this business still worth saving?

The Decision That Really Mattered

Early in the turnaround, management had to take an important call.

Who do you pay first?

Most companies will say: banks. Because banks shout the loudest.

CG Power did the opposite.

Banks were handled through discussions and negotiations.

Vendors were paid immediately. In full. No arguments. Around ₹700 crore of vendor dues were cleared within 75 days.

Along with something very important:

• An apology

• And a clear message: “This will not happen again.”

When I read this, everything else made sense. This was not kindness, this was clarity.

In India especially, vendors are the backbone of any manufacturing business. They give credit. They support during tough times. They adjust quietly. If vendors don’t trust you, the business will never run smoothly.

Paying them first was the smartest decision in the entire turnaround.

One thing the book makes very clear is this: Business is run by people, not balance sheets.

When employees feel secure, when vendors know they will be paid, when customers feel respected—things start falling into place. The management called their approach “business as unusual.”

Instead of cutting ambition, they increased it.

Instead of slowing down decisions, they sped them up.

The CEO said something that stayed with me: “I considered decision-making time to be the biggest inventory.”

In simple words—delay is cost. In tough situations, you won’t always be right. But if you move fast, you can correct your mistakes. If you move slowly, even the right decision comes too late.

Quiet Leadership

What impressed me most was what the CEO Mr Natrajan didn’t try to be the hero of story. No self-praise. No drama.

In fact, credit is constantly given to teams, systems, and people on the ground.

That, to me, is real leadership. Doing the work quietly and letting results speak.

What I Took Away on Leadership

This story reinforced a few simple but powerful ideas:

• Trust is not emotional—it is economic

• Speed matters more than perfection

• Ethics are not idealism—they are practical

Leadership is not about knowing everything.

It’s about taking the right decisions in the right order.

At CG Power, trust came first.

PART 2: Capital

Why ROCE—not growth stories—decided the outcome

CG Power didn’t throw money at its problems. It focused on return on capital, strict discipline, cost transparency, and operational efficiency. ROCE improved from around 5% to nearly 47% in three years—without financial jugglery.

Most turnaround stories make capital sound like the hero.

Put more money, raise funds, take loans—and growth will come.

CG Power’s story is different. Here, capital was treated carefully. Almost cautiously.

And that made all the difference.

One Simple Rule

Very early on, management introduced a clear rule:

Every capital expenditure must deliver at least 20% IRR.

No emotional decisions. No “strategic” excuses.

Because of this discipline:

• ROCE improved sharply

• Growth was funded largely through internal cash

• Leverage stayed under control

Returns came first. Expansion followed.

Project Mudra: Transparency Instead of Pressure

One of the smartest moves was Project Mudra.

Instead of pushing vendors for discounts, CG Power sat down and understood their cost structures—raw material, labour, logistics, margins.

This changed the relationship.

Vendors were asked to reduce margins, but were offered higher volumes and faster payments. They ended up earning more money, not less.

Expected savings were about ₹30 crore. Actual savings were far higher, in triple digit crores.

This is how capital discipline should work—by aligning incentives, not squeezing partners.

Project Lean: Doing More With What You Have

The second big initiative was Project Lean, inspired by Japanese manufacturing practices.

Factories were redesigned. Processes were simplified. Space usage improved.

The mindset was simple:

Instead of asking, “How much money do we need to grow?”

Ask, “How much more can we get from what we already have?”

Over three years, this saved more than ₹100 crore.

The Strongest Signal of All

One line from the book stayed with me.

During the toughest phase, CG Power’s dealers gave cash advances to suppliers so that production could continue.

Think about that.

When dealers use their own money to support your business, it means they trust your intent—not just your balance sheet.

No financial model can capture this.

What This Taught Me About Capital

The biggest lesson for me was simple:

• Money doesn’t create discipline

• Discipline creates returns

• Returns attract money

ROCE is not just a number. It shows the quality of decisions over time.

When leadership and capital discipline come together, turnarounds don’t just survive—they create returns for the entire ecosystem.

Happy Reading !!

It’s a strong question to which my ego quickly replies, ‘I just love books, so give me anything and I will read’ and yet there are piles of books completely untouched, some I must have read for a few pages and just kept it there and while some are in the Wishlist just to show others that, ‘if time permits, I will surely read them.’

This is how my own ego tricks me into believing that I can read anything and everything.

It’s far from the truth! And this is how I discovered it.

Every once in a while, I just stumble upon a piece of writing that challenges my existing belief system. Author / writer just forces me to think in an opposite direction backed with data and boom – there’s a new angle to see the world around me, experience it and be compassionate towards it.

OTP Please! by Vandana Vasudevan is one such story.

After reading a detailed review of the book in a leading business newspaper, I thought of reading it.

The book is based on the gig-economy, the very hustlers who are riding their bikes to give us groceries and food, those who spend 12-16 hours on their 2 wheelers / 4 wheelers to transport us from one place to another and especially those who come to our home for repair work, cleaning, beauty services, etc. as we use those Apps on our phones to summon their services.

Initially, I thought it would give me an idea into how these e-commerce companies work and might get some insight into their work culture, etc.

But I didn’t realize that I was going to have a whirlwind of thoughts, and this book would completely enhance my lenses to the World we are living in.

In a nutshell, the book has enabled me to see things that I once took for granted. It’s like swallowing that red pill in Matrix and suddenly you start seeing the reality, while being in one.

Allow me to share a few things that I’ve experienced after reading the book.

The 5^th Meal Saga!

I sort of understand 4 meals a day – breakfast, lunch, evening sacks and dinner. And somehow there’s a 5^th meal now added to our lives.

It’s when we are looking to unwind from a long day at work. In some sense, we call it ‘Me Time’ which is spent infront of our favorite Netflix show / movie.

All you need to do now is push an App on the phone and summon food from local restaurants who are serving at 12 am (midnight) or even 2 am or so. Simple!

When I read this, I was completely shocked. There was a sense of disbelief that such habits do exist. Since author had compiled data and written a few experiences, I decided to ask a few people around.

Trust me, what unfolded next completely changed my lenses.

Most people were so casual about it. Some even judged me as if I wasn’t enjoying my life and money enough. The 5^th meal is just woven into their lives like a neat fabric.

Few families told me that their kids are habituated of eating outside food now. They can’t stop it. If they even confront them, they won’t eat homemade food.

Last week as I was sitting in a restaurant and waiting for my food to arrive, I found a mother-daughter duo sitting right next to our table. It was 7 pm (yes, I eat early) and the mother goes on to tell her daughter that there’s dinner prepared at home and she is only allowed to have starters here.

And when I saw their starters, they were way more than my dinner.

No wonder there are several studies talking about 50% of India being obese by 2030.

This craving for outside food and eating well beyond our bodies have the capacity to digest is going to seriously give us risks of diabetes, cancer, heart attacks and so on.

But then, this is the new culture – You Live Only Once!

More on this in later blogs!

The Gig Workers – Heart of the Book!

Usually, when I’m driving around the city for work or leisure – there’s a voice in my head that’s always judging the other person’s driving.

Since we are blessed souls, driving a luxury 4-wheeler, our lenses for 2 wheelers, especially delivery boys are just too bad. (yes, I’m ready to admit it)

We are always judging them for driving in the wrong lane, cutting corners, breaking traffic rules, etc. and thinking of ourselves as demi-gods who are just born in a wrong country.

Little do we even realize or even think about them!

Author has spoken to 5,000+ such gig workers and written the book. There are several interviews in the book that make you think that this is the World that we just take for granted.

Let’s take delivery boys for instance, they work for 12-14 hours a day, doing several deliveries and only to earn Rs 1,000 per day (upper limit).

Once again, I decided to test this.

Me and my wife were returning home one night around 11 pm and it was raining heavily. As we waited for our lift to arrive, a delivery boy was quietly standing behind us. As the lift came, he waited for our permission to enter the lift.

I took the opportunity and asked him, how much do you work and how much do you make per day?

And the answer exactly matched the author’s version of the book.

It wasn’t just a surprise; it came as a shock to me.

These delivery boys work close 12-16 hours per day, in scorching heat or terrible rain, with the quality of roads that are designed to give you a strong back pain, no insurance if any accident happens, no laws from the Government to take care of them and they are at the mercy of a customer to give them a star rating for a brief encounter of 5 seconds.

Yes, the skeptical version of ours always tell us that there are bad apples too!

For that, my answer is always simple. Bad apples are everywhere – they can be customers, platform owners, gig workers, anyone.

So why single them out and speak as if it’s the norm. Just to hide the other plain truths!

It’s easy to ignore the hardships of those are below us in the social ladder. If you don’t see the problem, for you, it doesn’t exist. Simple!

These gig workers have formed a part of our invisible economy. They exist and yet we don’t meaningfully see them.

That’s the reason we don’t have a law or regulation that oversees their activities, takes care of their insurance or provide any sort of social security.

Government has also ignored them as they ignore the potholes that are on our roads.

The Consumption Economy!

As India overtook Japan to become a $3 trillion economy, there was a gamut of paid media who went out glorifying how the last few years have completely transformed this country.

And yet these media houses who are sitting in their comfortable AC offices, ordering food, groceries, cleaning services, etc. from their phones don’t see the hardships of the very folks who they meet close to 10 times a day.

That’s what makes these folks and their problems invisible.

This consumption economy that we are so proud of completely ignores the human capital that connect its final node (product to consumer).

There’s a lot of fun in watching cricket matches at home while the food arrives from a local restaurant. Isn’t it?

We are happy to debate about whether 2047 will be a golden year for India or not. But how will we get there?

It doesn’t take a Morgan Stanely report to understand how much an Indian family is spending on food, just ask your friends and family members. The numbers will tell you the story that this is a long-term structural change in the behavior!

As we continue to summon our Apps on our mobile phones to make our lives easy, let’s take a moment to speak with these gig workers, understand their lives and design some solutions in order to make their experience of life better.

As the great philosopher Spider Man once said, ‘With great power comes great responsibility.’

India’s enterprising entrepreneurs have blessed us with the power of making our lives super easy. With that there’s a greater responsibility for ensuring that these gig workers and their families are looked after.

Conclusion

As I’m writing this post, there are several thoughts that do cross my mind. But at this point, I would like to stop here because these words have directly been poured from my heart.

This is a book that everyone should read and learn to see a different world that exists amongst us which we take for granted.

I’ve not quoted any paragraphs from the book because this post is meant to invoke a curiosity amongst readers rather than read a few paragraphs and talk about them endlessly.

No book is complete without you experiencing the World from the eyes of the author!

Over to you – OTP Please!

India’s nominal GDP as on March 2017 was $2.45 trillion and to double it from there, we would need to grow by at least 15% per year compounded to reach the targets. That meant either our efficiencies, or our inflation needed to suddenly grow by 5% and remain that way for the next 4 years.

Sounds impossible? It is. Let’s examine how.

For our efficiencies to improve to the tune that we are able to add 5% extra to GDP, India would suddenly have to invest more, produce more, earn more and consume more. In addition to this, we would also need to drastically increase our productivity and the government will have to spend a fortune by investing in infrastructure and other activities.

Real GDP is the value of all goods and services produced, calculated using prices from a specific base year (2011-12 in case of India). It compares the production of goods and services as if there is no such thing as inflation. This helps to determine the actual growth in the economy.

Nominal GDP loosely is Real GDP + inflation. The calculation is based on current prices and considers effects of inflation.

The real growth rate of GDP for year ended March 2017 was 7.1%. This meant that all the activities of production, earning and consumption would have to increase by 70% instantaneously.

To move the needle of real growth rate by 0.1% in 2018, we would need an additional capital expenditure (from both, government and private sector) of over INR 72,000 crores (or 0.6% of GDP of 2017).

If you think increasing efficiency by 70% is not possible, we would need the inflation to jump to 8.9% from 3.9% for the remaining 4 years. Do you think with this kind of inflation the industry, investments, our earning and spending would’ve remained constant?

Anyway, after Covid stuck the planet, the government conveniently averted any questions posed to them for failing to reach the target by blaming it on Covid. We did understandably face a negative growth in 2020-21 due to lockdown. However, since the year of doom, we have been able to clock a growth rate of over 13% and still, we have barely crossed $4 trillion mark recently. In the process, we have usurped Japan to be the 4th largest economy in the world.

But are we as advanced as the 4th largest economy on the planet or are we just - as Ganesh explains in this video - “a tombstone with lightings that has buried a number of shortcomings of the government?” I recommend you to watch this 20 minute video by Think School that will open your eyes to reality.

The video explains what we can learn from the failures of Malaysia and success of South Korea to break out of the middle income trap.

I recently read about a beautiful economic law called the Goodhart law. It states that “When a measure becomes a target, it ceases to be a good measure.” (read that again and slowly).

The most classic example of this law is the Indian government pursuing $5 trillion GDP number to be the absolute proof of their success. Can we be called a developed nation if we reach this mark?

Currently, the story of India is not of one economy but 3 different economies. Based on incomes and lifestyles, the top 120 million people live like Germans, the next 300 million people are trying to break out of the middle class and are just 1 hospital bill away from going into poverty. However, over 1 billion people live like African people of the sub-Saharan region. Do you think that the thoughts and aspirations of the top and the bottom tier will ever match?

What is the use of collecting accolades for the highest growth in the world when thousands of people have to still travel for kilometres just to fill a pot of water? We may rank as the 4th largest economy in the world, but how do we rank on basic necessities of life like nutrition, healthcare, sanitation, education, etc?

Whether you are a supporter of this government or not, you know that this government will do what it decides to do by any means or costs. We will see all kinds of achievements and successes on paper, however, the ground reality will always be different. It is differences like these that compels you to hide your slums with hoardings when you invite the world leaders for hosting G20 summit.

Since 2021, the government has started spending heavily on infrastructure. The Modi led government has more than doubled its spending on infrastructure projects at INR 37 lakh crore in its second term (2019-2024) as compared to its first term (2014-2019) where the total spend was close to INR 16 lakh crore.

The noble reason behind such huge spending was to support the trembling Indian economy that faced pressures due to lack of confidence after Covid lockdowns, geopolitics, inflation, higher interest rates and the worst and the most important of all - broken chain of cash flows. For the best part of their second term, you can attribute the success and growth of the Indian economy (and India’s GDP) to government spending.

The government, however, had high expectations of private investments and individual consumption to follow suit. The brightest trend visible to the government post Covid was of a phenomenon that we know as ‘Revenge spending’ today. With lockdowns and WFH becoming the buzzwords of the time, people hardly got any opportunity to spend. Once people stepped out of their houses, all these savings were spent at-once in shopping new homes to new clothes, taking vacations, enhancing lifestyle and so on.

This trend seemed obvious to continue, and even rise with more people finding jobs and the economy booming. However, as situations got normal, consumption did too and the patterns moderated. This did not give the government sustained advantage from their high spending.

Another expectation of the government was on Corporate India to start investing in new projects to scale businesses on the back of China+1 strategy and create more job opportunities only to get disappointed eventually. With inflation and bank rates remaining consistently high, the confidence was low among corporate India to commit to new opportunities that could potentially blow out in case of another lockdown, inflation surge, reversal in trend or even continued flat growth.

The government has now shifted to a not-so-noble path in order to drive consumption. Simple economics tells us that in order to drive consumption, you need to leave more money in the hands of an individual. This can be easily done by making people believe that they have more money in their hands.

The Indian Middle Class

The middle class of India is known for its conservative nature and savings culture. Going back to the early 80s, a typical Indian middle class comprised of a family of father (being the sole earning member), mother (usually a homemaker), 2-3 children and grandparents - all living in a one room + kitchen setup. Whether the father was a salaried individual or owning a business, whatever he earned was enough for the family to put food in their plate and give them elementary education. Further savings in FDs and Gold meant the family was secure enough to afford weddings of all the three children and have something for their retirement.

Times have drastically changed since, with individual necessities increasing and each child wanting his or her own room. There has been NO improvement in the education over the years - I remember syllabus being updated only every 15 years when we were in school. This meant huge gaps to be filled in by universities abroad setting up businesses and charging a bomb even for imparting decent education.

What has changed though is the ease of making payments through UPI apps. We still have conversations of how we were able to avoid making impulse purchases before these apps only because we did not want the hassle of breaking a bigger denomination currency note for a tiny expense. Access to credit has also improved with micro finance and small finance institutions tapping these unexplored groups. EMIs have not become a household word but you would be surprised to know that EMI was adopted in India only in the late 1990s.

Finally, the last blow has been given by the scintillating life of social media which is just a one-sided mirror of the world. You see people that you aspire living the life of your dreams (or you manufacture your dreams by looking at random people). Naturally, nobody posts reels of them doing their daily chores like cooking or washing - it’s always the wow factor activities that qualify for it. This activates the age old psychological trigger of “Monkey see - Monkey do” where you too want to visit those places and more so - SHOW that you too are living that life - even if it means putting a hole in your / your family’s pockets.

The result of all this? Middle class is having increased liabilities due to ease of payments, easier access to credit and BNPL (Buy Now Pay Later) schemes. The middle class also makes up to the highest number of salaried class individuals - who have very few avenues for tax planning. In such pressures, the only respite for these individuals to invest and get rewarded for it was through deductions provided in the income tax for investing in schemes like PPF, EPF, ELSS, NSC, SSY, etc. Income tax also provided exemption for expenses in premiums of life insurance and mediclaim. You can check this article of how rewards of investing changed here.

The Indian middle class is the biggest section of the Indian population as well as its taxpayer base. It is estimated that over past 10 years, the people earning between INR 5 lakh to INR 25 lakh per annum as increased by 300%.

The New Tax Regime

In the budget of 2020, the government introduced the ‘New Tax Regime’ that came with lower slab rates and new tax slabs. The catch? All deductions under House Rent Allowance (HRA), Section 80C and Section 80D had to be forgone by taxpayers.

It seems fair and like a normal give and take in which the net winner is the individual who now has more money disposable income in his hands.

More disposable income = more spending = more sales = higher GDP number.

By pulling away the benefits relating to investment and insurance, the government made investing in these schemes no longer attractive. The people who were habituated since a long time still continue in spite of not getting the benefits. However, new investors do not have enough incentive to invest in these schemes anymore and will now be susceptible to invest less or not invest anywhere and rather use this extra disposable income for their aspirations - thereby increasing consumption (including unnecessary consumption).

Conclusion

Sure, more consumption is good for the country’s metrics, but only running after this one metric comes at the cost of sacrificing the potential for long term financial security of its citizens by discouraging investment. India is still not a country that can provide basic income to the unemployed, retirement benefits, health benefits or any such financial safeguards even to its 1.50% taxpayers - forget giving it to all of 140 crores population.

If you want to know the extent of benefits taken away from the investments, you can read our previous article by clicking ‘Is it worth investing in PPF’. If the government takes away benefits of savings and investments, you are potentially risking your population to get bankrupt by the time they retire. This can potentially create a loop of mismanaged finances, leading to missed repayments, non-performing assets for financial institutions and pressure on the overall financial chain in the long run.

1. India stands ground by maintaining Russian oil imports despite tariffs from the US

2. TCS lays off 12,000 employees, AI and the future of Indian IT sector

3. Q1 earnings of Indian listed companies disappoint

One week, we celebrated the India UK free trade agreement where the UK promised to eliminate tariffs on 99% of imports from India while the very next week, we are facing sanctions from the US for supporting Russia.

US is still a superpower in terms of military when it comes to force and in terms of consumption when it comes to business - there is no doubt. It has been the biggest importer in the world and has survived like that for decades only because on one thing that US has and the other countries don’t. It’s free currency and control on global trade through the swift network.

But when the same country misuses it’s assets to bend the world to its whims and fancies, it creates problems not only for the country getting bullied, but also other chain of countries linked to it due to trade, sharing of resources and peace in general.

It is so ironic that the same US that came up with the idea of NATO, where it gathered smaller, weaker nations against the bullying of Soviet Union and its might is now itself acting like a bully to nations weaker, smaller than them.

This time, Trump has set his sights on India and our relationship with Russia. It bothered Trump that India acting like a true friend of Russia, who had helped us immensely in 1960s when the US kept bullying us and intervening in our plans.

Anyway, the US has now levied a flat 25% tariffs on Indian goods and an additional undisclosed rate for supporting Russia. It’s of course, not ideal for India as Indian goods will become more expensive for the US consumers, however, it needs to be seen how the US consumer behaves now as Trump continues to levy tariffs on every nation on the planet.

Here’s how the markets performed this week -

Indian stock benchmarks faced their worst losing streak in two years, with Nifty closing at 24,565 and Sensex at 80,600. The weekly decline was attributed to renewed US tariffs, global growth worries, and continuous foreign outflows.

India stands ground by maintaining Russian oil imports despite tariffs from the US (click here)

Ever since India started buying Russian oil, the message from our government has been loud and clear - “The government of India has a fiduciary duty towards its citizens and will act in the interests of its citizens first”. Russia was sanctioned and hence, the Russian oil did not have enough demand with their largest buyers - the European Union - deciding against buying Russian oil since the beginning of Russia-Ukraine war.

Firstly, the oil contracts are long term in nature and even if we decide to put an end to them, it cannot be done overnight. Most importantly, India is the third largest consumer of crude oil and if India enters the non-sanctioned market, the global oil prices will shoot up and the price increase will trickle down to every other item in the world.

TCS lays off 12,000 employees, AI and the future of Indian IT sector (click here)

TCS has announced to lay of 12,000 employees or 2% of its workforce. While TCS has clarified that this is not due to AI but skill mismatch, it is clear that these mismatches have become apparent with AI coming into the picture.

However, the most striking fact is that these cuts are concentrated at the middle level employees and not at the entry level. AI is challenging the traditional pyramid structure followed by IT companies and are now focused on innovation and result-oriented delivery.

TCS has always been called the poster boy of Indian IT sector so there can be some certainty in the claims that the entire IT sector may follow and offload employees that do not add much value. Earlier, when Microsoft laid off over 15,000 employees, they gave a 6-month window to the employees they retained to adopt AI or perish.

Q1 earnings of Indian listed companies disappoint (click here)

While the Nifty 50 has shown a steep growth of 11% in the index prices since March 2025, the results have miserably failed to follow. Out of the 667 companies (excluding BFSI) that have already announced their results so far, the revenue growth is just 8.1% while the net profit growth is only 5.4% on year-on-year basis. When we see these numbers sequentially ie on quarter-on-quarter basis, India Inc is in the negative on both metrics with revenue growth at -2.9% and net profit growth at -16.9%.

We have not witnessed such a fall since June 2023, when the results had understandably gone down due to higher growth base immediately post Covid. This time, the numbers might be similar but the reasons drastically hint elsewhere.

Since we are still getting mixed data points in terms of rural growth, consumption, layoffs, interest rates, etc., it’s hard to see what is to come next. The rate cuts have come in recently and we will have to see if the businesses still need time to recover from the higher rates and slimmer margin scenario that had lasted for at least last 3 years or they will show immediate confidence and start investing.

In any case, it will be another 3 quarters at least for it to take effect.

1. Hindustan Unilever appoints Priya Nair as new MD & CEO

2. With the July 9 deadline gone, India - US trade negotiations yet to be finalised

3. Life insurance policy sales drop 10% in Q1

The victims and the families of Pahalgam Terror attack and the crash of Air India’s London bound flight are still in our thoughts as we write this newsletter. It’s difficult to absorb such information and still lead our lives in a normal way.

Now, let’s look at how the markets performed this week:

Equity markets tilted more towards the negative due to sub-par results from IT giants like TCS. You see, TCS is usually considered to be the barometer of Indian markets when it comes to quarterly results. It gives investors the flavour of the overall result period.

Trade tensions from US and other global uncertainties, however a norm they have become and how much ever investors may have factored in their thesis, they keep most investors at bay.

If you are a new investor who has started after Covid era and have seen the markets sky rocket, now would be a good time to correct the compass of your expectations. They way markets have behaved over the last few years was a mixture of several factors - biggest of them being sudden splurge of liquidity in the markets through investors who never touched them and ones who saved enough to invest enough.

Over longer run - especially when you see a 5-year and 10-year data before Covid stuck, the average 5 year and 10 year index returns of Nifty 50 and BSE Sensex was between 8% and 9%, which has now risen to ~13% for both periods.

This is not to discourage you or tell you that investing in equity is a thing of the past. Markets never get old. They will keep throwing opportunities time and again.

Keep your expectations minimal and standards high. This will open you to a plethora of opportunities and as we keep telling everyone - your time IN the market is more important than TIMING the market.

Story #1: Hindustan Unilever appoints Priya Nair as their new MD and CEO (click here)

I’m sure you have read this on every news publication or even a WhatsApp news message that you get. HUL appoints first ever woman CEO.

While this is a great news and firsts are always special, we only hope that women CEOs become such a norm in the Indian society that there is no sensationalisation of news on the basis of gender, caste or ethnicity.

We are the fourth largest economy in the world and still playing ‘boys are best or girls are best’ doesn’t suit us.

Now about Priya Nair - the woman of the hour -

Priya will succeed Rohit Jawa who served as a CEO for two decades. She is the president of beauty & wellbeing at Unilever, London, and oversees a €13 billion portfolio that includes hair care, skin care, prestige beauty and health and wellbeing brands across more than 20 countries. She will join the board at HUL, subject to necessary approvals, and continue to be a member of the Unilever Leadership Executive.

Her significant contributions led her to become the executive director, home care, HUL between 2014 and 2020, thereafter, the executive director, beauty & personal care, HUL from 2020 to 2022,” the company statement said. Subsequently, Nair became the global chief marketing officer, beauty and wellbeing at Unilever. “Since 2023, Priya has had a successful tenure as president of beauty and wellbeing, one of Unilever’s fastest growing businesses,” the statement noted.

Story #2: With the July 9 deadline gone, India - US trade negotiations yet to be finalised (click here)

India and US have not yet concluded their negotiations as per the recent reports that July 9 is the end of the 90-day ‘pause’ that the US had enforced as a relief from their reciprocal tariffs.

However, there has been some progress in the current round - the most notable being that India is not a part of the list of countries to which the reciprocal tariffs are now enforced after the July 9 deadline. This does not mean that things are going to be this way forever, the relief has only been extended till August 1.

Here’s what we know so far -

1. The statements from both camps are not in the same tune yet, which means there are a lot of issues to iron out. Union Minister Piyush Goyal has said that they will not succumb to the pressure of a deadline to sign a free trade agreement (FTA) and will keep national interests first. However, on the other end, POTUS Donald Trump suggested that they are very close to making a deal with India.

2. Some reports suggest that the two countries might sign an interim deal, which will act as a basis for a more permanent, comprehensive deal in the future. Nothing is off the table yet.

3. A team of Indian delegates led by Special Secretary of Department of Commerce Rajesh Agarwal will travel to Washington soon to hopefully conclude the negotiations.

Among other issues, there are two main issues that has obstructed any deal from proceeding further - one from each side of the table.

The US wants India to open its gates for US food and dairy products to which, India has drawn a ‘red line’, meaning India is not ready to listen to or budge on the topic. The Indian government considers farming to be a very sensitive industry. We already have so many farmers across India who are not able to make ends meet and resorting to suicides. Based on several reports, an average of 10,000 farmers have committed suicide every year in the last 5 years. The government definitely does not want to add to the plight of the farmers by bringing competition from another source.

Then there’s another big monster that US wants India to accept. The Genetically modified foods.

It’s pretty straightforward that nature has given us everything our body needs from what grows from it. And its basic science that the food we eat eventually becomes a part of our body. Altering the DNA of our source of energy can have adverse long term effects on our body. I’m happy this point is non-negotiable for our government.

The drama doesn’t end here -

Both, India and US are fighting each other at the global stage at WTO in Geneva where US has challenged India’s dairy import certification requirements while India has challenged US’s tariffs on steel and aluminium.

India’s stance is that it wants a permanent lower rate of imports by the US (below 20%). We might cave in for other items like imports of wines, EVs, etc.

It is interesting that India has held a strong foot in the negotiations and is not succumbing to any threats, deadlines or bullying from the US.

Story #3: Life insurance policy sales drop by 10% in Q1 (click here)

This doesn’t really come as a surprise to us. When our Finance Minster had proposed new tax regime that did away with tax savings on insurance premiums and PPF investments, this was going to be an inevitable truth for India.

Agreed that people are old and mature enough to look for themselves and the government doesn’t always have to act as a parent to them, taking away their benefits abruptly meant people reacting the way they have.

Interestingly, LIC is the only company in the listed space that has bore the brunt of this with sales dropping by ~15%, while private players have experienced a drop of only 0.80%.

There was a clear shift noted from going to a public sector enterprise such as LIC to private players as the younger generation preferred lower premiums and quick service. This clearly shows that the younger population is well aware of what is available in the market and more importantly, why they have to buy insurance.

1. July 9: Remember the date as India - US Tariff Dispute (Trade deal) is now entering it’s final stages!

2. FIIs seem to be opening their arms (SRK pose) to Gravita India - a leading company in lead and aluminium recycling.

3. Is Gold Jewellery a Good Investment? Beware 30% Hidden Loss!

   ---

   The victims and the families of Pahalgam Terror attack and the crash of Air India’s London bound flight are still in our thoughts as we write this newsletter. It’s difficult to absorb such information and still lead our lives in a normal way.

Now, let’s look at how the markets performed this week:

Equity markets were absolutely flat this week. It’s a sort of cooling down period after the recent rally.

As from the next week onwards, Q1 results (April - May - June 2025) of companies will be released.

We see a mixed bag coming into play.

There’s hardly been a significant Capex announcements from large companies despite RBI making loans cheaper for them. In the Urban India (Metro cities + Tier I and II towns) - there is stagnation with regards to earning and spending money.

Rural India is where there is a pick up in terms of spending. It’s interesting as companies like Vishal Mega Mart who primarily operate in those areas are reporting good numbers.

Large IT companies, Banks and NBFCs will set the tone for the results. However, we don’t see too much happening in that space at the moment. Everyone is currently on a wait and watch mode till the time businesses get a sense of direction from the ongoing tariff dispute and war scenarios.

As Government pushes for more Capex, it’s hard to see Commodity cycle peaking out.

These are just some messy thoughts in our head at the moment. There’s no guarantee that our thesis will turn out right.

Story #1: July 9: Remember the date as India - US Tariff Dispute (Trade deal) is now entering it’s final stages! (click here)

US President Donald Trump seems to be missing his childhood days. Back when everything was so easy, one could play video games all day (in our times, not his), then go out and blame everyone for his under performance, straight away spread lies about brokering peace between countries, take on the biggest bully by first making him his ally and then biting him in the back, so on and so forth.

This is what we as distant observers are able to see.

Businesses and stock markets around the World are glued to X (formerly Twitter) about any announcement from Trump.

Funnily though, there is a strong claim (meme) that has appeared on social media about Trump taking the credit of changing the regime in Phulera (Panchayat - an Amazon Series we just love). Take a look.

image credit - x.com, it’s a meme.

Incase you haven’t watched the Season 4, we highly recommend you to do so. It’s not the spoiler, it’s the build up of the story that creates magic.

Back to Trump and Modi, their bonhomie and trade deal.

India has slowly started reducing some heavy tariffs on products imported on products from UK and US. At the same time, India has put a lot of Anti-Dumping Duties on Chinese products (it’s a fascinatingly long subject, so some other time).

In 2025 alone, India has shown willingness to reduce tariffs in the following areas as part of its ongoing trade negotiations, particularly with the United States:

1. Walnuts

2. Cranberries

3. Other fruits

4. Medical devices

5. Automobiles

6. Energy products (such as liquefied natural gas and oil)

So where’s the deadlock?

It’s Agriculture!

“The US has been pushing India to significantly open its domestic market by reducing tariffs on American farm goods like soybeans, wheat, corn, apples, ethanol, and dairy products, many of which are politically sensitive in India. Washington has also demanded easier market access for genetically modified (GM) crops, which New Delhi has long resisted due to health and regulatory concerns.

India, however, has refused to budge, citing the need to protect its small farmers and food security system, particularly the Minimum Support Price (MSP) regime that underpins rural stability and welfare.”

Trump seems to be in a mood to play UNO with India as we have studied and continue to study that Agriculture is the backbone of our economy.

As more and more children are getting educated, they are opting for service based jobs instead of working in the Agriculture sector. That’s why Indian media talks about someone topping their school, college or state and aiming for some dream job at a Fortune 500 company. Somehow that’s the definition of success!

Although if you zoom out a little, you realise that there are so many people still employed in Agriculture sector. A number that we simply take for granted.

Close to 21.49 crore of our population is employed in Agriculture.

Below is the breakup from Dubey & Chaturvedi’s recent work of India at work.

Agriculture’s importance can be assessed from it’s value added to our GDP numbers. In simple terms, just see how slowly and steadily the entire sector has been contributing to the Indian economy.

Skeptics tend to have an attitude of ‘so what’ with these things.

Because rational skeptics are always focussed on the future and they read a few blogs and listen to some media houses to arrive at their conclusion.

Hence, we always receive this statement from such people that ‘Agriculture’ is not the sector of tomorrow. It’s going to be AI, Machine Learning, LLM, etc - all these things we don’t even understand in the first place.

For them, here are a few numbers from the same report.

If you look at the first table closely, India still has a record 11.4 crore people in the employment system who are not literate, then comes another 10 crore who have barely studied till primary school.

That’s 21 crore of our population which is doing odd jobs and are treated as casual labour which can be dispensed off whenever not required.

Slowly, we are seeing a rise in people who have completed their 10th standard, secondary and graduates. (Quality of education is not the question here)

The change is real.

But we cannot dispose off those 21 crore people are reliant on odd jobs and agriculture in the name of a trade deal.

In our observation, Indian government is taking the correct stance in this whole thing.

Think about it.

In addition to agriculture, the US is also seeking

• Greater access for American dairy and processed food companies.

• Lower tariffs on electric vehicles, alcohol, and agro-biotech products.

• Reductions in non-tariff barriers, including product certification and labelling rules.

• Lower tariffs on soy oil, which India imports in large volumes.

Honestly, that’s crazy and shouldn’t be allowed.

Now, it’s down to the game of who blinks first.

India has an advantage of a trade surplus with US because of our services sector. But then, Trump really doesn’t care about it. His job is create ruckus in the Global system and showcase to his electorate on how powerful he is and how US can be the bad boy!

Story #2: FIIs seem to be opening their arms (SRK pose) to Gravita India - a leading company in lead and aluminium recycling.

source: screener.in, Indigenous Investors Research Desk

During the past 4 years, we have been reading about a constant Foreign Institutional Investors (FII) outflow. They have been selling their Indian stocks and putting money elsewhere.

Here’s a chart.

source: perplexity.ai, Indigenous Investors Research Desk

It’s been the Domestic Institutional Investors powered by the monthly SIP money that is pushing the market upwards to say the least.

So when FII is leaving out of Indian stocks and at the same time slowly adding their stake in a commodity - mineral recycling company, it deserves a closer look.

Since our investigation in India’s recycling sector and waste management sector is ongoing, there’s a fair chance that we might have not covered the entire ground. But in order to crystallise our thoughts, we are taking this bold attempt to write a few things.

Gravita India makes 88% of it’s revenue from lead recycling and the rest from aluminium and plastic products (as per company docs).

Lead is majorly used in batteries, medical imaging equipment, bullets, alloys, paints, plastic stabilisers, etc..

In a nutshell, it’s an important resource that shouldn’t be wasted away.

Plus, these critical minerals should be recycled as much as possible rather than digging the Earth or importing from China (as usual).

Indian Government is taking steps for the same.

Gravita at the moment is just a Rs 13,000 crore in market cap which is very small in nature. The company wants to venture into New recycling verticals in Rubber, Lithium, Steel & Paper. As a result, a proper Rs 600 crores of Capex plan has been put in place.

This is exciting stuff.

Recycling and Waste Management maybe a small pie for the FII at the moment but they are happy to tell us as India is a Consumption economy. So all of us (retail investors) will rush to buy Titan, Asian Paints, Nestle, HUL, ITC, etc which they are happy to sell.

At the same time, they are looking out for these companies where the waste will get processed and recycled or repurposed.

This is just the start for them and how silently they are buying small chunks without anyone having to notice the same.

This is exactly what a retail investor needs to be aware of.

Don’t buy what institutions are selling (along with paid media houses who support that nonsense). Always look at those sectors where the institutions are buying.

Come to think of it:

140 crore population that is consuming constantly has extremely poor waste management records.

Kavya of KK Create will go down as the finest content creators on YouTube in times to come.

Her video on India’s tallest dump site (click here) is not just a question to the authorities but to as civilians to wake up and initiate the change.

As per Wikipedia report, India generates 62 million tonnes (61,000,000 long tons; 68,000,000 short tons) of waste each year. About 43 million tonnes (70%) are collected, of which about 12 million tonnes are treated, and 31 million tonnes are dumped in landfill sites.

It’s an alarm for all of us to wake up!

FIIs have already understood it and are slowly putting money in various startups too that are covering the Waste Management issue (more details on it later). They have identified the sector that will make money for them over the next decade.

Hence, rather than blindly following cartoons on CNBC everyday, sit with your financial advisor and discuss the next big theme for India’s growth story. Because from the looks of it, it’s definitely not the ones that are being currently talked about.

Story #3: Is Gold Jewellery a Good Investment? Beware 30% Hidden Loss! (click here)

The article suggests that while gold jewellery is a meaningful and culturally significant asset, it is generally less efficient as a pure investment compared to gold bars, coins, or digital gold.

It is best viewed as a long-term investment combined with personal enjoyment rather than a purely financial instrument.

Here are a few points:

1. Tangible Asset with Dual Value: Gold jewellery combines intrinsic value with aesthetic and sentimental appeal, making it both an investment and a wearable asset. It is a physical asset that can be passed down generations.

2. Hedge Against Inflation: Gold jewellery tends to retain or appreciate in value during economic downturns or inflationary periods, protecting wealth.

3. Liquidity: It can be relatively liquid since it can be sold or pawned in emergencies, though resale prices often focus on gold content rather than craftsmanship.

4. Cultural and Emotional Significance: In India, gold jewellery holds strong cultural and emotional value, often linked to traditions, weddings, and festivals, adding to its desirability beyond pure investment.

5. Appreciation Potential: Over time, as gold prices rise, the value of gold jewellery generally appreciates, especially for high-purity pieces.

Drawbacks:

High Premiums and Making Charges: Jewellery includes costs for design, craftsmanship, and branding, which can reduce investment returns compared to bullion or ETFs.

Wear and Tear: Frequent use can cause physical damage, reducing weight and resale value.

Resale Challenges: Selling jewellery at a price reflecting its purchase value can be difficult, as buyers often discount making charges and focus on gold purity.

Not a Passive Income Source: Like other gold forms, jewellery does not generate income and profits depend solely on price appreciation.

Share

1. AU SFB stands to benefit as RBI tweaks this norm and frees up Rs 41,000 crores!

2. Abbot India doubles in last 3 years despite skeptics feel that it’s lost it’s competitive advantage

3. Vodafone Idea - wired in troubles, seeks more debt to stay relevant in India’s Telecom Market but should you invest your money in the stock?

The victims and the families of Pahalgam Terror attack and the crash of Air India’s London bound flight are still in our thoughts as we write this newsletter. It’s difficult to absorb such information and still lead our lives in a normal way.

Book Recommendation - The Good Indian Employee's Guide to Surviving a Lala Company by Rajiv Gupta

India is a land of family businesses.

The first generation, often referred to as the Patriarch starts a particular trading business or manufacturing unit. For decades, he has given his heart and soul to the business he has built. Chances are high that the Patriarch would have never really taken vacations or some weekend vacation trips while building his business.

In terms of time lines, these businesses would’ve been started around 1960s or 1970s which are now passed on to their second generation and some businesses are also slowly grooming their their generation who wishes to be a part of it.

If you are living in metro cities such as Mumbai, Bangalore, Delhi etc - then it’s a high chance that you will feel I’m referring to some age old custom. Because we people tend to have a sort of a false ego that since we have travelled a few countries in the World, we feel everything has changed.

And since, we have travelled the World and are educated with some professional certificates, we have completely forgotten the very social fabric of the rest of India works on.

Because we see how everyone is working for Google, Apple, EY, or any other MNC based out of USA. There are long and nonsensical conversations on how some children went to Canada, London and other cities are making more money than they would have sitting in India.

Because we just love ‘Abstract Thinking’.

Most people are just glorifying their children being so talented that they are making a name for themselves in foreign land while hiding their own lack of skills in building a business.

So what’s the common denominator?

Because Lala-ji (patriarch or second generation) didn’t take any initiative in professionalising their business. In simple words, change with times. So, it was always better to send the kids abroad while they enjoy their social lives here.

But as you move towards the non-metro part of India, yes there are kids who are studying abroad, but you will still see a lot of second generation or third generation working in their business.

They are trained to believe that this is their destiny and they have to take the empire forward. It’s like a code.

And yet, somehow the business that are being passed on - they don’t grow as much. Some of them shrink to basic survival, while some go extinct (like dinosaurs).

Why does it happen?

A business that is grown with so much blood and sweat suddenly vanishes like it was never there.

It comes down to a few things. But the most common ones are - lack of systems, governance structures and professionalisation of business that need to be competitive with changing times.

Another issue is succession planning for the first generation patriarchs was a little difficult. If they had 2 or more sons, then who will be the CEO was a huge question.

In non-metro parts of India, we’ve seen the business was handed over the to the eldest son, maybe because he had more experience or he was just lucky to be born first. While the younger siblings would always look to de-throne or break away into their own set of businesses.

Some smart Lala-ji’s would create different business streams for their sons. This ensures a timely account for capital allocation, business growth metrics and no unnecessary ego wars happening at home.

Another factor that used to play a very important role in succession planning was the closeness of children to their parents. There are cases where the eldest son is closer the father (the patriarch) but the younger one is closer to the mother. And if it comes to some sort of vote and mother wins, then the younger son becomes the de-facto owner of the business. As a result, the elder son has to yield down to the wishes.

Somehow employees have to bear the brunt.

Since the business family is busy fighting out the succession battle, not enough attention is given to the business or the employee’s own welfare or career advancements.

Not just that, Lala-ji’s are notorious for putting themselves in the position of god and feeling good about the fact that it’s their business skills that ensures their employees eat their meals that day. Otherwise, no one would touch these peasants with a 10 foot pole.

This rubbish still exists. Patriarchs and Lala-ji’s still want their employees to worship them with touch their feet everyday (mentally).

If you are a keen business observer, then you will also see how Lala-ji’s are always late to the meetings. They don’t start any meeting on time, they are busy in social arrangements or some dinners that they MUST be at.

Employees suffer from endless bootlickers in the office to corrupt colleagues who will plant any nonsense in the minds of these Lala-ji’s and as a result there’s a risk of a job loss. That’s why most of these setups don’t grow because the employees themselves don’t feel safe in the ecosystem that the Lala-ji creates.

There comes a day when Lala-ji realises that he is not God anymore. And that day, the business is shut, bankruptcy is declared and assets are sold off.

There are many such cases discussed in the book.

Rajiv Gupta, the author, is a veteran in this space. He has worked closely with the Ambani family during his time at Reliance Industries Ltd.

In a podcast with YouTuber Raj Shamani - Business Masterclass: Secret to Build a Profitable Business in India (click here), Rajiv talks about the execution masterclass of Mukesh Ambani and his prowess lies in attention to detail.

Recently, Rajiv appeared on another podcast with Ranveer Allahbadia titled Big Money Podcast - Step by Step Guide to Start a Business (click here), his insights are profound and gives a new way of thinking to both the patriarchs and the inheritors.

One key part of a successful family business is setting the right expectations and communicating it with them to the next generation.

Gone are the days where only boys would inherit, these days we see a lot of girls inheriting their father’s business and running the show successfully. Even if these girls are married or not, they continue to the run the show at home.

They are not just demanding an equal share, they simply assume that the parents will share their wealth equally and give them equal opportunities to advance in their careers. The cultural and social fabric is changing.

Millennials and Gen Z are not interested in setting up a family business either. They are not even thinking about setting up a business that will outlast them. The game has now slowly changed to Equity as a part of Wealth Creation.

And that is refreshing. But there are still major businesses that are in the Lala-ji format and this book becomes a guide to those who are surviving in such environments and for people like us who would like to stay away from investing in such companies and as a result create wealth.

Do read the book and write your thoughts to us.

Now, let’s look at how the markets performed this week:

A strong performance by the equity markets once the worry about Iran Israel war was over. There’s a high chance that even the trade war will be over by next month and things will be normal.

Story #1: AU SFB stands to benefit as RBI tweaks this norm and frees up Rs 41,000 crores!

The Reserve Bank of India (RBI) has recently revised the priority sector lending (PSL) requirements for Small Finance Banks (SFBs), reducing the target from 75% to 60% of their Adjusted Net Bank Credit (ANBC), effective from FY 2025-26. This change aims to recalibrate the regulatory framework for SFBs.

You can read the news by clicking this link.

Investors have cheered this!

To first understand the impact of this change on AU Small Finance Bank, first let’s understand how the RBI defines Priority Sector Lending (PSL).

The primary objective of PSL is to promote balanced and inclusive economic growth by channeling credit to sectors that support basic needs and development, but may not be adequately served by the conventional banking system.

Sectors Covered

1. Agriculture and Allied Activities

2. Micro, Small, and Medium Enterprises (MSMEs)

3. Export Credit

4. Education

5. Housing

6. Social Infrastructure

7. Renewable Energy

8. Weaker Sections and Others

There are also other filters where the Small Finance Banks are supposed to lend a specific percent of their loan book to certain sectors. But it’s not much relevant now.

Because when the RBI brought down the provision from 75% to 60%, effectively Rs 41,000 crores of liquidity was freed up. They can now be lent anyone outside the priority sectors.

This money can go for home loans, consumption loans or industry loans where the expectation of recovery is much better.

To understand this tweak, let’s first understand the Small Finance Banks of India.

source: Perplexity AI

AU SFB holds the key to this liquidity being unleashed for the sector. Already sitting at a solid loan book, decent Gross and net NPA numbers (in line with industry), the bank has got a solid push.

RBI is also considering to give Universal Bank licenses to the Small Finance Banks who have shown strong fundamentals.

As per our assessment, AU SFB sits at the very top of the RBI’s Universal Banking license pile.

With that the Bank will be unleashed to sit at the big boy’s table with HDFC Bank, ICICI Bank, Kotak Bank, etc. It will be a huge push of confidence.

With more liquidity comes more options to deploy them.

India is a credit starved economy. Yes, there are a lot of banks out there to service them but the paper work, banking staff that can hardly keep pace with changing regulations and outdated technology keep them from lending to those who really need it and are able to repay it.

AU SFB is a technologically sophisticated to handle such scenarios. Some industry experts even say that this is what HDFC Bank was in the early 2000s.

A breath of fresh air in the banking system.

Well, whether it remains the same or goes downhill like Bandhan Bank will depend on series of decisions that the management takes. We are outsiders need to keep doing our homework and keep a close check on our investments, if any.

Story #2: Abbot India doubles in last 3 years despite skeptics feel that it’s lost it’s competitive advantage

Back when the idea of Abbot India as an investment option hit us, we were tasked to answer a series of questions. Most of which were easy but there was 1 question that was psychologically hard to answer.

Abbot India was trading around 16,000 per share at that time.

So if you are thinking of putting some Rs 1 lakh, then you will get upto 6 or 7 shares, give and take a few thousands.

Now, the question is not whether the Rs 1 lakh will grow or Abbot India will grow.

The question was whether Rs 16,000 could become Rs 32,000?

Since, we have learnt investing from Warren Buffet and Charlie Munger - so for us business performance matters more than what the entire market thinks at that point.

And fundamentals were always strong!

So we invested and didn’t quite give convincing answers to those who were raising the price question to us. All we could tell them was if Rs 16,000 cannot become Rs 30,000 then it will also not become Rs 100 quickly.

A safe bet.

And boy it performed!

Currently, there are too many speculations about the reason why the stock price has gone up so much. Now, let’s leave that for traders. They do a much better job at understanding the finer nuances of the news cycle then we can.

Here’s what happened after we invested.

source: Perplexity AI

Revenue went up slowly, but Profits jumped. This is on the back of a good operating profit margin and net profit margin. In simple words, the company showed high efficiency.

Return on Capital Employed for Abbot India is currently at 46%. (huge!)

When the business become efficient and needs less cash to run the same operations, then that cash can be used for Capex and distributed as dividends to shareholders.

Abbot has done both. It’s a strong display of Corporate Governance.

So if you are like us who don’t understand complex names of medicines but understand the potential of the sector, then sometimes having simple quant systems in place helps you generate investment returns.

The Mindset Shift!

You don’t need to worry about the stock price being Rs 100 or Rs 16,000. All you need to think about the company’s ability to grow and their willingness to communicate this growth with shareholders.

In the nature of accounting, bonus and split - can bring the price of the stock down and increase number of share available to buy or sell. But that is company’s decision and not yours. So leave it to them.

Story #3: Vodafone Idea - wired in troubles, seeks more debt to stay relevant in India’s Telecom Market but should you invest your money in the stock?

Vodafone Idea’s story is a blend of resilience and adversity. Despite being one of the largest telecom operators by subscriber base, it faces existential risks due to its weak financials and intense competition.

The government’s intervention, through debt-to-equity conversion and continued support, makes its future uniquely dependent on both operational turnaround and regulatory goodwill.

Vodafone is looking to borrow another $ 2.9 billion to upgrade it’s network to 5G and stay relevant in the game. (click here)

Vodafone entered India with a lot of promises and hopes back in 2007.

India was a country which was slowly adopting mobile phones as a medium of communication. Landline was the name of the game back in the day.

So much has changed since then.

But the journey of Vodafone has been extremely tough. Every time, the company was supposed to gain market share, some or the other controversy would hold them back.

This is what happened!

But by 2020, Jio had already entered the picture offering freebies like how different politicians offer just before elections.

Mukesh bhai led Jio made sure that voice calls were completely free and he was ready with 5G while Vodafone was busy fighting India’s tax authorities.

And this meant that the superstar was now an extra on the Telecom’s theatre set.

Suddenly, the rules had changed. There was Covid.

Tax authorities who had been fighting tooth and nail, now found Adjusted Gross Revenue (AGR) as it’s weapon against the company.

So in 2021, India’s tax authorities miraculously find a new leak.

The Supreme Court of India upheld the government’s definition of AGR, which includes all revenues (not just telecom services) for calculating license fees and spectrum charges.

This resulted in massive retrospective dues for telecom companies, with Vodafone Idea being one of the most affected.

Here’s the summary!

Another shocker is the shareholding pattern. Take a look.

Government of India now owns 49% of the company.

So the tax that is still left to be collected, will somehow be collected. Sooner or later.

Achhe din aayenge!

But what about a common shareholder?

Well, it’s a tricky call. Because it’s not everyday that a reputed multi national company gets treated like a third class citizen in India.

That’s why most multi national companies are happy with just selling their products in India rather than manufacture here.

Anyone who thinks that just because the stock price is Rs 7 at the moment and can go up, needs to think this angle through.

1. Judicial Overreach & Insolvency & Bankruptcy Code over-ruled? - Supreme Court’s Bhushan Steel Ruling

2. Hunger Inc: Empire of Taste

3. Different Kinds of Smart - Morgan Housel

The victims and the families of Pahalgam Terror attack and the crash of Air India’s London bound flight are still in our thoughts as we write this newsletter. It’s difficult to absorb such information and still lead our lives in a normal way.

Year 2025 then decided to throw another surprise in the nature of Israel - Iran conflict. And this too seems like a war that will stretch just like Russia - Ukraine one.

These wars have a direct cost on India.

Crude Oil !!

India imports about 85% of its crude oil, making it extremely sensitive to global price fluctuations. Every $10 per barrel increase in crude prices widens the current account deficit by approximately $14–15 billion (about 0.4% of GDP).

Higher crude prices result in increased cost of production and transportation. As per Economists, a 10% rise in crude prices can push the wholesale price index (WPI) up by about 0.9% and the consumer price index (CPI) by 40–60 basis points.

Rupee too then depreciates against the mighty dollar. We can argue that Russia will offer us cheap oil, but those discounts always come at a cost to maintaining an independent opinion in Geopolitics.

In the short term, getting cheap oil from Russia can be a masterstroke but for a country like India that has to depend on the rest of the world to feed its ever growing population becomes a huge liability.

Here’s how Crude has moved since the war broke out.

Petrol prices in Mumbai at the moment are still the same but we can expect them to go up!

It hardly took a few days to jump from $62 to $74 per barrel. And like we did mention in our previous newsletter that some analysts are predicting a $100 - $150 per barrel. You don’t need to calculate the impact that it can have our economy, we will be just screwed for no fault of our own.

Here are a few sectors that are directly impacted when the crude oil prices go up!

• Oil Marketing Companies (OMCs): Companies like HPCL, BPCL, and Indian Oil face margin pressures as retail fuel prices may not always be adjusted immediately to reflect higher crude costs.

• Aviation: Aviation turbine fuel (ATF) accounts for over one-third of airlines’ operating costs. Higher crude prices directly increase fuel bills, pressuring profits and potentially leading to higher airfares.

• Paints: Paint manufacturers use crude derivatives for nearly 50% of their raw material costs. Rising crude prices force companies to increase prices, potentially hurting demand.

• Chemicals, Petrochemicals, and Fertilizers: These sectors rely heavily on crude derivatives as feedstock. Higher input costs can reduce profitability and, in the case of fertilizers, increase the government’s subsidy burden.

• Automobiles: Input costs rise due to more expensive plastics, rubber, and composites. However, higher fuel prices may boost the relative appeal of electric vehicles (EVs).

• Logistics and Transport: Higher fuel costs increase the cost of transporting goods and people, raising prices across the economy.

If your portfolio is geared towards these sectors, we request you to have it re-assessed for a second opinion.

Prices tend to crash much faster when the overall mood is dampened in a particular sector. Seeing these price crashes in strong stocks often take a toll on retail investors because they aren’t used to seeing such anomalies in the markets.

And it’s during these times, our favorite financial influencers are either nowhere to be seen or they have suddenly changed the course of their investment philosophy.

Either ways, it’s hard to be an investor when the chips are down.

Story #1: Judicial Overreach & Insolvency & Bankruptcy Code over-ruled? - Supreme Court’s Bhushan Steel Ruling (click here)

Rajeswari Sengputa has no filters to call a spade, a spade.

A rare quality we find in Economists these days.

“In summary, the Supreme Court’s ruling in the Bhushan Power and Steel Ltd “BPSL” case exposes deep flaws in the IBC’s institutional framework and raises concerns about judicial overreach. To sustain financial sector reforms and attract long-term investment, policymakers must urgently address these issues. Restoring confidence in the IBC requires institutional as well as judicial reforms. Only by building competent, accountable institutions can the IBC’s full potential be realised and the interests of creditors, investors, and the broader economy protected.”

Insolvency and Bankruptcy Code “IBC” was created to introduce a strict timeline (originally 180 days, extendable to 330 days) for insolvency resolution, ensuring that businesses could be revived or wound up quickly, thereby preserving economic value.

The focus was to maximise the value of assets for creditors such as banks and credit institutions that had lent to the company. A brilliant move that could also save the economic impact on shareholders if some other company would take over it’s assets.

JSW Steel (market cap of Rs 2.5 lakh crores approx) took over the assets of Bhushan Power and Steel under the IBC framework. All the creditors of the BPSL were paid following its liquidation.

JSW Steel now had the head office + branch network + steel plants of BPSL to expand in different directions which they started working on.

Honestly, in such cases where liquidation and takeover has happened there are some aggrieved stakeholders who are left with a bad taste or want some more. So they approach Supreme Court (as if the highest court of India isn’t already over-burdened enough).

Now, Supreme Court found some lapses which could’ve been dealt with some punishments, fines, etc. But somehow like a strict school teacher (who ordered biryani for Ajmal Kasab) overruled the previous decision. This put the entire ecosystem in shock.

If Supreme Court is the supreme authority, then what’s the whole point of having IBC?

A question that will haunt India’s business ecosystem for a long time to come.

Story #2: Hunger Inc: Empire of Taste

Rahul Sanghi is a fantastic storyteller. There’s a way to read his work - a cup of coffee, some chips and a notepad.

If you as a reader want to have a crash course on restaurants and its passionate founders, then this a blog for you. Trust me, this is a complete book in itself.

In our limited understanding, running a restaurant is like running a marathon but in sprint mode. You have to be super fast, adjust to your surroundings and changing preferences from your customers all the time.

For the rest of us, who like to live a Warren Buffet style of life - owning a piece of equity is the closest we can get to running it.

Rahul starts with sharing the personalities of the founders giving us a deeper look into their minds and hearts. Coming from different households they are bound by their love for food. And that keeps them going.

Along the way, we are offered a chance to read some more books on the subject. One recommendation by the author - Unreasonable Hospitality tops my list of lifetime reading. It’s like if you haven’t read this book, you’ve missed living a life.

And then the blog goes on!

Honestly, it’s a fine piece of writing and a wealth of knowledge that is only transferred when you read it. My opinion might just mellow it down, hence, it’s best to refrain from writing anything further.

Story #3: Different Kinds of Smart - Morgan Housel

Morgan may not have been born in India, but is the brand ambassador for the song ‘Sar jo tera chakaraye, ya dil duba jaaye, aaja pyare paas hamare, khae ghabraye!’

Whenever we read his work, it seems like clarity presents itself to us in the middle of the storm.

Key types of “smarts”:

• Interdisciplinary Thinking: Recognizing that your field is just one piece of a much larger puzzle. Being able to connect ideas across disciplines—like economics, psychology, and sociology—gives a broader and more practical understanding of how the world works.

• Balanced Confidence and Paranoia: Having the confidence to make bold moves, but also a healthy paranoia that keeps survival and risk management at the forefront. This balance helps avoid catastrophic mistakes.

• Storytelling Ability: Understanding that facts alone don’t persuade people; stories do. Good communicators and storytellers have more influence than those who rely solely on the strength of their ideas.

• Humility and Empathy: Recognizing the limits of your own experience and perspective, and making an effort to listen and empathize with others who have different backgrounds and ways of thinking.

• Delayed Gratification: The ability to forgo immediate rewards for greater long-term gains, often by using strategic distraction rather than sheer willpower.

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1. China flexes it’s Rare Earth muscles and India’s Auto sector bleeds

2. RBI cuts repo rate by 50 bps; looks to infuse liquidity in the system

3. Very Bad Advice by Morgan Housel

It is very hard for us to get over the pain of Pahelgam Terror attack on innocent Indian civilians by Pakistani terror groups and somehow we were coping with Operation Sindoor. And on Thursday - June 12, 2025, there was one more incident that really has put us into a deeper pain of sorts.

Engines of a London bound Air India flight malfunctioned and in less than 120 seconds, we lost more than 250 innocent lives.

Khan Sir explains his initial understanding in this youtube video Ahmedabad Air India Plane Crash (click here) to watch it.

He rules out a bird collision. So that leaves us with aircraft stalling or engine failure or both. And that question will be answered once the black box is recovered from the plane and an extensive analysis is done on it.

Till then, it’s going to be hard to move on from such news.

There is one thing that we as Indians need to culturally change.

It’s our attitude towards ‘Maintenance of a Machine!’ or ‘Maintenance Capex!’

We can have 100 different theories about what must have gone wrong and yet we will struggle to accept the fact that most our airplanes are in a bad condition.

It’s that ‘chalta hai toh chalne do’ attitude that just holds us back. Prevention is better than cure - is an alien concept. Why fix it when it’s not broken!

We can only imagine the pain of those families who would be reeling through such a loss at the moment. Losing your loved ones is a pain that stays with you forever.

When we read through various transcripts of companies, we find this unusual that managements that tend to invest money into maintenance capex aren’t seen very shareholder friendly. They are always viewed like - uh! yeah - you need to do that, nothing new, thank you!

All that analysts at institutional firms are geared toward thinking that how much capacity they are actually expanding.

Take the case of Blinkit for instance. All that you need to do is just check their dark stores and you will realise that there is no standard of maintenance which we expect from our local kirana shop.

If the management declares that they will raise the standards and cleanliness of their existing dark stores, no analyst will even give them their 1 second.

But if they talk about adding another 200 stores at a lightening pace, then every analyst will open their religious text - valuation sheets in Excel and put some number that has come to them through a divine intervention.

And now - we have a number that the stock price can reach to. So BUY BUY BYE!

Recently, we were going through a healthcare company where the management allocated a significant chunk of their capital towards maintenance capex. Next day, the valuations were brought down and analysts said that the management has lost it’s vision and hunger.

There are many such cases. It boils our blood when we such nonsense being driven into the minds of retail investors.

It’s just ingrained into our systems.

If you are in Mumbai, you will see a lot of construction of new roads, metros, etc happening all year long. It seems like the city is constantly in Work In Progress mode.

And yet, building of new roads comes at the cost of maintaining our existing roads. It just takes 1 full day of rain to bring the entire BMC’s ego in check. And yet, our voices constantly go unheard. Because language supremacy seem to be somehow more important than lives of people.

It’s time we fix things and not wait for them to break!

Now, let’s look at how the markets performed this week:

This week seemed mired with bad news for the equity markets. US China trade talks, US India trade talks and it’s uncertainties, Air India plane crash in Ahmedabad and Israel-Iran war.

Markets in such a time tend to become bearish or remain flat. At the moment, the prices have remained flat but if these conflicts continue there is a chance that we will see some correction coming in.

Gold will move up in such times.

Crude Oil prices might be a bit volatile incase the Iran - Israel conflicts deepen so that could cause some concern. Because wars are just fought on the ground of 2 countries, but there’s an entire global ecosystem behind it. If this escalates, then we should embrace ourselves for possibly paying a little more for our petrol or diesel.

India will take a neutral stand in this War. Because we have our own neighbours to take care of at the moment and a population of 146 crores to feed. Unnecessary jumping into Global issues will hurt us in the long run.

Pakistan to the contrary will stand with Iran as it imports 30% of its fuel from Iran illegally through the Balochistan route. Plus, it’s important for Pakistan to keep showing support to get more loans from the World.

Cost of such loans for Pakistan: The country’s extreme poverty rate has risen sharply from 4.9% to 16.5%, these people are earning less than $3 per day, that’s around Rs 250 which is a cost of Paneer Tikka Masala in Mumbai.

What’s shocking is that Pakistan’s 44.7% of population lives on less than $4.20 per day, thats around Rs 360 per day. That’s Paneer Tikka Masala plus 2 Butter Tandoori Rotis.

So yes, don’t dwell your precious time on wondering whether India should support Israel or not when Pakistan is supporting Iran.

Let them worry about their problems, we have a lot to deal with ours.

Story #1: China flexes it’s Rare Earth muscles and India’s Auto sector bleeds (click here)

If you’ve been an active shareholder in the last 10 years, then you have heard all sort of narratives to explain why Indian markets will give outsized returns over the next 100 years. Most of these narratives, just don’t make any sense.

One such narrative is India’s ability to compete with China. Some analysts take it one notch up by saying that India is superior to China in every way, it’s the pursuit of wrong policies by our leadership that we tend to lag behind.

We are all hopeful and tend to get attracted to powerful storytellers. Pied Piper wasn’t just about rats, humans too feel the same way.

We love the glorification of something that cannot happen. But then there is a multi-billion dollar Positivity industry whose only objective is to make you delusional.

We are delusional because we want to achieve what the West and China has without spending on our education, healthcare and basic infrastructure facilites that tends to improve economic output in the long run. But since our national elections happen every 5 years, every government emphasises on short term glory by donating money to the 80 crore Indian voters. The rest are simply struggling to find some sensible use of their income tax.

Well, at the moment - let’s focus on how China managed to gut India’s automakers.

For that let’s first understand - What are rare earth magnets?

Rare earth magnets are very strong magnets.

They are much stronger than regular magnets you might see on a fridge or in toys.

These special magnets are made from a mix of certain metals called “rare earth” metals, but don’t worry—they’re not really rare like a treasure; that’s just their name.

Why are they special?

Rare earth magnets can stick to things really, really well and can pull on other magnets or metal things from farther away than other magnets can. That’s why they are used in things like electric vehicles, defence equipments, aircrafts and even big machines that make electricity.

And who controls this?

Of course, It’s China with 90% of global processing capacity and roughly 70% of rare earth metal mining. Next in line are USA and Australia.

Here’s a simple video by FT on why China's control of rare earths matters (click here)

Now, what happened between China and India in this regard?

In April 2024, China introduced strict export controls on seven key rare earth elements and the magnets made from them. Now, companies need special export permits, and China tightly monitors who gets these materials and what they are used for.

Indian auto makers have applied for import approvals, but China is not granting them quickly. Executives from Indian companies are waiting for meetings with Chinese authorities, but so far, no approvals have been given.

China has been smart enough to not break any trade treaty rules. They just added a layer of bureaucracy that will potentially delay, and even disrupt any country they want. Just like the Indian government did by introducing BIS regulations. That’s China flexing its muscles and giving Indian government a taste of its own medicine.

India’s auto makers try to ramp up their EV production, they have only about 4–6 weeks’ worth of rare earth magnet inventory. If new supplies don’t arrive soon, production of EVs, hybrids, and even some conventional vehicles could be delayed or reduced starting mid-July 2025.

Maruti has already scaled down it’s EV number. Hyundai sounds confident of managing their inventory through the year due to its parent company based in South Korea and can take the advantage of the same.

M&M and Tata Motors are yet to give a sufficient explanation. They are at the moment hinting at not using these rare earth magnets into their EVs from now and are already testing some cars on it. More details awaited.

Story #2: RBI cuts repo rate by 50 bps; looks to infuse liquidity in the system (click here)

We tend to follow RBI’s Bi-Monthly Monetary policy with a lot of passion.

We perceive RBI to be a capital allocator to the country.

Think about it. The central bank looks at massive amount of data (domestic + global) and then decides how much money is enough to be circulated in the country.

That’s a tough job!

And yet, we are never let down. There’s never been a mistake of excessive printing of currency like we saw in Zimbabwe and other countries where a lack of understanding of inflation and money, put the entire country at risk.

There are many such episodes even from our neighbouring countries where their Central Bank policies are a matter of laughter stock. We will get to it some other day. Right now, let’s focus on what RBI has in store for us.

Governor gives us a strong understanding of economics and why India has the potential to grow at reasonable levels.

'“In this global milieu, the Indian economy presents a picture of strength, stability, and opportunity.

First, strength comes from the strong balance sheets of the five major sectors - corporates, banks, households, government, and the external sector.

Second, there is stability on all three fronts – price, financial, and political – providing policy and economic certainty in this dynamically evolving global economic order.

Third, the Indian economy offers immense opportunities to investors through 3Ds – demography, digitalisation and domestic demand.

This 5x3x3 matrix of fundamentals provides the necessary core strength to cushion the Indian economy against global spillovers and propel it to grow at a faster pace.”

RBI Governor

We do see India Inc’s balance sheet strengthening, Banks are flushed with liquidity, Households are slowly fulfilling their ambitions by consuming high end products, while the Government and Exports are supporting them.

Inflation is slowly coming in control as prices of vegetables are easing out. There’s enough rice and wheat in stock (click here).

It’s not surprising to us that Rural India is taking a lead in the recent consumption drive. They always had the potential. It was the access to such products that was an issue. With technology and infrastructure, that is slowly being solved.

As vegetable prices cool down, we will see more disposable income in the hands of rural India and they will spend on fulfilling their luxuries. Btw, the Sarpanch of my village owns a BMW 320.

So yeah.

However, RBI isn’t delusional here.

The central bank understands the risks of infusing liquidity in the system so quickly. That’s why they have changed their stance to neutral from accommodative. Indicating that the liquidity can be sucked out of the system if things don’t go according to their estimates. Government too needs to step up with a supportive policy ecosystem.

Governor did highlight about the stress in micro-finance segment at the moment. As a result, there are directives to strengthen their underwriting practices (don’t give loan because you know them, run the numbers first) and stepping up their collection efforts (only if the courts don’t interfere on human rights ground) to avoid any excessive build up of risks (loans going bad, no repayment).

Story #3: Very Bad Advice by Morgan Housel (click here)

Morgan explains that while it can be hard to know what will bring joy, it’s often easy to spot what will bring misery. He is inspired by Charlie Munger’s (our hero as well) practical advice to avoid obvious pitfalls, suggests that instead of just trying to get ahead, it’s helpful to focus on not falling behind by avoiding bad choices.

Key examples of “very bad advice” include:

1. Letting your expectations grow faster than your income

2. Envying others’ success without knowing their full story

3. Pursuing status at the expense of independence

4. Equating net worth with self-worth

5. Choosing who to trust based on follower count

6. Assuming more money will solve all your problems

The main idea is that by focusing on avoiding bad decisions and behaviours, you can prevent a lot of misery and set yourself up for a better life.

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