Weekend reading links

1. Thanks to inflation global debt burdens have been declining, falling by 27 percentage points between early 2021 and end of 2023. 

2. Rent controls may do more harm than good, except in controlled apartments.

And Spain is a good illustration that immigration is adversely impacting the housing market.

3. Excellent article on ASML, 42-year old, Veldhoven-based, Dutch maker of the $400 million extreme ultraviolet (EUV) lithography machines. 

The size of a double-decker bus, the machine prints circuits on to silicon wafers by firing light generated from 60,000 droplets of molten tin per second at them, using mirrors, lasers and short-wave light in a kind of vacuum-sealed nano-photocopier... ASML’s supply chain is something else. Where a typical industrial product might have a few dozen suppliers, an ASML EUV has more than 100,000 parts provided by 200 principal suppliers and 2,000 companies overall... Rather than trying to make everything itself, ASML outsources to the best manufacturer of each component — Zeiss for optics, Trumpf for lasers, VDL for mechatronics.

4. BigTech AI borrowings have fragmented the US debt market into two parts - AI-borrowing and the rest - and there is a growing risk that the cost of capital for everyone will rise as AI borrowings rise.

The scale of the borrowing will have its impact in squeezing out the rest of the economy and raising cost of capital for everyone. And it is going global.

In June, Amazon sold C$14bn ($10bn) of debt, smashing the Canadian currency’s previous record of C$8.5bn set by Alphabet just a few weeks earlier... Last month Alphabet issued a record A$5.5bn ($3.9bn) bond in Australia, more than twice as large as the previous biggest. The group also holds the record for the largest Swiss franc bond issue, having raised SFr3.1bn ($3.7bn) there in February. Amazon’s SFr2.8bn offering in May is the second-largest... Alphabet sold £5.5bn worth of sterling bonds in February, part of a $31.5bn package that included a rare 100-year £1bn bond that some say rekindled interest in long-maturity sterling debt. Amazon also raised £4.25bn earlier this month, its first-ever sterling issue.

What complicates matters is that the surge in AI borrowings come precisely at a time when government borrowings are also rising and are competing with each other, putting pressure on bond yields. 

5. India equity market facts of the week.

Both the Nifty and the Sensex... have ended in the red for eight straight weeks, their longest losing streak in 25 years. In the first nine months of 2026, foreign portfolio investors (FPIs) have pulled out at least ₹3 trillion from Indian equities, surpassing all annual outflow records.

6. Excellent chronicle by MS Sahoo of the emergence of India's regulatory architecture since 1991.

7. African credit ratings fact of the week.

Of an estimated $4tn regional capital base, less than a quarter is covered by credit ratings, according to the African Union. At the end of 2025, it said, the continent had fewer than 4,000 ratings, compared with 823,000 in the EU and more than 2mn in the US.

8. John Mearsheimer describes the Iran war the "mother of all strategic blunders".

Iran is number one in my opinion, because 1) we went into that war based on the false claim that Iran was on the verge of acquiring a nuclear weapon; 2) we had a theory of victory — air power alone would produce regime change — that has never worked and was not going to work this time; 3) we had no contingency plan for dealing with the likelihood that Iran would close the Strait of Hormuz; 4) we failed to achieve any of our four principal objectives — regime change, ending Iran’s nuclear enrichment capability, ending Iran’s long-range missile capability, and ending Iran’s support for Hamas, Hezbollah, and the Houthis; 5) the Strait was closed, which has already done significant damage to the international economy and could do much more — remember President Trump worries about following in Herbert Hoover’s footsteps; 6) we seriously undermined our carefully crafted alliance structure in the Gulf; 7) virtually all of our bases in the region have either been badly damaged or destroyed, to the point where we have moved most of our military assets out of the Gulf region and will probably not be able to return; 8) we have run down our stocks of key weapons to the point where we have weakened our deterrent postures in East Asia, Europe, and even the Western Hemisphere; 9) we have done enormous damage to our reputation as a reliable and wise ally; 10) we have markedly improved Iran’s strategic position in the Gulf region; and 11) there does not appear to be much chance — perhaps no chance — that we will get a nuclear deal of any sort with Iran, which was once considered of the utmost importance. In fact, there is a reasonable chance Iran will acquire nuclear weapons. President Trump has certainly given Iranian leaders — and other leaders of non-nuclear states around the world — a powerful incentive to acquire a nuclear deterrent.

9. Martin Wolf points to why the Iran war did not disrupt the oil markets and world economy as much as expected, with real oil prices still only around the long-term average. 

Johannes Urpelainen of the Johns Hopkins School of Advanced International Studies notes that: “First, the energy transition has reduced the global economy’s dependence on oil. Second, supply chains have proven resilient and adaptive. Third, producers outside the Middle East have acted fast to produce more oil and natural gas. Finally, drawdowns of global oil inventories have filled the remaining gap.” Flexibility is notably true of the Gulf. As former diplomat Mohammed Elsoukkary writes: “by the end of September preliminary estimates placed regional crude exports at approximately 16.3 million barrels per day, compared with 19.5 million in February, including roughly 9.7 million moving through Hormuz.”

Interestingly, the world entered the War with record inventories, accumulated especially in 2025.

10. French bond yields are higher than Italy's.

Not only does it now cost France more to borrow than it does Italy and Greece; a rising number of big French companies enjoy lower market interest rates than does the French state. Of all the G7 nations, it has suffered most from the debt sell-off triggered by the Iran war... France’s debt has reached €3.5tn, at nearly 120 per cent of GDP, far above the Eurozone average. Servicing costs have climbed fast to become the state’s single biggest expenditure ahead of education or defence. In just a month the additional interest rate that France pays to borrow over ultra-safe German debt — a key barometer of investor concern — has surged by almost two-thirds to around 1.4 percentage points on 10-year debt, heading towards the heights charted during the Eurozone debt crisis... A series of ratings downgrades has helped push up the country’s borrowing costs, which passed Greece’s in late 2024 and Italy’s last year. Investors now label France the “new periphery”... Despite the government’s tax-raising powers, its borrowing costs now exceed those of big French multinationals such as LVMH, the luxury group, and Sanofi, the pharmaceutical company. According to Goldman Sachs, more than a quarter of investment-grade French companies had a lower yield on their bonds than comparable government debt as of the end of September...

Increasing taxes to deal with the rising cost of debt servicing could also be perilous. At 44 per cent of GDP, the tax burden is already among the world’s highest; the average in the OECD club of rich countries is 34 per cent. Almost a quarter of public spending is gobbled up by pensions. French retirees leave the workforce earlier and receive relatively generous benefits by OECD standards. Attempts to push back the retirement age trigger angry protests.

11. US Treasury bonds are now threatening to hit 6% for the first time since the turn of the millennium. 

Borrowing costs for companies with the lowest credit ratings hit their highest level since May 2020 this month at 17 per cent, driven by the rise in Treasury yields to multiyear highs and by investors demanding more compensation for lending to such businesses. The risk premium for companies rated triple C or lower has risen to 12 percentage points, the biggest since 2022. Analysts said companies with floating-rate loans, and those needing to refinance debt in the coming months, were most at risk from the government bond sell-off, which last week pushed the yield on the 10-year Treasury note to its highest since 2002... But a further rise in Treasury yields could lead to broader pain across credit markets, analysts say. When it comes time to refinance existing debt, higher rates risk jarring the many companies that took on debt when interest rates were at rock-bottom levels in the early 2020s. Moody’s estimated last year that a record $1.45tn of US investment-grade corporate debt would come due between 2026 and 2030. Rising rates will put pressure on businesses to increase profits at a similar pace to rising borrowing costs.

12.  S&P quarterly earnings growth to remain above 25% for more than three quarters in a row. 

13. Ethnic cleansing in West Bank and East Jerusalem now. 

14. Interesting analysis of Adani Group's acquisitions through the NCLT process.

Since 2018, Adani Group, its linked entities and consortiums have participated in bids to acquire 26** distressed companies through India’s bankruptcy process. It has won 16 of them, with one case ongoing, though the latest decision went in Adani’s favour. This is a 61.5 percent success rate – meaning it won nearly three out of every five bids. While 14 of these 16 acquisitions came through the Corporate Insolvency Resolution Process (CIRP) to revive distressed business, the other two came through liquidation aimed at winding up operations... Across the 16 Adani acquisitions where tribunal orders disclose both admitted claims and recovery, creditors were owed approximately Rs 1.31 lakh crore and recovered only about Rs 33,000 crore – just 25.4 percent of the total. The loss was estimated to be over 97,700 crore, making the haircut around 74.6 percent. That is slightly higher than the national average of 69.4 percent.

Emerging industrial policy opportunity in batteries

It is well known that the convergence of renewable energy and battery storage would have transformational impacts on electricity markets. It overcomes the intermittancy problem that bedevils renewable generation. However, the high battery costs have been a problem. 

But two recent news articles highlight why that may be a thing of the past. One, for the first time, battery storage costs have fallen below thermal. Estimates by think tank Ember suggests that the cost of battery packs used in grid-scale storage systems fell by 45 per cent last year alone.

This trend has been expedited by the geopolitical convulsions of recent times, with the surging demand from data centres and the oil and natural gas supply squeeze due to Iran war turbocharging it. In 2026, 40 per cent more large-scale batteries are estimated to be installed than in 2025. 

Second, this convergence is being reflected in tenders being called in India to procure battery power.

Solar Energy Corporation of India (SECI) ran an auction to buy electricity capacity where they (SECI) demanded the availability of a thermal generator. A bidder who plans to use solar or wind is then forced to load up with the batteries required, to charge in the day, so as to deliver thermal-style availability. This auction discovered a price of ₹5.25 per kWh, guaranteed for 25 years. It is hard to identify a single comparable price for coal thermal in India because coal-extraction rights are given by the state in non-market ways. But if we look at recent new coal-power contracts in India, they are priced at ₹5.38-6.30 a unit. The SECI-discovered thermal-mimicking price for renewable power is now 10 per cent cheaper than that for new coal.

However, this convergence is accompanied by the now common concern about dependency on China.

Chinese producers account for 95 per cent of large-scale storage batteries, says Benchmark Mineral Intelligence. The sector’s rapid growth is strengthening China’s position as the dominant force in low-carbon energy, compounding opportunities for Chinese companies in adjacent markets such as wind and solar generation equipment… The seeds of China’s battery storage boom were sown in the years after Xi Jinping took power in 2012, with his pledge to build an “ecological civilisation”.

An industry in China that emerged from China’s industrial policy efforts to support battery production for EVs is now shifting towards grid storage. 

By 2021, it had become clear to the Chinese state that a vast amount of renewable power was being wasted, with solar and wind plants often generating far more electricity than the grid could absorb. So it launched a strategic push to deploy battery storage on the grid at large scale. Across much of the country, developers were required to build or commission large-scale storage as a condition of approval for new wind and solar plants. Again CATL has been at the forefront of this effort. Its fastest-growing business line today is the production of cells for large-scale energy storage systems. The company accounted for 22 per cent of cell sales for these systems globally in the first half of the year, making it the market leader in China and abroad. As a result of the state’s drive, China’s battery storage capacity expanded from 2.4 gigawatts in 2020 to more than 140GW at the end of last year, according to the Energy Institute, an industry membership body. In the first half of this year, coal’s share of Chinese power generation fell below 50 per cent for the first time ever. Exports of China’s large-scale battery technology have also surged. Researchers at BloombergNEF estimate that new battery storage capacity of 84.6GW will be added outside China this year — 65 per cent higher than last year.

Understandably, the Western governments have been taking action to reduce the dependence on China. 

In August, Trump authorised the energy department to block Chinese-linked battery storage equipment from the US grid on national security grounds. Washington has also revised the rules around tax credits for battery storage, in effect limiting the amount of Chinese equipment American companies can use. Some US officials say that Chinese-made storage equipment could potentially contain chips enabling it to be controlled or switched off remotely. Similar worries have emerged in the EU, where the authorities have moved to restrict public funding for storage projects using certain key components from “high-risk” countries including China… The US crackdown will force a growing reliance on kit made by alternative suppliers such as South Korea’s Samsung SDI and LG Energy Solution, whose storage batteries are significantly more expensive.

Buoyed by the success of the SECI auction in August that secured 1 GW of solar and storage capacity, the Government of India plans to emulate China and drive battery storage.

Chinese-made batteries are now being deployed en masse in the country, which in the first half of this year added seven times as much new power storage as it had in total at the end of 2025, according to energy research company Mercom India. Much of the rise comes from a single huge solar and storage project built by the Adani Group... The government is now planning regulation that would require storage to be installed alongside new solar and wind power plants — similar to the rules that drove China’s storage lift-off. Climate advocates hope this will reduce the country’s heavy reliance on coal, the most carbon-intensive fossil fuel.

However, India’s independent power producers have relied heavily on Chinese manufacturing capabilities to import commoditised thermal BTG equipment in the first decade of the millennium, and solar cells and wind turbines in the second decade. In both cases, the country missed the opportunity to leverage the massive demand to develop indigenous manufacturing capabilities. 

In both industries - thermal and renewables - the biggest multi-sector corporate groups in India, with a great appetite for entering new industries, led the capacity addition. But instead of thinking long-term and seeing manufacturing as a vertical integration opportunity, they preferred the short-term and easy way of importing from China. 

Another opportunity in power sector that is playing out right now is that of smart meters, where too the same corporate groups have been satisfied with importing Chinese meters and making the easy money by being contractors to install and maintain them. 

The massive future demand for batteries presents a fourth opportunity in power sector itself over the last two decades for both the government and the same corporate groups to learn from their mistakes in thermal and solar generation and smart meters. Many large Indian corporate groups are already engaging in the battery energy storage systems (BESS) industry. The Adani group has already started work on the 30GW Khavda renewable energy park, one of the largest in the world. 

These, as I have blogged here, are opportunities for an industrial policy that involves partnering with large domestic corporate groups to catalyse domestic manufacturing. 

Only these groups have the heft to overcome the coordination problems, financing deep pockets, and risk-aversion to be able to manufacture at a scale that’s attractive enough to break away from the vice-like grip of Chinese manufacturers, and shift component manufacturing in India. Even with the most generous industrial policy and the favourable geopolitical tailwinds of diversifying out of China, there are hard limits to how much industrial policy and market dynamics on their own can go in relocating component makers from China… For countries like India, without any large domestic OEM and without the unique circumstances behind Apple’s engagement with China, local corporate groups may be valuable assets to succeed with the objective of deepening and broadening their manufacturing base. 

In this context, there’s always the risk of crony capitalism. Already, there are strong trends of business concentration across sectors in the Indian economy, driven by the large corporate Groups. But this risk should not be an excuse to overlook the large body of evidence from across the world about the value of large domestic corporate groups in national economic growth.

Such engagement by the private corporate group would involve some very logical long-term bets. For one, the Indian market itself presents a great opportunity for huge growth, and therefore a strong case to forge strategic partnerships, acquisitions, technology licensing, and invest in R&D and innovation, to build domestic capabilities in battery manufacturing. Besides, this would be a bet not only on the large Indian market, but also the global market in an emerging technology where there is an acute scarcity of non-Chinese manufacturers. 

Further, for these groups, grid-scale battery business has deep synergies with their existing businesses, thereby providing them important leverage in negotiations on joint ventures, technology licensing, and domestic manufacturing. This is important since Indian corporates have preferred to leverage the scale of their purchases for short-term pricing considerations when negotiating with their suppliers. 

The Indian corporate groups must summon a long-term vision to both grow into an emerging frontier technology, and also invest in capabilities in R&D and innovation that allow movement up the value chain. They would have to formulate 4-7 year strategies for acquiring capabilities in battery chemistry, starting with the current system integration (or assembly) role to moving up the value chain from licensed to proprietary manufacturing. This would be taking a leaf out of what CATL, BYD, and Sungrow have done. 

The government could provide a big boost by coupling battery and renewables in future power purchase agreements, thereby creating an effective advance purchase volume commitment (even if at competitively determined prices). The new version of the Production Linked Incentive (PLI) scheme should embrace the details outlined here (for smart meters) to encourage progressively increasing domestic value addition. It could use diplomacy to support this with securing access to the various chokehold inputs required for the industry. 

But most importantly, a non-negotiable requirement for government support should be mandatory export competition from the outset to ensure that a globally competitive industry emerges in the country. 

As strategy, it may be useful to bring all the fiscal and other support, including the likes of Viability Gap Funding (VGF) financing, under one umbrella so as to ensure efficient administration and ease of access by companies. This is an important enough agenda to merit such a dispensation. Further, the selected industry partners should be made to commit to medium-term action plans that are linked to simple and easily verifiable milestones and outcomes, and they should periodically report on them. All public policy support should be made contingent on realisation of these outcomes. 

India’s affordable housing policy problem

This post will raise a conceptual point about the size of India’s affordable housing market and the targeting of policy measures aimed at them. 

The vast majority of urban housing construction are apartment units that come not from the formal branded / organised developers in big plots with large numbers of units but from the informal small owner-builder segment in smaller plots with fewer units (typically 4-5 floors on about 500 sq yards). The vast majority of the latter belong to the affordable housing (AH) segment. However, state RERA rules, with their eligibility thresholds on the plot size and number of units, exclude the informal owner-builder segment. 

One implication is that the commonly reported numbers by real estate consultants are likely vastly overstating the deficit, which nevertheless is real and big, but also not reporting the quality, standards, and buyer protection problems that impacts affordable housing supply (by the latter). A bigger problem is that these owner-builder units are ineligible for all the policy benefits that the government provides on AH – GST, PMAY, PSL, etc. 

In other words, we have the perverse situation where all the policy benefits are cornered precisely by the formal / branded developers who hardly supply AH, whereas those informal owner-builders who supply almost all the AH are ineligible for these benefits. 

It is a challenge to get good data to assess the extent of the problem. 

The public debates on housing are anchored around the data supplied by real estate consultants. However, they are confined to the formal organized / branded developers in the top 7–8 cities, who develop RERA-registered gated-community projects with titled land and institutional finance. They contribute the vast majority of the units visible in the Credit Linked Subsidy Scheme (CLSS), 1% GST, 80-IBA, and Priority Sector Lending (PSL) developer construction finance. 

In contrast, it is a challenge to get good data on the builder-owner units. Three states — Telangana, Andhra Pradesh and Delhi — have built self-certification approval systems calibrated to exactly the owner-builder G+4 band. The approval volumes in those systems are the hardest evidence we have to assess the magnitude of supply of such units. The Telangana government’s TG-bPASS database informs that for the period from November 2020 to December 2023, the average number of owner-builder permits every year in Telangana urban for sub-500 sqm plots is about 35,000. 

Three independent estimations - extrapolation from the TG-bPASS, residual from housing stock accounting, and finance-implied - all point to about 0.6-1 million such units being constructed each year nation-wide. 

Based on the above, the graphic below captures a snapshot of the demand-supply landscape for housing. About four-fifths of urban housing demand is EWS and LIG. The formal / branded sector targets MIG and above. The owner-builder channel is the only channel at scale that reaches the middle of the LIG band and upper EWS.

Let us first look at the AH market served by organised / branded developers, who build large numbers of units in each project in big land plots. Their share of housing launches that are AH (<₹40 L) was down from ~40% of the pipeline of the top 7 builders in 2019 to about 16% in Q3 2025. Note that the share of even mid-level housing has been declining. In stark contrast, luxury housing has been climbing steeply. Difficult to miss the K-shape. It can be safely argued that organised developers are quietly exiting the AH segment, and this is the big problem. 

This is validated by the loans data from scheduled commercial banks, which are also drifting upmarket. Below ₹25 lakh, the SCB loan book share has fallen from 41% (Mar 2021) to 28% (Mar 2025). 

New AH launches too echo this trend. The developers have been drawing down the accumulated inventory, instead of starting new projects. 

The unit economics of a owner-builder house makes them much cheaper. These are mostly individual plot-owners partnering with a small local contractor to build typically G+4 on 300–500 sq yd (~250–420 m²) in tier-1 periphery and tier-2/3 towns, with 4-8 units and statutorily exempt from registration under the Real Estate Regulatory Act (RERA). They are sold directly, often before launch, and have minimal advertising, and is transacted in a large share of cash and with personal loans. 

While pricing and area ranges vary by city tier, the owner-builder model is remarkably consistent, consisting mainly of 800–1,100 sq ft carpet, independent floor on a residential plot. And the favourable unit economics allows it to come at a steep discount on the branded unit of same size. 

Now let’s look at the policy benefits available for AH. Interestingly, all policy benfits are gated through RERA registration. 

Under Section 3(2)(a) of the RERA Act, projects on land of 500 sqm or less, or with 8 or fewer apartments, do not require registration. Most states have adopted the central threshold. The G+4 structure on 500 sqyards sits almost exactly at the exemption line. 

The table below summarises the housing category-wise policy support provided.

The next table points to which among the different policy support measures are accessible to owner-builder projects. As mentioned, every single policy instrument designed for affordable housing uses RERA registration (directly or via tied eligibility conditions) as the gatekeeper, which ends up statutorily excluding the owner-builder segment. This is in keeping with the broader policy focus to formalise the informal. 

All this produces a perverse outcome. The branded / organised developer segment, which produces at most ~70,000 affordable units a year in the top 7 cities, captures the full stack of fiscal and regulatory benefits designed for "affordable housing", whereas the owner-builder segment, which likely produces 8–14× that volume of genuinely affordable apartments, captures effectively none of them! The graphic below tells a tale. 

Putting everything together, it becomes clear that while the owner-builder G+4-on-500-sq-yard model probably supplies the majority of India’s urban affordable apartments, it sits outside RERA by statutory design, and therefore outside almost every fiscal and policy benefit the state offers for AH. Instead, all the benefits accrue to the formal / branded sector, which barely builds any affordable at all. Classic mis-targeting of scarce public policy resources. 

The big takeaway is that India has a serious affordable-housing policy problem, and less an affordable-housing supply problem. The channel that supplies most of the affordable apartment stock is not the one the policy architecture is currently designed to reach.

So what on the way forward? Four responses come to mind. 

On the measurement side, since the published AH supply numbers systematically overstate the shortage by excluding the owner-builder channel, it may be useful to build a supply tracker that captures RERA-exempt stock using municipal building-permit data (TG-bPASS, APDPMS, Delhi MCD, etc.), AHFC self-construction disbursals, and listing-site scraping. The state-level building permit systems should be standardised along the TG-bPASS model. 

On the regulatory side, instead of lowering RERA thresholds wholesale, thereby raising costs, it may be prudent to have a lighter-touch “RERA-lite” tier for sub-500 sqm / sub-8-unit projects, with structural safety certification, simple possession-timeline disclosures, and a public register.

On the fiscal side, AH fiscal benefits (GST 1%, 80EEA, stamp duty waivers) should be decoupled from from RERA registration, and eligibility should instead be based on unit characteristics (carpet area and price, differentiated across tier cities). It may also be appropriate to create a specific PSL category for owner-builder project finance (small plot, G+4), channeled through Affordable Housing Finance Companies (AHFCs) and Small Finance Banks (SFBs) with structural certification as the gate.

Finally, on the policy architecture, it may be useful to shift the policy frame from the excessive push to formalise the informal. I have blogged here and here about how forced formalisation adds layers of costs and can end up creating more perversions than good. 

AH is a teachable example of how a well-intentioned formalise the informal policy focus has ended up creating distortions without serving the purpose. Instead, here the policy focus should be to serve the channel that actually serves the demand, the owner-builder model.

Weekend reading links

1. Foreign capital flows into US equities even as they slow down and even reverse in the debt markets. 

Foreign investors made a record $942bn in net purchases of US equities and investment fund shares in the 12 months to July, accelerating a shift in overseas investment towards American stocks and away from debt. The flows represented the highest rolling 12-month total in Treasury data going back to 1985. Net purchases of US equities and investment fund shares by foreign investors jumped to $426bn in the second quarter, up 62 per cent from the same period in 2025, and surpassing the previous quarterly record of $299bn in 2022, according to the Bureau of Economic Analysis... The foreign inflows coincided with a gain of about 20 per cent for Wall Street’s benchmark S&P 500 in the year to July... Foreign demand for US debt moved in the opposite direction. Overseas investors bought a net $188bn of US debt securities in the second quarter, down from $314bn in the first. That came as China’s reported holdings of US Treasuries fell to $618bn, their lowest level since August 2008, as Beijing diversifies into gold, agency bonds and other assets.

2. Markets step in to correct state capability failures - judicial delays edition.

The country suffers from one of the world’s largest judicial backlogs, approximately 54 million pending cases, and inside many of them is big money that one party owes another, that the claimants can’t afford to pursue through years of litigation. An investor could identify favourable cases, fund the legal proceedings, and keep a percentage of the claim if they won. Pool enough of these claims together and it looks something like a private equity fund, except the underlying asset is the claim to a future payout rather than ownership in a company. 

Cut to January 2026, and Kundan Shahi’s litigation company, Legalpay, has committed Rs 100 crore over the next 18 months to financing commercial and insolvency disputes. The firm has already worked with the likes of Zepto, Pwc, and Deloitte and claims to deliver returns exceeding 30% internal rate of return (IRR) to its investors... From the US and UK to Hong Kong, Singapore, and Australia, third-party litigation funding has matured into a fully-fledged asset class, with the former president of the UK Supreme Court calling it “the lifeblood of the justice system”... Burford Capital, listed on the NYSE and LSE, manages a 7.5 billion dollar portfolio of legal claims and claims to have delivered a 26% IRR on concluded cases over 15 years... In May 2026, Five Rivers Capital, a Mumbai firm backed by a global legal finance company, surfaced as the first Indian litigation finance vehicle registered with Sebi as a Category II AIF. The firm is reportedly in talks to raise about $25–$50 million, though it has yet to close the fund or deploy any capital.

3. Attracting foreign universities to establish campus in India has for long been the target of attention for state governments. Now that 17 universities have set up shop, the demand side weaknesses are becoming apparent. 

In its second year, Deakin University had all of 46 students. Another Australian university, Wollongong, started its India campus with just nine students in 2024 and added 19 more in the second year. Considering the bar for entry is the bare minimum—there is no entrance exam for a start—those are dismal numbers. The reasons aren’t hard to fathom. Indian students looking to study abroad broadly fall into two categories. They either want an education from a prestigious institution or they desire to leave the country and see a student visa as an easier way out. The universities establishing campuses in India don’t cater for either.

“I don’t see these universities bringing any cutting-edge programmes here. It’s more of the same,” says a study-abroad consultant who works with some of them. “There are computer science and business courses that attract a certain student, but they aren’t creating programmes that you don’t usually find in India, like quantum computing or spacetech.” If the country hoped that foreign universities would bring world-class research or future-facing tech to India, it might be disappointed. The “lab-lite” courses they offer are cheap to run and easy to scale, allowing them to operate out of corporate complexes rather than expansive campuses. It’s a low-risk, high-margin play. They promise a degree stamped with a “top 500” brand name but without the research-intensive environment that made it a brand in the first place. And yet, they aren’t cheap. A master’s degree from one of these universities costs Rs 15–25 lakh a year. At that pricing, they have competitors to deal with.

4. Excellent long read from Gill Plimmer on how the privatised UK water utilities have skimped on investments and discharged untreated water into the country's rivers polluting and making them toxic. 

Just eight days after Macquarie sold its final stake in Thames Water in March 2017 — leaving behind a debt pile that had grown to £10.8bn — Thames Water received a then-record £20.3mn fine for allowing 1.4bn litres of raw sewage to flow into the River Thames. The untreated effluent had entered the river at six different sites in Oxfordshire and Buckinghamshire, suffocating bream and trout, killing herons and waterfowl, and putting boating companies out of business... Thames Water had been dumping sewage to save money on maintenance during a period when investors received big dividends and its executives huge salaries. No one was held to account. The company’s chief executive, Martin Baggs, had left six months earlier and before the court case started with a £2mn pay package. Baggs went on to join the board of Thames 21 — a non-profit that protects the river... Between 1991 and March 2025, the 16 privatised water monopolies raised a staggering £82bn in debt while simultaneously paying out £85bn in dividends to their shareholders, according to research by the FT.

5. Robin Wigglesworth has a very good long read on the repo markets, which he describes as being similar to the dark matter in astrophysics.

The repo market is often described as the plumbing of finance. Like the pipes around your house, it ensures that money flows from where it is abundant to where it is needed. And if it breaks down, then things quickly get smelly... It is huge, powerful and omnipresent, and most easily observed through its impact on other bodies... the US Treasury calculates that the US market alone is now roughly $12.6tn, and the International Capital Markets Association, a trade body, recently estimated that the European repo market stands at almost €14tn... when it very occasionally comes under pressure, it is enormously unsettling to the rest of the financial universe.

6.  Private equity has become the lightning rod for housing supply crunch in the US during the mid-term elections, on the back of rising home purchases by firms in recent years.

7. Tej Parikh points to an India shock arising from the large and rising pool of migrants from India. The country is the largest contributor to migrants, 18.5 million globally in 2024, and making 70% of all US H1-B beneficiaries. 

These migrants contributed $150 billion in remittances in 2025, or 3% of GDP. 

Such large migrants invariably invites discontent in these times.

Indeed, anti-Indian sentiment is on the rise. Just this month, the Republican nominee for a seat on Texas’s oil and gas regulator sparked allegations of racism for a social media post aimed at South Asian students. Last year, Indian-origin migrants were explicitly targeted in “March for Australia” rallies. Anti-South Asian slurs in online spaces in the US have also surged. The backlash could hinder the Modi government’s strategy. As it happens, US President Donald Trump has raised scrutiny of and fees for H-1B visas.

8. Very good article about the Gurugram story.  

As of June, Gurugram housed North India’s largest office space, with 100 million square feet built and counting. The who’s who of global MNCs — Apple, Google, Microsoft, Amazon — have a presence here, if not their India headquarters... the data shows that Gurugram’s share in Haryana’s employment in the organised sector has risen from 17.35 per cent in FY06 to 67.62 per cent in FY24, meaning that roughly two in every three organised-sector jobs in Haryana sat inside this one district... Gurugram made up 1.2 per cent of the total number of shops and commercial establishments in Haryana in 2006, which ballooned to 13.51 per cent in 2024. It also made up 67 per cent of the people employed in these sectors in 2024, versus about 26 per cent in 2006.

9. Good graphical feature on PE's problem of exits.

The private equity sector is managing a record $4.7tn in assets. But a growing portion of these assets are unsold companies, an increasing share of which have been held for five years or more. The median holding time is a record seven years. Most unspent capital, or "dry powder", was raised before 2024.

This has caused the distribution of cash to its investors to plunge since 2021.

And the share of exits through continuation funds (dedicated pools of cash from new investors to buy companies from themselves) has climbed sharply.

10. Nvidia announces the biggest share buyback in history worth $150 bn, beating Apple's record $110 bn in 2024.

11. Solar plus battery convergence with thermal power in India.

Solar Energy Corporation of India (SECI) ran an auction to buy electricity capacity where they (SECI) demanded the availability of a thermal generator. A bidder who plans to use solar or wind is then forced to load up with the batteries required, to charge in the day, so as to deliver thermal-style availability. This auction discovered a price of ₹5.25 per kWh, guaranteed for 25 years. It is hard to identify a single comparable price for coal thermal in India because coal-extraction rights are given by the state in non-market ways. But if we look at recent new coal-power contracts in India, they are priced at ₹5.38-6.30 a unit. The SECI-discovered thermal-mimicking price for renewable power is now 10 per cent cheaper than that for new coal.

12. This makes great sense, and is something this blog has been advocating, especially the demand-side creation, for India's semiconductor chip design ambitions. 

What is missing is capital that funds Indian fabless companies all the way to commercial tape-out, not just prototypes. DLI must be expanded. ISM 2.0 should create a Chip Design Commercialisation Fund at Rs 1,000-crore scale — modelled on NIIF — and designate at least two sovereign AI inference chip programmes with guaranteed government offtake. Those two changes, delivered in the next budget, would do more for India’s semiconductor future than more wire-bond packaging projects.

13. Surjit Bhalla says that India's external linkages in terms of FDI and FPI look dismal.

In 2025-26 India recorded a record FDI inflow of $94.5 billion. In the same year, foreign investors repatriated or disinvested $53.6 billion, leaving $40.9 billion. Indian firms invested $33.3 billion abroad. Net foreign direct investment — just $7.65 billion. About 0.18 per cent of GDP — and that is the good news, being a recovery from 0.02 per cent in 2024-25. Still the second-lowest in three decades... Reinvested earnings of foreign firms — profits earned here and not taken home, a figure not part of India’s FDI statistics until the definition changed in 2000-01 — were $25.6 billion in 2025-26, more than three times net FDI. Retained earnings are not a new commitment to India... In 2025, Indian equities underperformed emerging markets by the widest margin since 1993, and trailed Asia-Pacific by the most since 1998. Foreigners withdrew $17.7 billion. This year till August 19, India was down 9.1 per cent in dollar terms while emerging markets were up 20.6 — a gap of 30 percentage points in under eight months. Korea was up 77.6 per cent, Taiwan 58. Another $10.5 billion has left.

14. Graphical explanation of why the US Treasury Bonds are climbing,

15. Starbucks was once hailed as a poster child for ESG practices. In a remarkable reversal, it has now scaled back or scrapped its green goals and fired sustainability staff. 

The coffee shop chain has revised or dropped pledges to halve water use and waste, while a goal to cut carbon emissions by 50 per cent is under review. The pullback comes amid a broader US corporate retreat from environmental commitments as political pressure rose under President Donald Trump and ambitious targets prove hard to meet. But Starbucks stands out because few companies made sustainability so central to their corporate identity. The Seattle-based group announced its targets in 2020, when then chief executive Kevin Johnson declared in a public letter that “sustainability has been at Starbucks’ core since the beginning and consistent with our belief that we can build a great business that scales for good”. The letter, which pledged transparency about its progress, is no longer on the company’s website, while many targets were absent or amended in Starbucks’ annual Global Impact Report published this summer.

16. Good NYT article on how Asia managed to survive the Iran war till date. This is how India managed to maintain oil supplies.

And this is how the natural gas supplies were substituted.