Market snapshot
Equities and sectors
The Nifty opened 52 points higher at 24,284, continuing the recovery from the previous session despite weaker global markets. A softer Dollar Index provided some relief. The index turned volatile soon after opening and briefly fell towards 24,210 in the first 20 minutes.
Buying picked up after that. The Nifty moved back above 24,250 by around 10:30 AM and reached an intraday high of around 24,265 to 24,270 near 11 AM. By noon, it had slipped back towards the 24,230 to 24,240 range.
The second half remained choppy, with the Nifty moving repeatedly between 24,225 and 24,250. It spent most of the final hour around 24,230 to 24,240 before a late move took it to 24,252. This was its second consecutive higher close, although the gain for the day was only 0.08%.
Benchmark and broader-market close
| Index | Day's close | Day's change | Previous close |
|---|---|---|---|
| Nifty 50 | 24,252.00 | 0.08% | 24,231.85 |
| Sensex | 77,540.83 | 0.00% | 77,537.72 |
| Nifty Next 50 | 73,992.10 | -0.27% | 74,194.15 |
| Nifty Midcap 150 | 23,407.70 | 0.08% | 23,388.80 |
| Nifty Smallcap 250 | 18,414.45 | 0.41% | 18,338.60 |
| Nifty Microcap 250 | 26,334.35 | 0.25% | 26,268.65 |
Zerodha AfterMarket Report, 21 August 2026 close
Sectoral indices
Metals and banks were among the stronger sectors. Metal rose 0.86% and Bank gained 0.46%. FMCG and Auto were weaker, falling 0.74% and 0.60% respectively.
Zerodha AfterMarket Report
Top gainers and losers among F&O stocks
Zerodha AfterMarket Report; Zerodha Technicals
Commodities and currency
Commodities were broadly higher. Natural gas rose 1.95%, while gold and silver gained 1.18% and 1.24% respectively. MCX crude oil rose 0.66%.
Zerodha AfterMarket Report
Currency and bond yields
| Instrument | Day's close | Day's change | Previous close |
|---|---|---|---|
| USDINR | 95.71 | 0.06% | 95.65 |
| US 10-year bond yield | 4.69 | 0.86% | 4.65 |
| India 10-year bond yield | 6.88 | 0.06% | 6.87 |
Zerodha AfterMarket Report, 21 August 2026 close
Institutional flows
Foreign institutional investors, or FIIs, sold a net ₹543 crore of Indian equities on 21 August. Domestic institutional investors, or DIIs, bought a net ₹2,124 crore.
Across the five sessions covered in the report, FIIs were net sellers of ₹1,601 crore, while DIIs were net buyers of ₹17,316 crore.
Zerodha AfterMarket Report; NSE
The macro view
Economic indicators
India Composite PMI
India's HSBC Flash Composite PMI rose to 54.6 in August from 54.3 in July. Stronger services activity helped offset slower growth in manufacturing.
Economic activity remained in expansion for the 61st consecutive month. However, the August reading was still the second weakest since March 2022, and growth in new orders remained subdued compared with recent years.
Zerodha AfterMarket Report
Foreign exchange reserves
India's foreign exchange reserves rose by $9.9 billion to $716.9 billion in the week ended 14 August, compared with $707 billion a week earlier.
Foreign currency assets increased by $7.2 billion, while gold holdings rose by $2.7 billion. India's record foreign exchange reserves stand at $728.5 billion, reached in February.
Zerodha AfterMarket Report
Portfolio Management Services industry
Assets under management in India's Portfolio Management Services industry rose 2% month-on-month to ₹44.11 lakh crore in July. The number of client accounts increased 1.3% to around 2.23 lakh.
Compared with a year earlier, both assets under management and client accounts grew by around 11%.
Zerodha AfterMarket Report; APMI
Policy, tax and regulation
Centre challenges Madras High Court GST relief to Jio
The Centre has approached the Supreme Court against a 5 March Madras High Court order that gave Reliance Jio Infocomm Ltd relief in a dispute over how goods and services tax credits were distributed among its different registrations. The Centre filed its plea on 20 August.
Jio has 36 GST registrations across different states and Union territories. The dispute began with show-cause notices issued by GST authorities in June 2025 for the period from 2018-19 to 2023-24.
The tax department alleged that Jio distributed certain input tax credits after the month in which the original invoices were issued. It argued that this violated Rule 39(1)(a) of the Central Goods and Services Tax Rules, 2017.
Jio argued that receiving an invoice does not mean the credit mentioned in it can immediately be claimed or distributed. It also argued that before 1 April 2025, the law did not clearly give the government the power to set a time limit for such distribution.
Queries emailed to Reliance Jio and the GST department remained unanswered.
Mint Mumbai print edition, 24 August 2026
Centre proposes decriminalising minor textile rule breaches
The Centre plans to replace jail terms with fines for minor textile trade violations. It has also proposed a time-bound process for deciding violations under the Textiles Committee Act as part of a broader effort to reduce criminal liability for business-related lapses.
Under the draft Textiles Committee (Adjudication of Penalties and Appeal) Rules, 2026, violating orders that prohibit the export or domestic sale of specified textiles or textile machinery would no longer carry imprisonment. A first offence would result in a warning, while continuing or repeated violations could attract a penalty of up to ₹25 lakh.
Stakeholders have 30 days to submit objections. A person facing action would have 15 days from receiving a show-cause notice to reply.
The Textiles Committee Act was framed in 1963. India's textile industry exported merchandise worth $35.7 billion in FY2025-26 and accounts for around 8% of the country's merchandise exports.
Queries emailed to the textiles ministry remained unanswered until press time.
Mint Mumbai print edition, 24 August 2026
Food ministry seeks five-year extension of ₹10,000 crore PMFME scheme
The Ministry of Food Processing Industries has sought a five-year extension of the ₹10,000 crore Pradhan Mantri Formalization of Micro Food Processing Enterprises, or PMFME, scheme.
The scheme was launched on 29 June 2020 as a centrally sponsored scheme. It was extended through FY2025-26 and was later continued until 30 September 2026.
Spending under the scheme is shared between the Centre and states in a 60:40 ratio. For north-eastern and Himalayan states, the ratio is 90:10.
Eligible micro food-processing businesses can receive a 35% credit-linked capital subsidy. Subsidy support is available for projects costing up to ₹30 lakh.
As of 30 June, 200,421 micro food enterprises had been approved. They received credit-linked subsidies of ₹5,954.57 crore and attracted private investment of around ₹14,480.24 crore. More than 40% of the beneficiaries are women entrepreneurs.
Agriculture and allied sectors contribute around 16% of India's economy, and 46% of the workforce depends on agriculture.
Mint Mumbai print edition, 24 August 2026
War-hit renewable projects get four-month commissioning relief
Renewable energy projects scheduled to be commissioned on or after 28 February can receive a four-month extension to their scheduled commissioning dates.
The Ministry of New and Renewable Energy issued the advisory on 21 August. It said relevant agencies can provide force majeure relief because of supply-chain problems caused by the West Asia war.
The extension can protect clean-energy developers from penalties for missing completion deadlines. These penalties can include the encashment of bank guarantees, daily extension fees, other financial compensation and reductions in contracted tariffs.
Under the earlier framework, projects commissioned on or before 30 June 2026 were offered a 75% waiver on inter-state transmission system charges for 25 years. Projects commissioned by 30 June 2028 will receive a 25% waiver for the same period. Projects that remain incomplete after 30 June 2028 will receive no waiver.
Experts estimate that project costs could increase by up to 20% because of higher raw-material prices and the implementation of the approved list of models and manufacturers.
A module produced by a domestic original equipment manufacturer using imported cells costs around 16 cents per watt. The cost rises to around 22.5 cents per watt when domestic cells are used.
Mint Mumbai print edition, 24 August 2026
India prepares national quality standards for semaglutide
India is creating official quality standards for semaglutide. The Indian Pharmacopoeia Commission is drafting a dedicated pharmacopoeial monograph that will define standards for the medicine's identity, purity, potency and testing.
CareEdge expects India's weight-loss drug market to cross $347 million in annual sales by 2035.
The global patent on semaglutide expired on 20 March. Indian brands are now available at prices ranging from around ₹1,300 to ₹16,400 per month, depending on the brand and dose.
Queries emailed to the health ministry, DCGI, Sun Pharma, Mankind, Glenmark, Zydus and Novo Nordisk remained unanswered.
Mint Mumbai print edition, 24 August 2026
Defence minister on shipbuilding
Defence minister Rajnath Singh said India is capable of becoming a global shipbuilding hub as a gap emerges in the industry among traditional shipbuilding countries.
The foundation was laid for five projects worth nearly ₹3,500 crore in West Bengal. These include three facilities of Garden Reach Shipbuilders and Engineers Ltd and two of Yantra India Ltd.
Mint Mumbai print edition, 24 August 2026; PTI
The case for front-of-pack junk food labels
On 13 August, the Supreme Court criticised India's food regulator for delaying front-of-pack labels on junk food. It asked the Centre to make a final decision within a fortnight.
The court directed the Food Safety and Standards Authority of India to decide on warning labels for ultra-processed food packets that would alert consumers to high levels of salt, sugar and fat.
The 14-page order cited a 2025 Unicef report on child nutrition. The report found that the incidence of overweight among schoolchildren and adolescents aged 5 to 19 increased fivefold, from 2% to 10%, in the two decades to 2020.
Citing the Economic Survey 2025-26, the court also noted that obesity doubled between 2009 and 2023. During the same period, the size of the ultra-processed food market increased by 150%.
The 2023-24 consumption expenditure survey showed that rural families spent nearly 10% of their average monthly per capita expenses on processed food and beverages. This was more than they spent on either education or health.
The Supreme Court has asked the Centre to decide by 27 August. The case will next be heard on 10 September.
Mint Mumbai print edition, 24 August 2026; Unicef; Economic Survey 2025-26
Corporate action and earnings
Domestic headlines
NRI investors report $100 million hit on fund distributed by HDFC Bank
A group of 70 investors has complained about how HDFC Bank sold them a high-yield financial product. This is the second such case of customer complaints against the bank in West Asia.
The group says its members account for $12.5 million, or nearly ₹120 crore, of an estimated $100 million that HDFC Bank raised from customers. The product was offered between 2017 and 2019 as a unique investment opportunity promising returns of 14% to 16%.
The money was invested in the Luxembourg Life Fund, a life settlement fund managed by Carlisle Asset Management. The fund stopped redemptions in late 2020, leaving several investors unable to withdraw their money. Many of these investors were non-resident Indians.
Mint has not been able to independently verify the $100 million figure.
HDFC Bank said it facilitated client investments, but responsibility for fund performance and redemptions lies with the fund house. It added that HDFC Bank was not the only distributor and that it had found no instance of mis-selling in this case.
In a letter dated 11 August, HDFC Bank's Bahrain branch told investors that Carlisle had consistently failed to execute investor requests related to unit redemptions since November 2020.
Mint Mumbai print edition, 24 August 2026
DP World plans $700 million to $800 million India expansion
Dubai-based logistics company DP World is preparing for another phase of expansion in India.
It plans to bid for upcoming ports and inland container depots at Vadhavan in Maharashtra and Dadri in Uttar Pradesh. It also plans to invest $700 million to $800 million in India in the short term.
DP World generated $24.4 billion in global revenue in 2025 and has invested around $2.5 billion in India so far.
Group CEO Yuvraj Narayan expects the company's EBITDA to be around $6 billion in 2026, slightly below last year's $6.4 billion, despite shipping restrictions at Jebel Ali since March.
Utilisation across India's container terminal capacity is below 60%. DP World's mature ports globally operate at around 95% utilisation.
Mint Mumbai print edition, 24 August 2026
Nvidia to spend $6 billion on Poolside licensing and talent
Nvidia plans to use a $6 billion deal struck this week to help build one of the world's most powerful open-weight AI models.
Nvidia will invest $1 billion in Poolside at a pre-money valuation of $12 billion. It will also pay $6 billion to license Poolside's technology and hire most of its engineers, based on a shareholder letter reviewed by The Wall Street Journal.
More than 100 Poolside employees, including engineers, will join Nvidia. They will work on Nemotron, Nvidia's project to develop open-weight AI models, which was launched in 2023.
Mint Mumbai print edition, 24 August 2026; The Wall Street Journal
Third Wave Coffee raises ₹408 crore
Bengaluru-based café chain Third Wave Coffee has raised ₹408 crore in a funding round led by existing investor Westbridge Capital.
Most of the money came through a primary issuance. Creaegis and other angel investors also participated.
The latest round values Third Wave at around ₹2,000 crore, compared with ₹1,300 crore in its 2023 funding round.
Westbridge's shareholding will rise to around 47%, while Creaegis will own close to 15%.
Over the next few months, Third Wave plans to expand its retail presence into nine new cities, including Ludhiana, Jalandhar, Amritsar and Lucknow.
Mint Mumbai print edition, 24 August 2026
Jewellers expand cash-for-gold programmes ahead of festive season
Jewellery retailers including Kalyan Jewellers India Ltd and Titan Co. have introduced or expanded cash-for-gold programmes since June.
High gold prices and volatile demand are putting pressure on sales and margins before the festive season.
Cash-for-gold transactions rose to a double-digit share of Kalyan's business in the June quarter, compared with a single-digit share earlier. Recycled gold accounted for 46% of Kalyan's India business in the June quarter, up from 31% in the March quarter.
The price of 24-carat gold was ₹1,60,480 per 10 grams on 21 August, compared with around ₹1,35,000 on 1 January.
Jefferies analysts estimate that weddings account for 60% of gold purchases in India.
Kalyan's EBITDA fell 14% sequentially in the April-June quarter. Its EBITDA margin fell by 100 basis points both year-on-year and sequentially to 6%.
Mint Mumbai print edition, 24 August 2026; India Bullion and Jewellers Association; Jefferies
JK Tyre considers acquisitions alongside ₹6,000 crore capex plan
JK Tyre & Industries Ltd is considering acquisitions as it prepares to invest ₹6,000 crore over the next three years.
The investment will expand capacity across its truck, bus and passenger vehicle businesses.
JK Tyre acquired Cavendish Industries in a ₹2,195 crore deal and merged it with the company eight months ago.
In FY2026, around 53% of JK Tyre's revenue came from trucks and buses, while 30% came from passenger vehicles.
Net profit grew 52% to ₹776 crore in FY2026, while revenue rose 11% to ₹16,327 crore.
JK Tyre's shares have fallen 28% in 2026, compared with a 2% gain in the Nifty Auto index.
Mint Mumbai print edition, 24 August 2026
Gulf Oil to nearly double EV charger capacity at Tirex
Gulf Oil India Ltd plans to invest ₹50 crore to nearly double capacity at its electric vehicle charger manufacturing facility in Ahmedabad.
Capacity is expected to rise to around 3,000 DC fast chargers from 1,800.
Gulf Oil manufactures EV chargers in India through its stake in Tirex Transmission Pvt. Ltd. Tirex's revenue increased from ₹79 crore in FY2025 to more than ₹100 crore in FY2026.
Gulf Oil holds roughly 40% of India's DC fast-charger market, according to managing director and CEO Ravi Chawla.
India has 67,657 public EV chargers, according to Bharat Heavy Electricals Ltd, the nodal agency for EV charging infrastructure under the Centre's ₹11,900 crore PM E-Drive scheme.
Of these chargers, only 534 have capacity between 121 and 240 kilowatts. Just nine have capacity above 240 kilowatts.
Mint Mumbai print edition, 24 August 2026; Bharat Heavy Electricals Ltd
Other corporate developments
- Welspun Corp: Welspun Corp secured its largest-ever single order, worth $1.8 billion, or around ₹17,200 crore. The company will supply pipes from its US manufacturing facility. The order will be executed during FY2028 and FY2029 and takes Welspun's global order book to a record $4.4 billion, or around ₹42,100 crore.
- Tata Motors: Tata Motors Passenger Vehicles will increase prices of its cars and SUVs by up to ₹25,000 from 1 September. The increase will vary across models and variants. The company said the price rise is intended to partly offset higher input costs and continued commodity inflation amid geopolitical uncertainty.
- ICICI Bank: ICICI Bank has approved plans to raise up to $5 billion from overseas debt markets. The bank revised its international borrowing limit and plans to raise the money through bonds, notes and offshore certificates of deposit.
- Colgate-Palmolive India: MD and CEO Prabha Narasimhan has resigned one year before the end of her tenure. Manish Anandani has been appointed MD and CEO for a five-year term and will take charge on 28 September. Narasimhan will move to a new role as Executive Vice President, Marketing, Asia Pacific.
Six major FMCG companies, including Hindustan Unilever Ltd, Godrej Consumer Products Ltd, Dabur India, Britannia Industries and Colgate-Palmolive India, have announced senior leadership changes over the past 12 months. Manish Anandani will take over at Colgate on 28 September.
Zerodha AfterMarket Report, Top Stories in India; Mint Mumbai print edition, 24 August 2026
Upcoming events
The week ahead
| Date | Event |
|---|---|
| 21-28 August | Infosys to hold non-deal roadshows across US and Asian cities |
| 24-28 August | Symbiotec, Hy-Tech Engineers and Skyways Air IPOs to open |
| 26-28 August | UN deputy secretary-general Amina Mohammed to visit India |
| 27 August | Samsung to unveil the newest addition to the Galaxy S26 family |
| 28 August | Women's Asia Cup cricket tournament to begin in Dubai |
| 29 August | Ather to enter mass-market electric scooters with its new Konarc model |
Mint Mumbai print edition, 24 August 2026, "The Week Ahead"
Upcoming economic events
| Date | Event |
|---|---|
| 24 August 2026 | Real GDP, Mexico |
| 25 August 2026 | Central Bank Policy Rate, Poland |
| 25 August 2026 | Broad Money Supply, M3 |
| 26 August 2026 | Broad Money Supply, M3 |
| 26 August 2026 | Central Bank Policy Rate, Thailand |
| 26 August 2026 | Inflation, Australia |
| 27 August 2026 | Central Bank Policy Rate, Philippines |
| 27 August 2026 | Central Bank Policy Rate, Korea |
Zerodha AfterMarket Report; Zerodha Economic Calendar
Global pulse
Global index closes
Zerodha AfterMarket Report
Global markets and commodities
Gold
Gold rose 1.5% to around $4,587 per ounce, reaching its highest level in more than three months. It was on track for a third consecutive weekly gain.
The rise came as the US dollar weakened and the US Treasury unexpectedly expanded its buybacks of long-duration bonds. Gold also moved above its 200-day moving average, which triggered additional technical buying.
Zerodha AfterMarket Report
US Treasuries
The US 10-year Treasury yield traded around 4.7%, while the 30-year yield moved back to around 5.25%.
This nearly reversed the earlier decline in yields after the Treasury expanded its long-duration bond buybacks.
Investors remained doubtful that the intervention could reduce borrowing costs for a sustained period. Treasury Secretary Scott Bessent said buybacks could exceed $4 billion per operation and also pointed to an upcoming fiscal consolidation plan.
Zerodha AfterMarket Report
Crude oil
Brent crude traded near $94 per barrel and was heading for a second consecutive weekly gain of around 6%.
The unresolved US-Iran conflict continued to disrupt energy supplies from the Middle East. Expectations of further US economic pressure on Iran and continued disruption around the Strait of Hormuz kept concerns about oil supply high.
Zerodha AfterMarket Report
Samsung Electronics
Samsung Electronics expects shareholder returns to reach as much as 110 trillion won, or $79.5 billion, in 2026. This would be more than five times its previous record.
The total includes 30 trillion won of cash dividends in the third quarter.
Samsung is facing pressure to return more of its record AI-driven chip profits to shareholders after rival SK Hynix announced a buyback.
Zerodha AfterMarket Report
Japan inflation
Japan's core consumer inflation rose to 1.8% year-on-year in July from 1.6% in June.
A weaker yen and higher import and energy costs pushed prices up.
Inflation remained below the Bank of Japan's 2% target for the seventh consecutive month. However, underlying inflation also strengthened, increasing expectations that the Bank of Japan could raise its policy rate from 1% to 1.25% in September.
Zerodha AfterMarket Report
Germany manufacturing
Germany's S&P Global Manufacturing PMI rose to 54.1 in August from 52.2 in July.
The reading was above market expectations and was the strongest since May 2022.
Manufacturing expanded for a seventh consecutive month, helped by faster growth in output, new orders and exports.
Zerodha AfterMarket Report
Global developments
US-Canada trade talks collapse, Canada prepares counter-tariffs
US-Canada trade negotiations collapsed late on Friday after weeks of talks.
Tariffs of 50% on $20 billion of Canadian goods took effect after midnight. These goods account for around 5% of Canada's exports to the US.
Canadian Prime Minister Mark Carney said Canada would impose dollar-for-dollar counter-tariffs on US goods including steel, dairy and appliances on 8 September, the day after Labor Day.
Negotiators had been close to a deal under which the US would reduce tariffs on steel and aluminium from 50% to 25% and lower the main automotive tariff from 25% to 15%.
Pushback from US industry and disagreements within the Trump administration helped derail these parts of the negotiations.
The White House, Commerce Department and Office of the US Trade Representative did not respond to requests for comment.
Mint Mumbai print edition, 24 August 2026
Iran dismisses new US sanctions threat
Iran's foreign minister dismissed the threat of new US sanctions on Sunday, calling it a sign of desperation and saying the expected measures would fail to defeat Tehran.
US Treasury Secretary Scott Bessent is due to hold a press conference at 2 PM EDT on Monday. He has threatened to impose what he called the toughest sanctions in history on Iran.
Mint Mumbai print edition, 24 August 2026; Reuters
Saudi Arabia reroutes crude as Houthi threat grows
Saudi Arabia is again changing the routes used to transport its oil as Yemen's Houthis make it harder to use an alternative export route.
The country is sending oil tankers thousands of miles around Africa.
Saudi Arabia's ability to redirect crude exports to its west-coast facilities has been important in limiting the rise in oil prices since Iran effectively shut the Strait of Hormuz.
Mint Mumbai print edition, 24 August 2026; Bloomberg
Private equity firms build AI teams inside portfolio companies
Blackstone and Hellman & Friedman have formed a team of around 160 artificial-intelligence specialists with Anthropic.
The team will be deployed inside businesses, starting with companies in their own investment portfolios.
The initiative is part of a $1.5 billion joint venture that also includes Apollo, General Atlantic and Goldman Sachs as backers.
Blackstone, Hellman & Friedman and Anthropic are each committing around $300 million to the venture. The new stand-alone company is called Ode.
Blackstone plans to roll out the programme at 25 of its more than 270 portfolio companies.
Mint Mumbai print edition, 24 August 2026
European luxury companies see signs of stabilisation in China
Sales at China's 25 largest luxury labels fell by more than 10% in July as the country tried to limit capital outflows and tax offshore wealth.
However, Burberry Group Plc reported a 9% increase in retail sales in Greater China in its most recent quarter, helped by demand from Gen Z consumers.
Bloomberg Intelligence analysts see Chinese household consumption stabilising and beginning to recover in some categories.
Mint Mumbai print edition, 24 August 2026; Bloomberg
The global gaming reset
Electronic Arts completed a $55 billion deal to go private, led by Saudi Arabia's Public Investment Fund.
Microsoft said it was cutting 3,200 jobs at Xbox and selling studios.
Global video game revenue rose from $131.7 billion in 2019 to $147.7 billion in 2020, before increasing to $214.2 billion in 2021, according to a 2022 PwC report.
India's video game market, excluding real-money gaming, crossed $1 billion for the first time in 2025. It reached $1.04 billion and could grow to $1.77 billion by 2030, which implies annual growth of around 11%.
The cumulative number of online gamers in India reached 511 million in 2025.
Mint Mumbai print edition, 24 August 2026; howindialives.com; PwC; Niko Partners; EY-FICCI
Management chatter
On fewer new businesses entering the formal credit system despite overall credit growth
“In 2022-23, 52 per cent of fresh businesses entered the formal credit system. By 2025-26, that figure had fallen to 42 per cent — even as outstanding commercial credit grew by fourteen per cent over the year.”Shirish Chandra Murmu, Deputy Governor, Reserve Bank of India
Zerodha AfterMarket Report
On whether high temperatures alone can drive air-conditioner sales if rural income is hurt by a weak monsoon
“I have stated this earlier: going by history, India is an agricultural and rural economy. A poor monsoon will result in weak demand across Tier 3, Tier 4, and Tier 5 towns.”B Thiagarajan, Managing Director, Blue Star
Zerodha AfterMarket Report
On the ownership structures DP World wants for Indian port concessions that expire over the next five years
“What I would like is a long-term arrangement. I will continue to invest and expand, and you be a shareholder. If I make money, you make money.”Yuvraj Narayan, Group Chief Executive Officer, DP World
Mint Mumbai print edition, 24 August 2026
On why foreign portfolio investors have been selling Indian equities
“India’s lack of direct exposure to the global AI value chain was just one of the reasons for the FPI outflows.”Pratik Gupta, Chief Executive and Co-head, Kotak Institutional Equities
Mint Mumbai print edition, 24 August 2026
Feature: The 2020 Franklin Templeton debt fund crisis
What happened on 23 April 2020
On 23 April 2020, Franklin Templeton Mutual Fund decided to wind up six debt schemes because of liquidity problems caused by the Covid-19 pandemic.
The six schemes were:
- Franklin India Ultra Short Bond Fund
- Franklin India Low Duration Fund
- Franklin India Short Term Income Plan
- Franklin India Income Opportunities Fund
- Franklin India Dynamic Accrual Fund
- Franklin India Credit Risk Fund
Together, the schemes had more than ₹25,000 crore in assets belonging to around 300,000 investors.
The winding-up decision meant investors could no longer withdraw their money or make new investments. Existing investments were effectively frozen.
The schemes had become popular because they had generated high returns in the past. Many companies and wealthy individuals had placed surplus money in them. However, relatively little attention had been paid to the risk of the strategies being used. The schemes had aggressive exposure to securities rated below AA.
Franklin Templeton said it wound up the schemes under Regulation 39(2)(a) of the SEBI (Mutual Funds) Regulations, 1996.
In response to a right-to-information query, the Securities and Exchange Board of India said it had not given Franklin Templeton permission to wind up the schemes.
Business Standard; SEBI
The courtroom sequence
| Date | Development |
|---|---|
| June 2020 | The Gujarat High Court stayed the e-voting process and the unitholders' meeting scheduled for 9-12 June. Franklin Templeton suspended both. |
| 24 October 2020 | The Karnataka High Court held that the trustees' decision to wind up the six schemes could not be implemented without the consent of unitholders. |
| 3 December 2020 | The Supreme Court asked Franklin Templeton to begin the process of calling a unitholders' meeting within one week to seek consent. It said there would be no redemption of units until further orders. |
| 2 February 2021 | The Supreme Court directed Franklin Templeton to distribute ₹9,122 crore to unitholders within 20 days and gave SBI Mutual Fund responsibility for the disbursal. |
| 12 February 2021 | The Supreme Court upheld the validity of the e-voting process for winding up the schemes and said distributions to unitholders would continue. |
| 18 March 2021 | The Supreme Court accepted a standard operating procedure prepared by SBI Funds Management, in consultation with Franklin Templeton Mutual Fund and SEBI, for selling assets and distributing the proceeds. |
| 14 July 2021 | The Supreme Court held that trustees must obtain the consent of a majority of unitholders before closing mutual fund schemes, after publishing a notice explaining the reasons for the decision. |
| 22 August 2023 | SBI Funds Management completed the liquidation of assets in the six schemes. |
Business Standard; Press Trust of India; IANS
The money that came back
SBI Funds Management was appointed by the Supreme Court in February 2021 to oversee the liquidation.
It sold 217 securities and distributed around ₹27,508 crore. The company said this was equal to 109% of the value of the securities on 23 April 2020, the date on which the schemes were wound up.
The six schemes had assets under management of ₹25,215 crore before redemptions were stopped.
A Franklin Templeton spokesperson said investors in all six schemes ultimately received more than 100% of the respective reported assets under management as of 23 April 2020. The amounts distributed ranged from 107.2% to 113.4% of those values.
SBI Funds Management said it carried out the liquidation without causing disruption in the market so that it could obtain the best possible value for the assets.
By August 2021, the six schemes had already distributed ₹21,080 crore to investors. This was equal to 84% of the assets under management as of 23 April 2020. At that point, the proportion returned across individual schemes ranged from 62% to 99%.
Business Standard; IANS
What the regulator found
In a 100-page order dated 7 June 2021, SEBI directed Franklin Templeton Mutual Fund to return the investment management and advisory fees it had collected between June 2018 and April 2020.
SEBI also imposed a ₹5 crore penalty and banned the fund house from launching new debt schemes for two years.
The disgorgement amount, including 12% simple interest, was ₹512 crore.
SEBI found serious lapses and violations in several areas. These included scheme categorisation, where a high-risk strategy had been repeated across multiple schemes.
It also found problems in the calculation of Macaulay duration, which resulted in long-term securities being placed in short-duration schemes.
Other violations related to the failure to use exit options as a liquidity crisis developed, securities valuation, risk management and investment due diligence.
“The serious lapses and violations appear to be a fallout of the Noticee’s obsession to run high-yield strategies without due regard from the concomitant risk dimensions.”SEBI order of 7 June 2021, as quoted by Business Standard
On 14 June 2021, SEBI imposed penalties totalling ₹15 crore on senior officials and the trustee.
These included:
- ₹3 crore on Franklin Templeton Trustee Services Pvt Ltd.
- ₹2 crore on president Sanjay Sapre.
- ₹2 crore on chief investment officer Santosh Kamath.
- ₹1.5 crore each on five fund managers.
- ₹50 lakh on the then chief compliance officer.
SEBI
In a separate order, SEBI barred former Asia-Pacific head Vivek Kudva and his wife Roopa from the securities market for one year. The action related to their redemption of units while allegedly possessing non-public information.
SEBI imposed a cumulative penalty of ₹7 crore and sought disgorgement of ₹22 crore.
The Securities Appellate Tribunal granted interim relief on 28 June 2021 and partly stayed SEBI's order against the asset management company. SEBI approached the Supreme Court in July 2021 against this relief.
The tribunal noted that Franklin Templeton was still managing 21 debt schemes without complaints.
By August 2023, the SEBI penalty remained stayed by the tribunal after the June 2021 order, and the case was still continuing.
In March 2023, the Enforcement Directorate carried out searches at the homes of current and former Franklin Templeton India executives in Mumbai and Chennai in connection with the fund closures.
SEBI; Securities Appellate Tribunal; Business Standard; PTI
How the rulebook changed
In a circular dated 6 November 2020, SEBI introduced minimum liquidity requirements for most open-ended debt funds.
All open-ended debt schemes except overnight funds, liquid funds, gilt funds and gilt funds with a 10-year constant duration were required to hold at least 10% of their net assets in liquid assets.
Liquid assets were defined as cash, government securities, treasury bills and repo transactions on government securities.
SEBI also required all debt schemes except overnight funds to conduct stress tests.
The Association of Mutual Funds in India recorded in its best-practice circular dated 24 July 2021 that SEBI's circular of 25 June 2021 had asked it to prescribe a liquidity risk management framework for open-ended debt schemes.
The framework requires funds to maintain two types of liquid assets. One of these is based on the Redemption at Risk concept.
SEBI's 25 June 2021 circular stated that the AMFI framework would take effect from 1 December 2021 for all existing open-ended debt schemes and for schemes launched after that date.
SEBI; AMFI
Swing pricing
In a consultation paper dated 19 July 2021, SEBI proposed a swing-pricing mechanism for mutual funds.
The proposal used a hybrid model. Partial swing pricing would apply during normal market conditions, while full swing pricing would become mandatory during periods of market dislocation.
Swing pricing adjusts a fund's net asset value so that transaction costs caused by inflows or outflows are passed on through the fund's NAV.
SEBI; Business Standard
The liquidity problem exposed by the crisis
“When faced with high redemptions, debt funds liquidate the most liquid and high-quality assets, or they borrow against their holdings. This confers a first-mover advantage in crisis.”CFA Institute Market Integrity Insights, 30 August 2021
Poor liquidity was one of the main reasons Franklin Templeton gave for winding up the six schemes.
The underlying bonds held by the schemes were not very liquid. This made it difficult for the fund house to meet the sharp increase in redemption requests.
CFA Institute; Value Research
Where things stand
In June 2021, Franklin Templeton India said SEBI's ban on launching new debt funds would not affect its existing funds.
India president Sanjay Sapre said the fund house continued to manage more than ₹610 billion for more than 2 million investors in India.
Franklin Templeton later launched a new Franklin India Low Duration Fund. The fund remained open for subscription until 5 March 2025 at ₹10 per unit.
Dhirendra Kumar, chief executive of Value Research, said the SEBI order was a lesson for fund managers that managing liquidity is as important as managing risk and returns.
Market observers expected the order to bring greater discipline to the asset management industry. Industry participants also expected liquidity management and strict adherence to investment best practices to become more important relative to the pursuit of returns.
Reuters; Business Standard; Value Research
Closing note
Market data: Zerodha AfterMarket Report, 21 August 2026 close. Editorial: Mint Mumbai print edition, 24 August 2026. For information only; not investment advice.