India has a long list of famous—or infamous, rather—white-collar fugitives. These include Nirav Modi, Mehul Choksi and Vijay Mallya. And then there are the relatively lesser-known brothers Nitin and Chetan Sandesara.
While Modi, Choksi and Mallya remain entangled in the legal web, the Sandesara brothers this week got a chance to wipe the slate clean. But first, who are the Sandesaras and what did they do?
For years, the brothers were the poster boys of a high-flying business empire spanning pharmaceuticals to oil drilling. They were known also for throwing lavish Bollywood-star-studded parties in their heyday. But they are prime accused in the Sterling Biotech loan fraud case and stand accused of duping a consortium of banks of $1.6 billion.
They skipped India in 2017 on Albanian passports as investigators closed in after Sterling Biotech started showing financial distress. They deny wrongdoing, of course, but their sudden departure and subsequent designation as “fugitive economic offenders” (a label they share with Nirav Modi and Mallya) tell their own story.
Meanwhile, their oil business prospered in Nigeria so much so that a newspaper report said Sterling Oil contributes 2.5% to the African country’s federal revenue.
This week, the Supreme Court ordered quashing of all criminal proceedings against the promoters of Sterling Biotech if they coughed up a settlement of Rs 5,100 crore (around $570 million) by December 17.
Why did the Supreme Court make an exception for the brothers? In this case, the court essentially decided that recovering thousands of crores for public-sector banks was a higher priority than staging a prolonged courtroom saga. Invoking its rarely-used extraordinary powers under Article 142 of the Constitution, the Supreme Court brokered a deal: pay up big, and we’ll wipe the slate clean. The court noted the arrangement was blessed by the government itself – the Solicitor General of India proposed the Rs 5,100 crore figure in a sealed envelope, signaling that authorities would have “no objection” to dropping charges if that money came through.
The logic was that if public money could come back, pursuing criminal trials would serve no useful purpose. In other words, why spend years chasing a legal victory that might yield only moral satisfaction, when a hefty cheque can reimburse at least part of the losses now?
Will this court decision put a smile on Vijay Mallya’s lips as he, too, has been offering to clear his dues?
To be sure, the court insisted this was a one-off, born of the “peculiar facts” of the Sandesara saga and “not to be treated as precedent”. It helped that the brothers had already coughed up over Rs 3,500 crore in partial repayments and that banks had clawed back another Rs 1,100 crore by selling seized assets. Chasing the fugitives across jurisdictions was proving as futile as assets worth Rs 9,800 crore were attached overseas but remained largely out of reach due to uncooperative foreign authorities.
Nevertheless, the court’s decision is unprecedented. While it has received applause for its pragmatism, it has also given rise to apprehension that monetary muscle might replace the quest for justice in other fraud cases.
Nickel and Dime
Talking about fraud, another Indian businessman has been in the news for similar reasons for the past couple of weeks. The big difference is that this particular gentleman is accused of defrauding a multinational corporation and not Indian banks, although he had allegedly done that already before moving on to global targets.
The man we are talking about is Prateek Gupta, who is fighting charges of scamming Geneva-based commodities trading giant Trafigura in the London High Court.
Trafigura’s $600-million case against Gupta over fake nickel cargoes began in London last week and hearings continued this week. The commodities trader says Gupta masterminded a fraud in which his companies agreed to provide 99.8% pure nickel but delivered low-value and even worthless materials instead.
The alleged fraud first came to light about three years ago when Trafigura received complaints about certain cargoes it had sold. This led Trafigura to inspect some containers in Rotterdam that were supposed to contain high-grade nickel. The inspections found that the containers held carbon steel, which was worth a fraction of the value of nickel.
After further investigations, Trafigura booked a $590-million charge and sued Gupta in February 2023. Trafigura says it managed to recoup just about $10 million from trades worth more than $500 million, resulting in massive losses.
Surprisingly, Gupta doesn’t deny he delivered worthless cargo. While testifying remotely from Dubai, where he is now based, he admitted that his companies were running out of money in March 2021, partly due to the Covid-19 pandemic.
But here’s the twist. He claims that some Trafigura executives devised the scheme involving more than 500 trades valued at $3.3 billion, apparently in an attempt to boost the company’s share in global nickel trading, especially after the pandemic and Russia’s invasion of Ukraine in 2022 sent prices of the metal soaring.
Trafigura, of course, denies Gupta’s claims and says his defence is just “fiction”.
Gupta has also acknowledged he was being investigated for fraud in India but denied those allegations, too. In India, Gupta’s company Ushdev International was part of the Reserve Bank of India’s second list of top-30 defaulters. It owed more than Rs 3,500 crore to its lenders when the State Bank of India filed insolvency proceedings against it in 2017.
MPC Meeting
Moving on to some economic news, the Reserve Bank of India’s Monetary Policy Committee (MPC) will next week decide whether it’s time to cut interest rates, and borrowers have reason to be hopeful.
For starters, retail inflation, the MPC’s primary mandate, has dropped to historic lows. October’s headline inflation came in at just 0.25%, well below even the lower limit of the RBI’s target range of 2-6%. While the MPC tends to focus more on future inflation projections, even those look benign despite the expected low base effects in coming months. Core inflation, which excludes volatile food and fuel prices, remains a little over 4%, but that’s largely due to high gold prices, something the RBI has limited control over.
Second, the central bank has already hinted at the possibility of a rate cut. In its last policy statement, the RBI noted that there was space to ease rates when conditions allowed. Governor Sanjay Malhotra reaffirmed this stance just last week.
Third, the US Federal Reserve has also signaled that a rate cut may be on the horizon. That matters for India: when US rates fall, the interest rate differential between Indian and US bonds widens again, helping to stem capital outflows. This is particularly relevant now, as the rupee has come under renewed pressure. Market chatter suggests the currency would have breached the 90-per-dollar mark if not for RBI’s recent interventions.
But that intervention has not gone unnoticed. This week, the International Monetary Fund reclassified India’s exchange rate regime from a “stabilised arrangement” to a “crawl-like arrangement,” implying the rupee is being gently steered rather than freely floating. While that may be a technical distinction, the optics matter. A truly independent float is seen as a sign of monetary maturity.
There is only one factor that may play on the minds of MPC members before cutting rates. Does it need to? The rates are cut to give a fillip to economic growth, but the recent GDP figures have been heartening.
In this context, next week’s MPC meeting is more than just a rate call. It’s a balancing act between preserving inflation credibility, managing currency stability, and making sure growth stays buoyant.
Buoyant GDP
Coming back to growth, the July–September GDP numbers offer a welcome dose of optimism for economic watchers. At 8.2%, real GDP growth surprised nearly everyone. Most economists had pencilled in a sub-7.5% print, and the RBI had kept its own projection at 7%. This is now the strongest quarterly reading in six quarters, powered largely by a sharp rise in manufacturing, which expanded 9.1%. Services, too, remained resilient with tertiary-sector growth of 9.2%.
Agriculture was the lone soft spot, growing 3.5%.
Nominal GDP growth, however, eased slightly to 8.7% from 8.8% in the April–June quarter. For readers who like to track the layers, real GDP is essentially nominal GDP minus the inflation effect. This could be one of the factors MPC may note in its next week’s meeting on rate decision.
Bond markets seemed to think not. The 10-year government security yield climbed nearly 4 basis points to 6.54% right after the data release, signalling expectations of a more cautious policy stance.
Household spending also showed healthy traction. Private Final Consumption Expenditure (PFCE) rose 7.9%, improving from 6.4% a year earlier.
What makes the headline number even more heartening is that it comes despite India’s external sector taking a knock from the tariff actions imposed by the US. The fact that growth held up without export support underlines the economy’s domestic strength.
For the first half of FY26, real GDP has now grown 8.0%, up sharply from 6.1% in the same period last year. Real GVA, a cleaner measure of domestic economic activity, grew 8.1% in the July–September quarter compared with 7.6% in the preceding quarter.
Market Wrap
Stock market benchmarks touched new all-time highs this week thanks to an improvement in corporate earnings, strong economic growth, and expectations of interest rate cuts by the RBI and the US Federal Reserve.
The Sensex crossed 86,000 for the first time, hitting an intra-day record of 86,055.86 on Thursday, while the Nifty 50 touched a new intra-day high of 26,310.45 the same day. But both indices closed the day a tad lower.
Still, the two benchmarks gained 0.5% each for the week and about 2% in November. This is the third monthly increase in a row and takes their total gains to 7.3%. The mid-caps also rose 2% in November but the small-caps slipped 3%.
As many as 11 of the 16 major sectors recorded gains in November, led by the 4.7% jump in the information technology index. The auto index revved up almost 3.6%, thanks mainly to Mahindra and Mahindra.
Heavyweight Reliance Industries climbed 5.5% this month while Asian Paints surged 14.5% in November. On the other hand, Zomato parent Eternal and Zudio operator Trent were the top losers, falling almost 10% each.
For the week, the biggest winners were Hindalco, Tech Mahindra, Shriram Finance and Bajaj Finance with gains of 3-4% each. Sun Pharma, Adani Ports, Wipro, Bajaj Auto, Bajaj Finserv and JSW Steel were the other top performers.
Adani Enterprises fell the most this week, followed by Bharti Airtel, SBI Life and Power Grid Corp. Trent, Max Healthcare, Nestle India, Tata Motors Passenger Vehicles were the other major laggards.
Other Headlines
- Reliance Industries JV to invest Rs 98,000 crore for 1 gigawatt AI data capacity in Andhra Pradesh
- E-commerce firm Meesho sets price band of Rs 105-111 for IPO, targets Rs 50,100 crore valuation
- ICICI Prudential Asset Management Company likely to launch $1.2 billion IPO in December
- Electronics contract manufacturer Zetwerk hires investment banks for IPO
- Singaporean energy company Sembcorp plans IPO of Indian unit
- SEBI approves IPOs of Fractal Analytics, Amagi Media Labs, Sahajanand Medical
- Mahindra & Mahindra launches seven-seater electric SUV called XEV 9S
- IMF reclassifies India’s foreign exchange regime as ‘crawl-like’ from ‘stabilised’
- Govt approves Rs 7,280 crore rare earth permanent magnets manufacturing programme
- Ethiopian volcano ash forces Indian carriers Air India and Akasa Air to cancel flights
- JP Morgan says interest rate cuts, tax breaks could lift Nifty 50 to 30,000 by end of 2026
That’s all for this week. Until next week, happy investing!
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