Exactly six years ago, the Covid-19 virus swept through the world. Entire economies came to a grinding halt. Hundreds of thousands of lives were lost and millions more disrupted. Factories, offices, and shopping centres shut down. Some of those switched to remote working. But some couldn’t. And that changed how we consumed products and services.
Anyone who could afford began to order everything online—from food and clothes to movies and music lessons. Education went online, too, as schools, colleges, and India’s vast coaching industry closed. Edtech startups boomed, attracting millions of dollars in funding from private equity and venture capital investors spread across the world—from Japan’s SoftBank to Singapore’s Temasek and US-based Blackstone and Tiger Global. Until the wheels stopped turning.
The reopening of schools and colleges crashed demand for purely online learning. Most edtech companies, which had gone on a shopping spree buying smaller peers and expanding their business with help from investor money instead of their own cash flows, began to feel the tremors. Valuation cuts, layoffs and asset sales accelerated. Byju’s, which once commanded a valuation of $22 billion, went bankrupt about two years ago. And now, another one is biting the dust with media entrepreneur Ronnie Screwvala’s upGrad is acquiring Unacademy in an all-stock deal.
At its peak in 2021, Unacademy was valued around $3.5 billion. Since then, its valuation has crashed more than 85% to below $500 million. That means many of the investors who poured a total of more than $850 million into the startup burnt their fingers. And they won’t still get any cash in hand even now given that it’s an all-stock acquisition.
The deal suggests that recovery in the edtech sector is not taking the form investors once expected. Instead of companies adjusting with leaner operations and a renewed focus on profitability, what is emerging is consolidation.
With Byju’s gone and Unacademy folding up, upGrad is now one of two major players left standing. The other one is PhysicsWallah, a profitable startup that went public in November last year and currently commands a market capitalisation of over Rs 24,800 crore even after its shares have fallen 20% below the IPO price.
upGrad’s all-stock takeover of Unacademy suggests also that cash remains constrained and that growth is no longer being financed by private equity investors. This marks a shift in how capital is being deployed – from funding-led growth to balance-sheet-driven consolidation. This consolidation reflects both operating realities and tighter funding conditions.
At the same time, a new layer is entering the narrative. Both Unacademy and upGrad have emphasised an AI-led approach to learning, alongside efforts to improve personalisation and outcomes. The timing is notable. Just as capital becomes more selective and business models are tested for durability, a new technological promise enters the room.
Whether that promise translates into measurable improvement or becomes another way to frame growth remains uncertain. But the direction of adjustment is clear. The earlier phase of expansion, driven by readily available capital, has given way to one where scale is being reconfigured under tighter constraints.
Markets often move through cycles of expansion and correction. What follows is not always a return to previous structures, but the formation of new ones. The question is less about whether capital will return and more about the terms on which it does – and how businesses adapt to meet those terms.
Banking on the Right Signals
Startups and their investors aren’t the only one going through a moment of turmoil. HDFC Bank, one of India’s largest companies, and its investors faced a similar shock this week when part-time chairman and independent director, Atanu Chakraborty, resigned, citing concerns that certain practices at the bank were not aligned with his personal values.
The reaction was swift. Shares of India’s biggest private-sector lender fell nearly 9% at one point, erasing over Rs 1 trillion in value before partially recovering. The sharp drop was notable, particularly because Chakraborty didn’t make any explicit allegations of wrongdoing.
Interim chairman Keki Mistry said that there were no governance or operational issues at the bank and that Chakraborty’s exit could be due to a rift between him and the management team. The Reserve Bank of India also noted no material concerns and highlighted the bank’s capital strength and liquidity.
Still, there is a degree of sensitivity embedded in financial stocks that often remains invisible – until it is not. Large, systemically important institutions tend to trade on an assumption of stability: that governance is steady, oversight is continuous, and internal differences do not disrupt external confidence. That assumption, however, can be fragile.
The HDFC Bank episode creates a divergence between signal and interpretation. On one hand, markets reacted to the possibility of undisclosed governance concerns – an area where uncertainty tends to be priced quickly and often disproportionately. On the other hand, responses from both the bank and the regulator have been measured.
Markets often move faster than information can be clarified, particularly when the signal relates to governance rather than operations. There is also a structural layer to this response. As a systemically important bank, expectations of stability are higher, and tolerance for ambiguity is lower. Even a limited signal can trigger a broader reassessment of risk.
For now, the episode reflects how markets respond to what is not.
Blowing It All Up
If governance uncertainty tests confidence at the institutional level, energy shocks do so at a system-wide level.
The recent escalation in West Asia marks a shift in where markets are focusing their attention. Until now, much of the concern had been around transit – particularly the disruption of flows through the Strait of Hormuz. That focus is now moving further upstream.
Israel’s strikes on Iran’s South Pars gas field and Iran’s retaliatory attacks on Qatar’s Ras Laffan industrial complex – home to the world’s largest LNG facilities – suggest that energy infrastructure itself may be becoming a target.
The immediate impact has been visible in prices. Brent crude has moved past $110 per barrel, while natural gas prices have also risen sharply. But the more important shift lies in the nature of the disruption being priced.
Transit bottlenecks, while significant, are often seen as temporary. Production and processing infrastructure introduce a different kind of uncertainty. Damage to facilities can take longer to assess – and even longer to restore – extending the timeline of disruption well beyond the duration of the conflict itself.
This is particularly relevant in the case of Ras Laffan. Qatar accounts for a substantial share of global LNG supply, and the concentration of its export infrastructure in a single location makes any disruption more consequential. Early indications of damage and production suspension raise questions about how quickly supply can normalise, even if hostilities ease.
For energy-importing economies like India, the exposure is direct. A significant share of LNG imports comes from Qatar, much of it routed through Hormuz. With both supply and transit under strain, the margin for adjustment narrows.
At the same time, the broader trajectory of the conflict remains uncertain. Statements from the US suggest an attempt to limit escalation around critical infrastructure, but the extent to which that constraint holds is unclear.
Markets are, in effect, trying to assess whether this remains a disruption or evolves into a more sustained supply shock. The distinction matters because supply chains can adjust but production shocks are harder to absorb.
Greener Pastures
While the war in West Asia is heating up, one energy company back home is keeping calm and going about its business. That company, as you may guessed already, is billionaire Mukesh Ambani’s Reliance Industries.
While Reliance still hasn’t commented on US President Donald Trump’s announcement last week that it would invest in a Texas refinery, it announced a $3-billion agreement to supply green ammonia to South Korea’s Samsung C&T.
The agreement marks a shift from capacity announcements in segments related to energy transition toward offtake commitments. It signals a willingness to lock in supply despite unresolved economics.
Investor sentiment around the energy transition has, at least for some time now, been defined by a mix of conviction and distance. The direction has felt clear – capital will move, technologies will scale. But the translation into visible, contracted demand has remained uneven. Much of the optimism has rested on projections. The assumption embedded in markets has therefore been that green hydrogen and ammonia would take time to move from policy ambition to commercial reality. Demand was expected, but not yet anchored. That assumption is beginning to face early tests.
In emerging energy markets, projects become viable when demand is contracted. Early agreements begin to make future revenues more legible, allowing capital to move from intent to allocation. Markets often move first and explain later. At the same time, the transition remains incomplete. The cost gap with conventional fuels persists, infrastructure is still evolving, and demand across end-use sectors remains uneven. Policy support plays a central role in bridging these gaps.
This often creates a tension in interpretation. On one hand, early offtake agreements suggest parts of the demand curve may be forming sooner than expected, shifting the conversation from narrative to visibility. On the other, the broader ecosystem remains fragmented, raising the possibility that these are selective alignments rather than the beginning of scale.
Markets are still trying to assess which of these is closer to reality. The distinction matters in this case because it shapes how risk is priced. If demand becomes contract-driven, the sector may gradually move toward cash-flow visibility. If not, expectations risk running ahead of execution. For now, what is visible is a shift at the margin – from intent to early commitment. What remains unclear is how widely, and how sustainably, that shift extends.
Market wrap
India’s stock markets ended little changed this week, as gains earlier in the week as well as on Friday thanks to bargain buying offset a steep drop on Thursday.
The Nifty 50 ended the week down only 0.16% while the Sensex closed 0.04% down. On Thursday, however, the benchmarks had slumped 3.3% each—their worst session since June 2024—due to concerns related to the war in West Asia and a drop in HDFC Bank.
Heavy foreign outflows also weighed on stocks. NSDL data shows that foreign portfolio investors have sold stocks worth Rs 88,180 crore so far in March.
In the broader market, as many as 10 of the 16 major sectors recorded weekly losses.
HDFC Bank, the benchmarks’ top weighted stock, fell 4.5% this week after its part-time chairman resigned abruptly. Overall, Shriram Finance was the biggest Nifty loser, falling 6.5%. Bajaj Finance, Bajaj Finserv, and ICICI Bank were among the other financial stocks that slipped.
A number of defensive stocks also ended lower this week. These included drugmakers Cipla and Sun Pharma, hospital chains Apollo and Max Healthcare, and FMCG companies Hindustan Unilever, Tata Consumer, Nestle India, and ITC.
IT stocks were mixed, with Wipro and TCS falling but Infosys, Tech Mahindra and HCL Tech rising.
Gainers were led by Zomato parent Eternal and Tata Steel, which surged more than 7% each. Auto stocks mostly ended higher after declining in recent weeks. Mahindra & Mahindra jumped 4.6% while Eicher climbed 2.5%.
The list of gainers also included heavyweight Reliance Industries, JSW Steel, UltraTech, Bharti Airtel, Trent, and Grasim.
Other Headlines
- US Federal Reserve keeps interest rates unchanged, indicates inflation could rise
- Reliance Jio hires 17 investment banks for IPO; won’t raise new funds
- SBI Funds Management files for IPO; State Bank of India, Amundi to offload 10% stake
- Walmart-backed PhonePe pauses IPO plans due to stock market volatility
- Govt of India in talks with Russia, Belarus, Morocco to boost fertiliser imports
- Cabinet approves Rs 33,660 crore to develop 100 industrial parks to boost manufacturing
- OpenAI to fold ChatGPT, coding platform Codex and browser into single desktop “superapp”
- World trade growth to slow to 1.9% this year, Iran war may weigh more: WTO
- Axis Bank to invest Rs 1,500 crore in its consumer lending arm Axis Finance
That’s all for this week. Until next week, happy investing!
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