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Mint
38 minutes ago
- Business
- Mint
As Southeast Asia disappoints, Japanese VCs turn to India for startup returns
BeyondNext Ventures, Enrission India Capital, Incubate Fund Asia and Genesia Ventures are among a handful of Japanese venture capital (VC) firms that are exploring India more aggressively as their investments back home and in southeast Asia fail to produce spectacular exits. The development is at a nascent stage, with most Japanese VCs continuing to sit on the fence, even as the ones that invest in India are keeping fund sizes as well as cheque amounts small. But Japanese VCs said India is increasingly coming on their radar. 'Japanese investors are realising that the southeast Asian market is a difficult market and India is an emerging market open for everyone," Nao Murakami, founder and general partner at Incubate Fund Asia and partner, investments at SMBC Asia Rising Fund told Mint in an interview. 'On top of that, the country's IPO market is booming." Last year, Incubate Fund Asia closed a $30-million fund with 80% of the capital going towards Indian startups. The firm has previously invested in startups such as Captain Fresh, Yulu, ShopKirana (which was recently acquired by Udaan) and Plum. This year, the company will begin raising its largest fund towards the end of the year, a $75-100 million fund with a focus on India, according to Murakami. Why India In the first half of 2025, Indian exchanges saw 119 companies going public, collectively raising ₹ 51,150 crore (approximately $6.1 billion), according to a S&P Global Market Intelligence report. In the same time period, southeast Asia's total has been much lower–53 IPOs raising over $1.4 billion, according to a report from Deloitte. In 2024, southeast Asia's primary markets saw approximately $3 billion being raised from 122 initial public offerings (IPOs), Deloitte data showed. In comparison, the Indian market raised $19.5 billion from 268 IPOs, according to a release from the National Stock Exchange (NSE). The biggest IPO from India last year was from Hyundai Motor India, which raised $3.3 billion. In southeast Asia, the biggest IPO in 2024 was a $531-million offering from Malaysia's 99 Speed Mart Retail Holdings Berhard–the country's largest public offering in seven years. Notably, it was the only IPO from the region last year that crossed $500 million. Who's investing Some other Japanese VCs are also pushing the accelerator in India, including BeyondNext Ventures, which entered the country in 2019. 'Back then, the idea was to get a taste, get some exposure. Now, we've decided to go full hog in India," the company's partner and head of India investments, Jay Krishnan, told Mint in an earlier conversation. So far, BeyondNext has backed 14 Indian ventures, according to Krishnan, but the capital for those investments came out of its Japan funds. Now, it is in the process of raising a $50-million India-focused fund from its Japanese limited partners. (LPs are people or entities who put money in venture funds.) Another Japanese firm, Enrission India Capital, allocated the entire $120 million it raised in Japan last year, to Indian startups. 'The feedback we've received from our Japanese LPs about their market is that it doesn't give great returns," said Harsh Deodhar, principal at Enrission India Capital. 'It's like India's fixed deposit story, it's just depleting and so they're looking for options." So far, the company has made 16 investments this year. Some of Enrission's recent investments include protein synthesis startup Loopworm, cleaning robotics company Peppermint Robotics and bamboo packaging startup Bambrew. Enrission tends to provide seed and pre-seed funding from $500,000 up to $1 million. For follow-on growth investments, funding can go up to $2 million. There are others as well. University of Tokyo Edge Capital led clean energy startup Aerem's ₹100 crore (around $12 million) Series A fundraising round. SMBC Asia Rising Fund was a part of a $35 million round in mortgage-tech startup Easy last year. Similarly, automobile manufacturer Suzuki is focusing on startups in agriculture, financial inclusion, supply chain and mobility spaces after it launched its first India-focused ₹340-crore fund in July last year. The most recent fund to expand focus to India is Genesia Ventures, which focuses on pre-seed and seed investments. The company is currently raising money for its fourth fund (GV-4) and has received $22.5 million from Japan Investment Corporation (JIC) as an LP investment. With the investment, the country's sovereign wealth fund says it 'will strengthen its support for partnerships between Japanese companies and local startups, with the aim of helping Japanese companies create new businesses and expand into new markets", according to its announcement. To be sure, several other Japanese VCs are still in wait-and-watch mode, but Murakami says that might be a function of how slowly Japanese firms tend to move. 'It's still slow, but it's faster than before. It's why the SMBC Asia Rising Fund is so important because one of the largest banking groups from Japan is putting $200 million to support Indian startups." Thesis for India In terms of sectors, banking and real estate have generally been favoured by larger institutional investors coming out of Japan. However, smaller funds, which have traditionally invested in sectors like fintech, consumer, and climate tech are now looking to emerging sectors like sustainability, deeptech and semiconductors. Apart from these sectors, BeyondNext is bullish on biotech. 'India can take an IT services approach to biotech because of the industries around it like vaccines, active pharmaceutical ingredient manufacturing, generic pharma. All those will have second-order effects on new innovation coming up," said Krishnan. Given its ties with larger Japanese corporations, BeyondNext wants to tap those links to bring Indian startups to Japan, where they can benefit from R&D help and then take their products global and into markets like the US. Meanwhile, Enrission is fairly sector agnostic. 'We're constantly discussing with our LPs, asking them what they like, what they want to invest in. Currently, there's interest in the consumer space," said Deodhar. Loopworm and Peppermint Robotics, in which the firm made investments in the first quarter of FY26, are deeptech plays. Most of the smaller funds are entering Indian startups early, taking a larger chunk of equity, and are willing to sit on their stake until the company goes public or is acquired for a substantial sum. It's why deeptech has emerged as a new go-to sector for Japanese funds. Incubate Fund Asia has traditionally invested in fintech and consumer companies, offering cheque sizes ranging between $750,000 and $1 million. Going forward, they will target sustainability as well, according to Murakami. 'In the fourth fund, cheque sizes will be bigger. We'll probably do between $1 million and $1.5 million and then double down later," he said. For growth-stage investments for breakout companies, the Incubate Asia Fund taps SMBC's Asia Rising Fund, which is currently sized at $200 million. Through the lifecycle of the new fund, portfolio construction will remain the same, with the firm investing in 15-20 startups. This time around, they'll be setting up the fund in India itself, instead of in Japan, though the fundraise will happen from Japanese LPs. The company is currently building its thesis around deeptech, defence and semiconductors. 'Earlier people were sceptical, but people are seeing the success of companies like Pixxel and AgniKul and their ability to pivot, scale and generate value is opening up sectors," said Rajeev Ranka, partner, India investments at Incubate Fund Asia and SMBC Asia Rising Fund. 'Defence is another category where India is for the first time becoming the consumer rather than investor."
Business Times
a day ago
- Business
- Business Times
Record short against Maersk backfires in trade-war defying rally
[COPENHAGEN] Shorting the stock of the world's largest listed shipping company during a global trade war may seem like a sure bet. But the investors who've loaded up on the trade since April have so far only been handed big losses. Shares representing just under a third of AP Moller-Maersk's free float are currently out on loan, according to S&P Global Market Intelligence, the highest level since data collection began in 2014. The measure, which is indicative of short interest, is up from about 15 per cent at the beginning of April, when US President Donald Trump announced sweeping plans for import duties on all US trading partners. After an initial plunge when tariffs were announced on Apr 2, the shares are now up about 50 per cent since early April and the Copenhagen-based company seems to be showing little sign that the restrictions are hurting its business. On Aug 7 it raised its 2025 financial forecast, citing resilient global transport demand outside the US. A Maersk spokesperson declined to comment on the share price and the short position in the stock. 'The short interest is basically speculation that tariffs will cause the global economy to slow down a gear, but we just haven't seen that happening yet as the wheels are still turning,' Lars Hytting, an investment strategist at asset manager ArthaScope, which holds Maersk shares, said by phone. 'And Maersk just shows it's best-in-class in a situation like this one.' The trade war is still in its infancy, so there is plenty of time for the short bets to come good. Trump only finalised trade deals with many US partners in recent weeks and some talks are still ongoing. Maersk has warned that tariffs will be negative for its business if consumer confidence declines and consumption slumps. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up A majority of analysts covering the stock are downbeat on the longer term prospects for the company, with the average 12-month price target indicating a decline of some 15 per cent. Still, Maersk chief executive officer Vincent Clerc has repeatedly pointed out that one of the reasons tariffs will not stop global trade is that many products are impossible or very difficult to substitute with local alternatives. As an example, almost all of the world's sneakers are made in just three countries – China, Vietnam and Indonesia – and it would be costly and take years to set up production in the US. 'Things have become more volatile and complex, but this is giving us some enormous opportunities,' Clerc said during an Aug seven presentation in Copenhagen. 'It gives us a positive potential for our logistic business, because the more complicated things are and the more supply chains need to change, the more valuable we become to our customers.' Maersk's ability to thrive during the biggest attack on free trade in decades is the just the latest example of a seemingly negative global event that has ended up benefitting the shipping industry. When transit through the Red Sea was disrupted in late 2023, forcing container lines to sail south of Africa, freight rates jumped because the extra journey effectively reduced the global shipping fleet by 7 to 8 per cent. A similar imbalance to supply and demand was triggered in 2021 when a massive container ship blocked the Suez Canal, helping the industry. And during the Covid pandemic, shipping shares initially fell, before investors understood that lockdowns were a boon for container lines, which benefited from increased demand for consumer goods. According to data from the Danish Financial Supervisory Authority, Marshall Wace was the only hedge fund with a Maersk short position exceeding the reporting threshold of 0.5 per cent of the total share capital, at 0.59 per cent, when the company raised its outlook last week. A spokesperson for Marshall Wace declined to comment. Mads Zink, Danske Bank's head of equities in Denmark, said that the Maersk stock is being shorted because of its current high valuation and because some are using it as a bet that tariffs will harm global trade. 'It may be that their thesis was correct, but the share price hasn't developed the way they might have hoped for over the summer,' Zink said by phone. 'So far, those who have shorted the stock haven't been proven right.' BLOOMBERG
News18
17-07-2025
- Business
- News18
371 Companies Bankrupt In 6 Months. Is Trump's America Slipping Into Recession?
Last Updated: In 2025, company cash reserves worsened as steady Fed rates, rising debt, and weak spending added pressure, deepening the financial strain across sectors US President Donald Trump is imposing reciprocal tariffs on other countries in a bid to improve America's economic condition. The nation's debt has soared to a staggering $37 trillion, indicating a dire economic situation. Many large and medium-scale companies in the US are currently grappling with severe financial crises. Consequently, 371 companies have applied for bankruptcy in the first half of 2025, marking the highest number of applications in the first six months of any year since 2010. In June 2025 alone, 63 new companies filed for bankruptcy. In 2024, a total of 688 major companies sought bankruptcy protection in the US. In the first half of 2024, 335 companies went bankrupt, followed by 353 in the second half. According to S&P Global Market Intelligence, these figures encompass public and private companies with assets or liabilities of at least $2 million and $10 million, respectively. These statistics underscore the mounting financial pressure in the US economy. The cash position of companies has deteriorated further in 2025. The Federal Reserve's decision to maintain stable interest rates, coupled with rising debt levels and declining consumer spending, has exacerbated the burden on companies. Additionally, stagnation in the job market, high inflation, and tariffs imposed by the Trump administration are adversely affecting economic activities. Top Companies That Sank in June Wolfspeed Inc., a semiconductor manufacturing firm, announced on June 22 that it has entered into a restructuring agreement with its lenders, aiming to reduce its debt by approximately $4.6 billion and decrease annual cash interest payments by 60%. The company's bankruptcy filing is part of the plan's implementation. Sunnova Energy International, a solar energy services provider, plans to sell some of its assets and operations through the bankruptcy process, citing rising interest rates, changes in laws, and prioritising growth over debt repayment as key reasons for its financial troubles. Similarly, Mosaic Sustainable Finance Corp., which offers financing for energy efficiency and solar energy-related home improvements in the US, attributed the economic slowdown and the expiration of the solar energy tax credit as significant factors impacting its business. view comments First Published: Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Yahoo
17-07-2025
- Business
- Yahoo
Copper prices have surged to record highs — and they could jump higher. Here's why
Copper is at the core of the American economy. It's in the wires of our pervasive electronics, in the walls of homes and in the engines of cars. Experts say President Donald Trump's plan for tariffs on the red metal could stymy the goal of boosting American manufacturing while potentially igniting inflation. Trump's July 8 announcement of a 50% tariff on copper imports beginning August 1 sent prices surging 13% in one day, up to a record high of $5.69 per pound. It was the biggest single-day increase in copper prices on record going back to 1968, according to FactSet. And those prices could just be a sign of things to come. A 50% tariff would be a 'massive tax on consumers of copper,' Ole Hansen, head of commodity strategy at Saxo Bank, said in a note. While Trump says his copper tariff is needed to spur domestic production due to national security concerns, there is no quick fix. The US imports over 50% of the copper it needs, primarily from South America, Hansen said, 'with no clear path to improving that for years to come.' That's because it takes almost 32 years, on average, from the discovery of mineable copper in the US to production, according to S&P Global Market Intelligence. And the end result of a big and fast copper tariff could simply be higher prices for many items, economists say. 'A tariff-induced price premium risks making copper—and by extension, US manufacturing and infrastructure—materially more expensive,' Hansen said. Copper is highly conductive, making it a critical input for electrical and electronic products. Copper can be found in the chips in mobile phones, plumbing in houses and in the engines of cars. 'This is a vital metal for everyday use,' Rob Haworth, senior investment strategy director at US Bank's asset management group, told CNN. 'You probably don't go a day where you haven't used something that has copper in it.' As Trump's self-imposed August 1 tariff deadline approaches, businesses and investors don't know what will happen in the wake of a massive tariff on a key component of the economy — let alone if the president will follow through with it at all, considering his history of backing off tariff threats. Widespread impact Copper is one of the most widely used metals in the world. The typical American-made car has over 50 pounds of copper, according to the Copper Development Association, a trade group. And the price of copper has been rising in recent years. The growing market for electric vehicles and the expansion of data centers thanks to the artificial intelligence boom have helped drive global demand for copper. Copper prices this year have smashed through previous records amid Trump's threat of tariffs. Copper futures in New York have soared almost 39% this year, outpacing the S&P 500's 6% gain, bitcoin's 24% gain and gold's 26% gain. Trump's tariffs on metals, including steel and aluminum, are intended to bolster US supply chains. His administration also cited national security concerns for levying a tariff on copper. But an import tax on copper would raise production costs for manufacturers in industries including construction, electronic goods and automobiles, according to Grace Zwemmer, an associate economist at Oxford Economics. 'All these tariffs raise costs and therefore injure downstream manufacturing,' Maurice Obstfeld, a professor of economics at UC Berkeley and member of former president Barack Obama's council of economic advisers, told CNN. 'For the US, this seems like a fairly pointless act of self-harm,' Obstfeld added. Businesses would face higher costs because there aren't many viable substitutes for copper, according to Brandon Parsons, a practitioner of economics at Pepperdine Graziadio Business School. While aluminum can be a substitute, it is more flammable and does not have the same conductivity, making it less viable for using in items like semiconductor chips. 'There isn't really a good way for businesses or consumers to avoid these higher costs,' he said. 'It's going to be felt widespread through the economy.' Where does the US get its copper? Chile, Canada and Peru provided over 90% of US copper imports in 2024, according to the US Geological Survey. The United States in 2024 mined an estimated 1.1 million tons of copper, according to the US Geological Survey, meeting just under half of its consumption. Arizona was home to more than 70% of domestic copper production in 2024. Shifting economic incentives in the modern era and the opening of free trade have both contributed to a decline in US copper production, according to Pepperdine's Parsons. The United States in recent decades has produced less copper as the global economy liberalized, enabling the country to import relatively cheap copper from countries like Chile and allowing the US economy to expand to other industries. Industrial buyers and Wall Street traders in recent months have shipped enormous amounts of copper to the United States to get ahead of potential tariffs. Morgan Stanley estimates 400,000 tons, or roughly six months' worth of 'extra' copper was front-loaded and delivered to the US in the early months of 2025. The copper stockpiles could 'temporarily buffer' the market when tariffs go into effect, according to Ewa Manthey, a commodity strategist at Dutch bank ING. However, the buildup of copper won't last forever, and it'll be difficult for the US to produce enough copper domestically. At some point, the US will likely need to import more copper under the 50% tariff, which could risk a resurgence in inflation, Manthey said. 'Higher copper prices also risk higher inflation, raising costs for US manufacturers without a domestic alternative available,' Manthey said. How would tariffs impact you? It remains to be seen whether companies will absorb the higher costs or pass the costs onto consumers in the form of higher prices, although economic theory suggests businesses would pass on higher costs to consumers when possible. Wall Street and corporate America have been expecting tariffs on copper — just not 50%. 'Investors were caught off guard, as the market had been expecting a much lower tariff rate,' Adam Turnquist, chief technical strategist at LPL Financial, said in an email. Smaller tariff rates such as 10% can be used strategically to encourage domestic manufacturing, economists say. But a rate as high as 50% could send a shock to markets, even leading to a drop in demand because prices are just too high. That could lead to slower economic growth across industries, such as a lull in home building. Plans to revive manufacturing and address national security concerns Trump has espoused using tariffs as a means to boost US manufacturing. But tariffs are not a panacea that will revive the manufacturing industry, Pepperdine's Parsons said. 'The rationale for this is to encourage production and investment in copper in the United States,' Parsons said. 'The issue is it's not like producing water, where you just open up the faucet. It could take years and years to open up a new copper mine, or even to expand production. So, while this does provide some incentive, it's something that's more long-run. You're going to feel the short-run pain.' Incentives like direct government subsidies or credits could promote domestic production of copper and fortify US supply chains, according to Parsons. While tariffs can help domestic companies sell more in the market, the higher prices can create unwanted ripple effects throughout the supply chain. Trump in February signed an executive order opening a Section 232 investigation into copper imports. That section of the 1962 Trade Expansion Act gives the president the authority to impose import duties to protect industries deemed vital to US national security. 'The United States faces significant vulnerabilities in the copper supply chain, with increasing reliance on foreign sources for mined, smelted and refined copper,' the executive order said. A Section 232 investigation comes with a 270-day deadline for an investigation, which means the Trump administration had until November to complete its review of copper, according to ING's Manthey. 'There are many foreign suppliers of copper, including close allies like Canada, so a national security rationale seems contrived,' Berkeley's Obstfeld said. Trump said in a social media post on July 9 confirming his intent to impose tariffs on copper that the metal is the second most-used metal in the Defense Department. But copper was not one of the 50 critical minerals designated by the US Geological Survey in 2022. The US Geological Survey is expected to publish an updated classification list for critical minerals this year. However, copper is considered a 'critical material' for energy, according to the Energy Department. 'The US has very limited current mining capacity,' Obstfeld said. 'It will take a decade or more to onshore copper production substantially. That will still leave copper prices much higher in the US, and in the meantime, American consumers and businesses will suffer even more.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Time of India
09-07-2025
- Business
- Time of India
Indian banks gain market cap in Q1FY26 despite credit growth slowdown
Indian banks gained in market capitalization in the April-June quarter as falling interest rates and liquidity likely attracted investors. However, slowing credit growth and global uncertainties may pose a challenge in the coming months. According to S&P Global Market Intelligence data, 18 of the top 20 Indian lenders, including India's three biggest lenders, increased their market cap. HDFC Bank added 9.70% in market cap to remain India's biggest bank by the measure. HDFC's private sector peer ICICI Bank gained 7.43% in market cap, while State Bank of India , the biggest Indian lender by assets, gained 6.33% in market cap, as per S&P Global Market Intelligence data. India's benchmark Nifty 50 index added 8.5% during the quarter. The Nifty Bank index, which tracks the most liquid and biggest banks in India, rose 11.1% over the same period. Global sentiment for equities improved in recent weeks on hopes that US President Donald Trump's planned tariff measures against key trading partners would be less disruptive to global supply chains than previously thought. Still, loans and deposit growth in India have slowed, which could pressure bank margins amid falling interest rates. The Reserve Bank of India said on June 25 that credit growth of commercial banks fell to 9.9% year over year in May from 16.2% a year ago. The central bank expects the nation's GDP to grow 6.5% in the fiscal year that started April 1, a pace similar to the previous year. The central bank has cut its benchmark interest rate by 100 basis points since February. The central bank has also taken a series of measures to boost liquidity in the banking system, including reducing the ratio of deposits that banks must set aside as cash. Banks, too, have cut the interest rates they pay on deposits and have indicated that stress may be peaking in unsecured retail loans, Nomura said in a June 25 note. "Over the past few months, the RBI has taken significant measures to enhance system liquidity and ease regulations to drive credit growth. We expect system credit growth to improve to 12% by the end of the current fiscal year in March 2026," Nomura said. AU Small Finance Bank posted the biggest gain in market cap during the April-June quarter, up 53.05%. IndusInd Bank added 34.20% to its market cap during the quarter, recovering from a sharp fall after the lender admitted to accounting lapses earlier this year. Kotak Mahindra Bank ranked fourth in India by market cap, posted a 0.35% decline. State-owned UCO Bank booked the biggest loss during the quarter with a market cap decline of 9.24%, according to Market Intelligence data.
