Adia anchors Kotak’s real estate fund and Acme’s QIP

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WHAT WE’RE TRACKING TODAY

USD 1 bn fund to subsidize ATF as airlines cut routes + Bond taxes scrapped to draw foreign capital

Good afternoon, lovely people. We are closing out the week with a heavy focus on the policy maneuvers New Delhi is deploying to shield the economy from the fallout of the regional conflict.

The big story today: Abu Dhabi’s sovereign wealth fund continues its deep dive into the Indian market, writing a USD 675 mn check to anchor Kotak's new real estate fund while also backing Acme Solar’s qualified institutional placement (QIP).

BUT FIRST- The latest war updates: An Indian national was killed and 13 others injured in an attack on Kuwait International Airport on Wednesday. The attack was the first fatal incident in the Gulf since the 8 April ceasefire between Iran, US and Israel. The strike caused extensive damage to the terminal and left dozens injured despite ongoing diplomatic efforts to preserve the truce.

India shields airlines from fuel shock

USD 1 bn support for airlines: The Indian government is establishing an INR 100 bn (USD 1.05 bn) financial buffer to subsidize aviation turbine fuel (ATF) as the ongoing conflict in the Middle East drives up regional energy costs, according to a Civil Aviation Ministry press release.

The mechanics: The government will issue no-interest credit to oil marketing companies to bridge the widening variance between volatile, market-linked international jet fuel benchmarks and the controlled rates offered to commercial carriers. This move is meant to support domestic and international air carriers in offsetting higher input costs. Aviation turbine fuel traditionally accounts for up to 40% of a commercial carrier's total operational expenditures.

The backstop lands as major domestic airlines grapple with intensifying fiscal strain. IndiGo, India’s largest airline, reported an INR 25.4 bn (USD 270 mn) loss for 4Q FY 2026, with steep ATF prices and a weaker INR pushing expenses up 31% y-o-y. Airlines have warned that a further hike in ATF prices could prompt the carriers to suspend operations.

Route cuts are already hitting the ground as low-cost carrier IndiGo prepares to halt operations to six international destinations starting 1 July, Reuters reports. The affected destinations are Hong Kong, Shanghai, Langkawi, Krabi, Ho Chi Minh City, and Siem Reap, with bookings expected to reopen from 1 October, or earlier, if conditions improve. The international pullback follows IndiGo’s move to trim its scheduled domestic operations for June and July by 7-10%. Meanwhile, Tata Group-owned rival Air India took a sharper scalpel to its schedule, slashing domestic capacity by 22% over the same two-month window.

Tax cuts to boost foreign investment

India has scrapped its 12.5% long-term capital gains tax on foreign portfolio investments in government bonds, as per a government ordinance. The exemption is designed to draw overseas capital and prop up the INR, which has faced steady downward pressure from high crude prices and persistent equity outflows that are straining the country's external balances.

Sweetening the agreement: The government has also scrapped the steep 20% withholding tax that foreign investors currently pay on interest earned from sovereign debt. The exemption applies retrospectively from 1 April, 2026. Alongside the tax changes, the Reserve Bank of India expanded the fully accessible route to include new issuances of 15, 30 and 40-year government bonds, widening access for global investors.

Why this matters: Removing these taxes could boost net yields on INR-denominated sovereign bonds at a time when the asset class is significantly outperforming Indian equities. While foreign investors have dumped a staggering USD 28 bn in Indian equity markets this year, they have continued to park capital in government debt, injecting USD 1.4 bn this year.

Incentives for nickel and lithium

India’s Mines Ministry is preparing to unveil a new incentive package worth INR 30 bn (USD 313.4 mn) to scale up the domestic processing of lithium and nickel, Reuters reports, citing anonymous sources.

Why it matters: India remains heavily dependent on China for the critical metals that anchor the electric vehicle supply chain. New Delhi has set ambitious green transition targets to hit 30% electric car adoption and 80% electric two-wheeler penetration by 2030 — a massive leap from current market shares of less than 10%. Achieving this scale of adoption requires an ironclad domestic supply chain, and the proposed policy explicitly targets this midstream vulnerability by subsidizing the conversion of raw or intermediate minerals into battery-ready inputs.

The Gulf connection: Boosting local refining capacity is also poised to unlock deeper cross-border supply chains with strategic partners in the Gulf. India-based Lohum is already building a Sharjah facility to process lithium-ion battery waste from the Middle East and Africa into black mass, which will be shipped to India for refining. The upcoming INR 30 bn incentive scheme could make similar feedstock and processing partnerships more commercially viable.

The big story abroad

Private credit is back under the microscope after renewed second-quarter redemption pressure forced some of the sector's biggest managers — BlackStone and Partners Group — to curb withdrawals from flagship funds. The pressure is being driven by fears over software exposure, valuations, and limited transparency.

Elsewhere, SpaceX is telling banks it will not move from its USD 135-a-share IPO price as the firm’s roadshow, which kicked off yesterday, is already seeing what sources are describing as insatiable demand.

Closer to home, Hezbollah has rejected the ceasefire in Lebanon, while Israel said it would not withdraw troops from the country in another blow to the potential US-Iran agreement. Iran had said there would be no agreement without a ceasefire in Lebanon.

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Adia backs Kotak’s USD 1 bn real estate fund

Adia is writing another large check in India — this time in its property market. A wholly owned subsidiary of the Abu Dhabi sovereign wealth fund anchored a USD 1 bn investment vehicle for India’s Kotak Alternate Asset Managers, CNBC TV18 reports.

The details: The fund is the 14th real estate fund for Indian financial services conglomerate Kotak Mahindra Group’s investment arm, and the sixth Kotak real estate play that Adia has invested in. Adia’s contribution came in at upwards of USD 675 mn.

Next up: The fund will focus on providing growth and development financing across residential, commercial, and other real estate segments in major Indian cities.

Who are they? A specialized subsidiary of the Kotak Mahindra Group, Kotak Alternate Asset Managers is India’s leading alternative asset management and investment advisory firm. Kotak has raised, managed, or advised over USD 22 bn in total investments across a diverse range of asset classes.

“Adia’s sixth consecutive commitment is a testament to the trust earned over a decade of consistent delivery,” Kotak Managing Director Srini Sriniwasan said.

Adia has been expanding its India portfolio in recent years. Back in 2024, it announced plans for a USD 4-5 bn fund in Gujarat International Finance Tec-City, and last year it backed the IPOs of Indian digital stockbroker Groww and Bengaluru-based solar manufacturer Emmvee Photovoltaic Power. Wider UAE-India cooperation received a boost in January, as the two sides pledged more collaboration, including on trade and investments.

Adia also participated in Acme Solar’s qualified institutional placement (QIP) which raised INR 28 bn (USD 328 mn) for the firm, PTI reports. The exact size of Adia’s investment was not disclosed at the time of dispatch. The SWF joined marquee global investors including BlackRock, Amundi, Goldman Sachs and Pictet. This was Acme’s first equity raise since listing on Indian exchanges in 2024. Proceeds from the raise will go toward reducing debt and strengthening Acme’s balance sheet.

Market reaction: Following the announcement, Acme’s shares touched a fresh 52-week high on the National Stock Exchange before trading 1.86% above the previous close. The stock has gained 48% YTD, with the company’s market capitalization at around INR 213.48 bn (USD 2.5 bn).

Acme boasts 2.9 GW of installed renewable power generation capacity and is expected to add another 5GW. Most of its power is sold under long-term fixed-tariff agreements to government-backed buyers. ICICI Securities and IIFL Capital Services were the bookrunning lead managers for the QIP.

ICYMI- These investments come just days after Adia participated in Indian precision equipment manufacturer KRN Heat Exchangers’ qualified institutional placement.

(** Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

Changing dynamics

The UAE unseated Saudi Arabia as India’s second-largest crude oil supplier in May, capitalizing on a three-month shipping disruption in the Strait of Hormuz, Moneycontrol reports, citing Kpler data. UAE’s Fujairah feedstocked Indian refineries better than Saudi’s Yanbu pipeline.

By the numbers: India imported about 540k bbl / d from the UAE in May, down 5% from April but up 166% from March levels, when India imported just 203k bbl / d. Meanwhile, Saudi Arabia held the spot of the third-largest supplier with 398k bbl / d, as shipments fell by 41% compared to April and the Hormuz blockade persisted. Russia retained its position as India’s top supplier, with shipments at 1.9 mn bbl / d.

Why it matters: The UAE’s rise in India’s crude basket also comes on the back of the two countries doubling down on expanding strategic petroleum reserves, LNG supplies, and energy security during Prime Minister Narendra Modi’s recent visit to Abu Dhabi.

What’s next: We keep an eye out for whether Indian state and private refiners begin shifting their long-term contracts toward Adnoc later this year. If they do, the temporary logistical choke could become a structural market-share loss for Saudi Aramco in India.

The US is now India's top LPG supplier

The US has displaced traditional Gulf suppliers to become India's largest source of cooking gas imports in the first 90 days of the war, dramatically altering India's liquefied petroleum gas (LPG) supply chain, Hindu Businessline reports, picking up Kpler data.

It all adds up: India imported 1.4 mn tonnes of LPG from the US between March and May, commanding 44% share of India’s total imports. Last year, India had imported merely 90k tonnes accounting for 2.7% of the total imports.

The market is running exceptionally tight: Sourcing from major Gulf suppliers — the UAE, Qatar, Saudi Arabia, and Kuwait — dropped to 38% from 93% of total imports a year earlier. LPG cargoes moving through Hormuz fell from an average 1.5 tonnes in 2025 to just 300k tonnes after the conflict began.

Even as the US gained market share, India’s LPG imports declined nearly 40% y-o-y during this period, making it clear that the alternate sources are not adequate to meet the country’s demand.

Oman gains

Oman emerged as India’s largest supplier of liquefied natural gas (LNG) in March and April, overtaking long-time leader Qatar. India imported 489k tonnes of LNG from Oman in March — nearly 30% market share. Qatar’s share plunged to just 8% from 41% last year.

The Hormuz workaround: Attacks on Qatar’s energy infrastructure and the Hormuz disruptions, curtailed exports from Qatar’s Ras Laffan LNG complex. As supplies tightened, Indian importers turned to Oman, the US and Nigeria to fill the gap. Oman has been particularly well-positioned to capture market share because its LNG export facilities are located outside the Hormuz, insulating supplies from the conflict. India is expected to continue relying heavily on Oman until Gulf gas flows normalize.

Demand destruction

India is expected to see slower growth in gasoline and diesel consumption this year after four rounds of fuel-price increases since mid-May, in the aftermath of soaring crude costs, Reuters reports. Indian state refiners hiked retail gasoline by 7.8% and diesel by 8.6%, prompting analysts to lower demand forecasts for the world’s third-largest oil consumer.

Demand projections for gasoline have been cut to 3.7% from 4%, while diesel demand growth is now projected at 2%, down from 2.5%, Dylan Sim, an analyst at FGE NexantECA, told the newswire.

Retailers still in a sweat: Price hikes have only partially offset losses for state-run retailers Indian Oil, Bharat Petroleum, and Hindustan Petroleum, which continue to lose a combined INR 5.5 bn (USD 57 mn) daily by selling fuel below market rates. Additional pump price increases are expected if crude remains near USD 100 / bbl.

Trucking slowdown imminent: Early signs of demand slowdown are emerging in the freight sector. Trucking rates have fallen by up to 15% across most long-haul routes due to higher diesel prices. Transportation firms are reporting delays of three to five days in securing return cargoes as manufacturing activity slows. Gasoline sales growth slowed to 2.8% y-o-y in May from 6.8% in April, as hiked fuel costs begin to weigh on consumer and industrial activity.

(** Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

Rates on hold

The Reserve Bank of India (RBI) kept its benchmark repo rate unchanged at 5.25% and unveiled a package of measures to attract foreign capital and bolster the sliding INR, as per an RBI press release.

Neutral it is: The RBI’s monetary policy committee unanimously voted to maintain rates and retain its “neutral” stance, citing an increasingly uncertain global environment. Policymakers preferred to wait for greater clarity on inflation and growth before considering any policy shift, RBI Governor Sanjay Malhotra said.

Tax breaks + USD incentives: Alongside scrapping capital gains tax and interest withholding tax on foreign investments in government securities, the RBI also announced concessional FX swaps for state-owned firms raising overseas debt and said it would compensate banks for hedging costs on select foreign-currency deposits from non-resident Indians.

Why it matters: The RBI has opted against following regional central banks in raising rates, instead deploying targeted measures to strengthen India's capital account. Economists estimate the combined measures could attract between USD 40 bn and USD 60 bn of additional inflows.

RBI broadens foreign investment channels

Diaspora + overseas funding sway: The RBI relaxed certain concentration and short-term holding restrictions, making India's sovereign debt market more accessible to global funds. It also raised investment limits for non-resident Indians in listed Indian equities without needing registration with the market regulator. The facility has been extended to all individual investors residing outside India.

Plus, an export cushion: The RBI also restored the deadline for exporters to repatriate export earnings to nine months, from the temporary 15-month window introduced earlier. Together with the state’s decision to eliminate capital gains and interest taxes on foreign investments in government bonds, the measures are part of a coordinated effort to strengthen India's balance of payments, attract fresh USD inflows and stabilize the INR without resorting to interest-rate increases.

India-Oman CEPA hands textile exporters duty-free access

The India-Oman Comprehensive Economic Partnership Agreement (CEPA) officially entered into force on Monday, unlocking a lower-cost gateway for Indian textile and apparel exporters into Gulf markets. The bilateral trade agreement eliminates Oman's 5% import duty across all 945 textile and apparel tariff lines, granting immediate duty-free access to Indian shipments, according to a Ministry of Textiles press release.

By the numbers: India shipped USD 95.1 mn worth of textiles, apparel, and handicrafts to Oman in FY 2025-26. With Oman importing roughly USD 598 mn in the category annually, India currently holds an 11% market share as Oman’s third-largest supplier, leaving substantial headroom for tariff-driven expansion.

The tariff breakdown: The CEPA gives duty-free access to 99.38% of India’s exports to Oman by value and covers 98.08% of Oman’s tariff lines, according to the Ministry of Commerce & Industry. Before the pact, only 15.3% of India’s exports entered Oman at zero duty.

Why it matters: The CEPA equips India’s textile and MSME exporters with zero-tarrif foothold in the Middle East. The real value for the India-MENA corridor lies in pairing zero-duty market access with Oman’s port connectivity. This allows exporters to bypass escalating shipping risks and logistics bottlenecks in the Middle East, while simultaneously hedging against fresh tariff threats in Western markets like the US.

Beyond direct consumption, Oman serves as a vital transshipment base for the region. As India’s second-largest trading partner in the Gulf, the Sultanate links Indian exporters to the wider Gulf Cooperation Council (GCC) and African markets through strategic ports of Sohar, Duqm and, Salalah. Trade through these ports can offer an alternative to chokepoints such as the Strait of Hormuz amid the war, the ministry said.

Diversifying beyond garments: The tariff gains also cover other labour-intensive sectors including gems, jewellery, marine products, processed food, pharmaceuticals, engineering goods, footwear and automobiles. Oman has also opened 127 services sub-sectors, including professional services, healthcare, education, finance, construction, tourism and telecom.

(** Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

USD 2 bn drone procurement

India’s domestic military drone procurement is projected to surpass the USD 2 bn milestone this year. The aggressive ramp-up comes as recent global conflicts demonstrate the high reliability and cost-effectiveness of unmanned aerial systems over legacy defense hardware, Reuters reports, citing Drone Federation India President Smit Shah.

By the numbers: The next cycle of tactical drone purchases is poised to cross the INR 200 bn (USD 2 bn) threshold, following a massive surge compared with recent order books, which stood at roughly INR 30 bn (USD 313 mn). Faster procurement channels are expected as the Indian armed forces move to add surveillance, strike, and battlefield-support systems to their capabilities after the extensive deployment of drones during border clashes between India and Pakistan in May 2025.

Domestic base: India’s drone ecosystem has grown beyond niche and small-scale manufacturers. The sector now features more than 600 firms manufacturing unmanned vehicles or specialized components, including over 100 entities exclusively focused on military-grade systems. The supplier base spans conglomerates like Adani Group, Larsen & Toubro, and Tata Advanced Systems, along with startups such as ideaForge, Newspace Research, and Asteria Aerospace.

Why it matters: India’s drone strategy is moving from limited tactical orders to larger domestic procurement, with faster acquisition routes and repeat orders helping shorten buying timelines. The wars in Iran and Ukraine have reinforced the battlefield role of drones, loitering munitions, and tactical surveillance systems, giving Indian manufacturers clearer visibility into demand in categories that Gulf and wider MENA defense buyers are also keen to acquire.

Air India, Riyadh Air network tie-up

AirIndia and Saudi Arabia’s new national carrier Riyadh Air have signed an agreement to establish comprehensive interline and codeshare flights, according to a press release. The strategic partnership is designed to seamlessly link both carriers’ networks across India, Saudi Arabia, and onward international destinations to capture booming travel demand along the corridor. The partnership allows passengers to book interconnected journeys across both airlines via major transit hubs in Delhi, Mumbai and Riyadh.

Middle East misses out on global HNWI wealth growth in 2025

Every region in the world saw an uptick in the wealth of high-net-worth individuals (HNWI) last year — except ours. The Middle East stood out as the only region not to catch the upside of growth in both HNWI wealth and population.

HNWI wealth was up 8.7% last year globally, reaching USD 98.3 tn, with 2 mn more people becoming m’naires, according to Capgemini’s latest World Wealth Report. AI-linked investment and strong corporate earnings drove the results, and the stock market portion of HNWIs’ portfolios rose to 25%.

Not in our neck of the woods: In the Middle East, wealth was down 1.5% last year, while the overall HNWI population dropped 1.4%, with the report citing pressure on fiscal coffers from lower oil prices, weak labor markets, and regional instability as the primary drivers of the contraction.

The regional decline occurred despite the global population of ultra-high-net-worth individuals (UHNWI) growing 9.7% y-o-y to 250k, thanks to exposure to lucrative private and public assets. UHNWIs now hold 34.8% of overall HNWI wealth globally.

The US came out on top for HNWI count, recording 736k new m’naires to bring its total to 8.7 mn, with tech being a key driver of wealth creation. Some 40% of returns from the S&P 500 came from the top seven tech firms. Europe, Latin America, and Africa also saw HNWI growth. The Asia Pacific region led in terms of wealth growth, which rose 10.5% on the back of demand for semiconductors.

A bleak outlook? It seems more HNWIs are staying put this year. Last year, 56% of HNWIs said they had or were planning to change their primary tax residence, but this year, only 25% plan to do so, the Financial Times reports, citing a Capgemini survey.

The sad part: The Middle East was actually on track for a significant influx this year — 13% of respondents said they were looking to relocate to the region, the highest share of any other region. However, Gareth Wilson, global banking industry leader at Capgemini, said this sentiment existed before the Iran war, expecting next year’s numbers to tell a different story.

The UAE — and the wider GCC — was well positioned to catch a larger intake of HNWIs who were relocating from countries like the UK in search of more favorable tax policies and investment environments. However, the regional war has prompted many HNWIs in the UAE to either leave or scout for other locations for long-term residency, with inquiries for Henley & Partners’ UAE residence program down 13% in 1Q.

MARKETS THIS MORNING-

Asian tech shares were dragging markets down, as they tracked losses among US chip stocks. South Korea took the brunt of it, with stocks like Samsung and Seoul Semiconductor dragging the index down more than 5%. Japanese and Taiwanese tech stocks also fell, though Taiwan Semiconductor Manufacturing Co. bucked the trend, rising 0.4%.

Sensex	74,170	-0.2% (YTD: -12.9%)
NIFTY 50	23,346	-0.3% (YTD: -10.6%)
ADX	9,628	+0.4% (YTD: -3.6%)
DFM	5,753	+0.6% (YTD: -4.8%)
Tadawul	10,990	-0.1% (YTD: +4.7%)
EGX30	52,652	+0.1% (YTD: +25.8%)
Boursa Kuwait	8,688	+0.3% (YTD: +4.6%)
QSE	10,335	-0.5% (YTD: -3.9%)
S&P 500	7,584	+0.4% (YTD: +10.7%)
FTSE 100	10,392	+0.3% (YTD: +4.6%)
Euro Stoxx 50	6,092	-0.1% (YTD: +5.2%)
Brent crude	USD 94.5	-0.5%
Natural gas (Nymex)	USD 3.3	-0.2%
Gold	USD 4,487	-0.4%
BTC	USD 62,977	-0.2%

The values in the table above are listed according to the market position as of 3:30pm IST / 2pm GST.

CALENDAR

JUNE

15-17 June (Monday-Wednesday): Prime Minister Narendra Modi to attend G7 Summit in Evian, France.

18-21 June (Thursday-Sunday): Bharat Buildcon, Yashobhoomi, Dwarka, Delhi.

24-25 June (Wednesday-Thursday): India Homeland Security Expo, Bharat Mandapam, Pragati Maidan, New Delhi.

26 June (Friday): Muharram.

Signposted to happen sometime in 1H 2026:

Signing of India-Qatar FreeTrade Agreement (Details yet to be announced);
India-EU Trade and Technology Council Ministerial Meeting, Brussels, Belgium;
India to host the Brics Summit.

JULY

1-3 July (Wednesday-Friday): Seafood Expo Bharat, Chennai Trade Centre, Chennai.

3-4 July (Friday-Saturday): Rail & Transit Expo (RailTrans), Bharat Mandapam, New Delhi

3-4 July (Friday-Saturday): SOMS International Exhibition & Conference, Gandhinagar, Gujarat.

8-10 July (Wednesday-Friday): India Energy Storage Week, New Delhi.

14-17 July (Tuesday-Friday): Bharat Tex, New Delhi.

22-24 July (Wednesday-Friday): Rail & Metro Technology Conclave, Bharat Mandapam, New Delhi.

AUGUST

15 August (Saturday): Independence Day.

26 August (Wednesday): Prophet Mohammad’s Birthday.

SEPTEMBER

1-3 September (Tuesday-Thursday): India Energy Week, Dwarka, New Delhi.

1-6 September (Monday-Saturday): Dubai Fashion Week, Dubai Design District.

7 September (Sunday): Opec+ meet to discuss production policy for October.

7-9 September (Monday-Wednesday): iPHEX 2026 International Pharmaceutical Exhibition, Bharat Mandapam, New Delhi.

8-11 September (Tuesday-Friday): Global Fintech Fest, Mumbai.

9 September (Tuesday): Envision 2025, Atlantis, The Royal, Dubai.

17-19 September (Thursday-Saturday): Semicon India Conference, Yashobhoomi, Delhi.

OCTOBER

2 October (Friday): Gandhi Jayanti (Mahatma Gandhi’s Birthday).

20 October (Tuesday): Dussehra.

NOVEMBER

24 November (Tuesday): Guru Nanak Jayanti.

DECEMBER

8-11 December (Tuesday-Thursday): Expand North Star, Dubai.

25 December (Friday): Christmas Day.

Signposted to happen sometime in 2H 2026:

Monsoon Session of Parliament is expected to be held in July/August in New Delhi (TBA);
Reserve Bank of India’s Monetary Policy Committee meeting for the September cycle (TBA);
India Mobile Congress will likely be held in October in New Delhi (TBA).

JANUARY 2027

30 January-3 February (Saturday-Wednesday): Printpack India, India Expo Centre, Greater Noida (Delhi NCR).

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