India’s stock market has an influencer problem #IndiaFinance

Good morning. It’s going to be another week of dizzying developments. Today Prime Minister Narendra Modi is in France, where he will co-chair the AI Action Summit and adopt a France-India road map for artificial intelligence, besides announcing some important defence deals. He’ll then head to Washington DC to meet Trump, with tariffs the top concern on both sides. Meanwhile, the Trump tizzy continues with more tariffs on more products spurring all kinds of reciprocal actions and market churns. It’s only been three weeks, but I am already exhausted from trying to keep up.

In today’s newsletter, we look at how India is pushing the private sector to take forward its space agenda. But first, the stock market regulator battles the endless menace of finance influencers.

In Friday’s Go Figure, I said Delhi election results would be out that day. They were, obviously, out only on Saturday. Mea culpa.

Sebi bans ‘finfluencer’

India’s markets watchdog is playing a game of whack-a-mole with social media influencers who provide investing advice. In the latest move by the Securities and Exchange Board of India (Sebi) on Saturday, it banned six people from trading including Asmita Patel, who calls herself the “she wolf of the stock market”. The regulator also sought to impound illegal gains of Rs530mn ($6.3mn) from them.

Patel and her associates were running an investment advisory business through which they enrolled clients for courses on trading in stocks and options. Sebi said these clients were “misled by exaggerated promises of profits and forced into paying high fees for minimal or ineffective trading education”. Patel and her associates also have to explain why another Rs1.04bn collected as fees for these programmes should not be seized as well.

In the past couple of years, Sebi has banned more than a dozen of these so-called “finfluencers” (cringe!) from trading in the markets. The phenomenal growth in retail participation on the Indian bourses in the past few years has resulted in a large number of “investment gurus” selling stock tips or other get-rich-quick schemes to gullible followers on social media. Last year, Sebi informed parliament that it had flagged nearly 9,000 such posts and had asked Facebook, Telegram, YouTube and other sites to act against people making misleading investment claims. In May, it mandated that registered financial advisers disclose their social media activity every six months and also set up a regulatory framework disallowing brokerages and other market participants from associating with unregistered financial influencers.

While Sebi’s concerns are valid, it does not have the power to root this problem out. Social media companies have been careful to ensure that they are categorised as “platforms” and not “publishers” and, therefore, are not held accountable for the content that users post. And as we have seen, platforms are increasingly abandoning fact-checking or actively moderating the content that users post. Sebi can only hope that such orders, and the strict financial penalties it imposes on cases like this, will work as a deterrent for other wolves on Dalal Street.

Have you been following any “finfluencers”? Tell us your experience. Hit reply or email us at [email protected].

Recommended stories

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2. India needs an ambitious agenda for higher growth, writes our editorial board.

3. Busan, South Korea’s second city, is at “risk of extinction” as young people leave.

4. An Elon Musk-led consortium has submitted a near-$100bn bid to take control of OpenAI, while activist investor Bill Ackman has taken a $2.3bn stake in Uber.

5. AI was used to fake the voice of Italy’s defence minister in a scam targeting tycoons.

Making space

The Indian government is seeking to mirror the public-private symbiosis that Nasa and SpaceX have successfully established in the US. Private start-ups can now manufacture launch vehicles that were previously produced by India’s space agency, the Indian Space Research Organisation (Isro). Pawan Goenka, chair of IN-SPACe, which is overseeing this initiative, told my colleague John Reed that rockets being used for missions such as Chandrayaan will now be built by the private sector. Two private Indian start-ups, Skyroot Aerospace and Agnikul Cosmos, have successfully completed suborbital tests of launch vehicles.

Isro has made tremendous progress in building low-cost launch vehicles locally. While the moon mission Chandrayaan is its most popular breakthrough, the agency has been working on a number of projects including an air breathing propulsion technology, augmenting its remote launch vehicle technology and launching India’s own space station. In 2023, the government announced the Indian Space Policy, which laid down the framework for the private sector’s participation, using that as the key to expanding India’s space economy to $44bn (from $8.4bn) by 2033. Subsequently, five commercial operators have submitted their proposals for new non-geostationary satellite systems.

The government has stuck to its commitments to the sector. In this month’s budget, it significantly increased capital outlay by 30 per cent to Rs61bn. Isro’s success has been a matter of national pride as well as a singular testament to India’s indigenous production capability. Encouraging private capital to expand on this is the best way to increase the scale and scope of India’s space ambitions.

Go figure

Despite investor concerns about the threat posed by DeepSeek’s low-cost AI, Silicon Valley is expected to invest significant capital this year in developing their artificial intelligence capabilities. Here are forecasts from the three leading Big Tech spenders:

My mantra

“In a business like retail, there is disproportionate joy to be had in being differentiated by disciplines. This is even more so because the pay-offs come from making counterintuitive choices. This is integral in order to be differentiated and stay relevant. Grinding head to head with other brands with similar offerings is way less rewarding”

— P Venkatesalu, chief executive, Trent Limited

Each week, we invite a top Indian business leader to tell us their mantra for work and life. Want to know what your boss is thinking? Nominate them by replying to [email protected].

Quick question

How are the constant (and often conflicting) decisions that Trump is making leaving you feeling? Take part in our poll here.

Buzzer round

On Friday we asked: What phenomenon has made Greenland a desirable territory for many countries?

The answer is . . . climate change, which is more rapid at the Arctic island than in any other region on Earth, potentially making its shipping routes and mineral deposits more accessible.

Thank you for reading. India Business Briefing is edited by Tee Zhuo. Please send feedback, suggestions (and gossip) to [email protected].