The two mega initial public offerings coming up in India are joined at the hip by retail sentiment. The $7 billion question is if the glue will hold.

If gray-market prices are to be believed, both the National Stock Exchange of India Ltd.’s $3 billion IPO and a $4 billion debut of billionaire Mukesh Ambani’s telecom and digital media empire are likely to find keen interest among local investors desperate for some excitement, the kind that secondary markets have been failing to provide lately.

While global capital chased the AI semiconductor booms in Taipei and Seoul — tripling Korean stocks and doubling Taiwanese equities — the benchmark Indian index hasn’t gone anywhere in the past two years. Worse, the war in Iran has torn a hole in the energy-importing nation’s fragile balance of payments. A plunge in the rupee has scared away foreign capital.

But now that the US and Iran have at least started peace talks, all eyes are on India’s individual stock buyers. They have only recently started to return after beating a retreat from markets. The common investing public needs to get its mojo back, and that’s where both the similarities and the differences between the two IPOs become important.

Both the NSE, India’s largest exchange, and Ambani’s Jio Platforms Ltd. have attractive moats: They are dominant players in what are effectively duopolistic industries, too heavily regulated for new competition to break in. The NSE’s rival is the 151-year-old BSE Ltd., or the erstwhile Bombay Stock Exchange, which has just a 7% share of the overall cash-equity turnover. Jio’s 500 million-plus subscribers — and a media empire buttressed by a lock on cricket, a national craze — put it considerably ahead of Bharti Airtel Ltd., the nearest challenger.

Indian investors are intimately familiar with both franchises. As long as India has capital controls, local market participants are beholden to the NSE for wealth creation. In mobile wireless, it’s hard to imagine anyone other than Jio deciding the price of data. Even in newer technologies like satellite broadband, national-security concerns may give Ambani an advantage over Elon Musk’s Starlink or Jeff Bezos’ Amazon.
But the differences in the two IPOs are crucial, too. The NSE listing, long delayed by governance scandals at the bourse, is entirely a sale of stock by existing shareholders. Jio, however, will be raising new money, partly to retire nearly $3 billion in debt.In mature markets, the distinction between an offer-for-sale and a fresh capital raise is mere plumbing. In India’s current fragile environment, it’s anything but. Because the NSE listing is structured strictly as an offer-for-sale, no fresh cash will enter the bourse’s treasury. Worse, among those trimming their stakes are foreign giants like Morgan Stanley and Temasek Holdings Pte. At a time when New Delhi is aggressively wooing diaspora dollars to shore up a fraying rupee, the NSE IPO risks becoming an exit ramp for foreign capital.

Ambani’s Jio, conversely, is a magnet for fresh funds. For Jio to succeed, however, the NSE sellers — Indian banks and insurers, foreign institutions, ultra-rich private investors — must leave some money on the table. (Given that the NSE rushed its draft papers to the regulator a day ahead of Jio, the general expectation is that it may be first out the door.) If they overprice the offer and burn retail investors, the flames won’t just singe Ambani; they will also reach Silicon Valley, upsetting everyone from Sundar Pichai to Mark Zuckerberg.

Alphabet Inc. and Meta Platforms Inc. are big backers of Jio, as are Saudi Arabia’s Public Investment Fund, KKR & Co. and a number of other sovereign wealth funds and private-equity firms. Although none of them are selling in the IPO, they will get to record the gains in their books. For Google alone, that turns a $4.5 billion stake bought six years ago into a $10 billion asset — more if the shares keep rising after listing.

Jio’s success will also help Ambani’s flagship Reliance Industries Ltd. clear the deck for its next big public float: consumer commerce. Carving out India’s largest retailer will still take some work because the competitive intensity in grocery, fashion and electronics sales is much higher than in telecom. All the more reason to keep retail shareholders happy.

Gold prices were steady on Tuesday as investors assessed U.S.-Iran peace talks, while rising expectations of a Federal Reserve interest rate hike in December weighed on the metal.

FUNDAMENTALS

Spot gold was steady at $4,191.09 per ounce, as of 0053 GMT. U.S. gold futures for August delivery rose 0.2% to $4,208.40.

The ‌United States ⁠waived sanctions ⁠on Iran for 60 days from Monday after the first talks under a nascent peace deal, while officials reported a sustained lull in fighting in Lebanon under the agreement aimed at ending hostilities across the region.

U.S. Vice President JD Vance said talks with Iranian officials in Switzerland had laid a good foundation for a final ⁠peace deal, ‌although Iran denied that it had begun discussions of its nuclear programme.

Fed Chairman Kevin Warsh will deliver his ⁠first testimony on monetary policy before Congress on July 14, according to a hearing notice published by the House Financial Services Committee.

Chicago Fed President Austan Goolsbee said that with the labour market stable, he is focused on figuring out whether too-high inflation will stay that way or if it will recede as the effect of high tariffs fades and if ‌the conflict in the Middle East gets resolved.
Traders now see an 89% chance of an interest rate hike in December, up from 61% ⁠before the Fed meeting last week, according to the CME FedWatch Tool. [FEDWATCH/]
Gold speculators raised net long positions by 9,258 contracts to 112,918 in the week to June 16. [CFTC/]
Spot silver fell 0.4% to $64.92 per ounce, platinum lost 0.4% to $1,672.90, while palladium was up 0.1% at $1,266.35.

DATA/EVENTS (GMT)

0730 Germany S&P MFG, Services, Composite Flash PMI Jun

0800 EU S&P Mfg, Services, Composite Flash PMI Jun

0830 UK Flash Composite, Manufacturing, Services PMI Jun

1345 US S&P Global Mfg, Svcs, Comp PMI Flash Jun

Asian stocks opened lower as oil edged higher, with investors continuing to watch developments in US-Iran peace talks.

MSCI Inc.’s gauge of regional shares fell as much as 0.2% in early trading. S&P 500 futures also edged lower after a slide in megacap tech stocks and rising bond yields dragged the benchmark down 0.4% Monday. SpaceX shares slipped for a third straight day, shedding hundreds of billions of dollars in value. Brent crude prices rose slightly to trade above $78 a barrel.

The US issued a 60-day license allowing Iran to sell oil on the international market, giving Tehran an economic lifeline as the two adversaries are poised to continue discussions to reach a permanent peace deal.

Meanwhile, Vice President JD Vance described the first round of negotiations with Iran as “very, very good” and said Tehran had agreed to allow nuclear inspectors back into the country. But officials from the Islamic Republic, who also cited progress, challenged that claim, saying Vance’s assertion was “false and does not reflect reality.”

While geopolitical developments are likely to remain a key source of volatility in the near term, shifts in investor confidence regarding the durability of the AI rally may also lead to bouts of market swings, according to Ulrike Hoffmann-Burchardi at UBS Chief Investment Office.

Expectations that an agreement will be reached, as well as the revival of the AI trade and solid corporate earnings, have fueled a 14% advance in the S&P 500 Index this quarter. However, that trails the 26% surge in the MSCI Asia Pacific Index.
Treasuries fell on Monday as trading resumed following a US public holiday, even as oil prices turned lower Iran said there had been “major progress” in all-night discussions with the US. Strategists cited Federal Reserve Chairman Kevin Warsh’s hawkish messaging last week as one of the reasons for the selling pressure.In currency markets, the Japanese yen lingered near its lowest level since 1986 as investors weighed the prospects for a lasting US-Iran peace deal and the risk of intervention by Japanese authorities. The Bloomberg Dollar Spot Index was little changed after rising 0.2% on Monday.

SpaceX plunged 16% after saying it’s selling investment-grade bonds in what’s expected to be a massive borrowing spree. Its bond sale is the latest in a wave of deals from companies driving the AI boom. Alphabet, Amazon.com Inc. and others have raised more than $300 billion of debt tied to AI since November across multiple credit markets. The rocket firm is seeking to raise at least $20 billion, Bloomberg reported.

“The issue that stands out the most is the idea that the hyperscalers continue to receive an extremely low return on investment on their colossal level of spending on AI,” said Matt Maley at Miller Tabak. “Another big concern surrounds the issue of ‘circular investments,’ where companies invest in each other, while also committing to buying each other’s products.”

Elsewhere, Andy Burnham appears set to become the UK’s seventh prime minister in a decade after Keir Starmer laid out a timeline for his own departure and potential rivals backed a quick transition to the popular Manchester politician. While markets showed little reaction to the resignation, they were buoyed by reduced odds of a leadership contest that could have prolonged uncertainty.

SpaceX shares slipped for a third straight day, shedding hundreds of billions of dollars in market value, after the Elon Musk-led company said it is selling investment-grade bonds for the first time, part of what’s expected to be a massive borrowing spree to fund its artificial-intelligence ambitions.

The stock fell 16% Monday to close at $154.60, the lowest level since the company’s first day of trading, pushing its three-day loss to 23% and erasing over $600 billion in value over that period. The company’s market capitalization now sits just above $2 trillion.

“Sellers are back in control. Anyone in the world who wanted to buy this has bought it already,” said Michael O’Rourke, chief market strategist at JonesTrading.

SpaceX’s first days of trading following its record $75 billion initial public offering were met with the type of volatility generally associated with new IPOs that have a low float — 4.2% of total shares outstanding were available to trade on day one — and high interest from retail investors. Still, even with Monday’s losses, SpaceX is the sixth-largest company in the world with shares about 15% higher than their $135 IPO price.

The rocket, satellite and AI conglomerate is seeking to raise at least $20 billion from the first bond offering, Bloomberg reported last week. SpaceX also inked a multibillion-dollar agreement to provide computing resources to Reflection AI, an AI startup, the company said Monday.

SpaceX’s embrace of artificial intelligence with the acquisition of Musk’s xAI in February meant investors closely watched the listing ahead of IPO prospects of competitors Anthropic PBC and OpenAI, both of which plan to go public as soon as this year with valuations expected to be around $1 trillion.
Retail trading in SpaceX, officially named Space Exploration Technologies Corp., was the strongest of any IPO in recent history, with the cohort buying net $405 million in the first five sessions according to Vanda Research. Retail investors bought more SpaceX last week than buying across all Magnificent Seven stocks combined, the data showed. On Monday, retail traders were still net buyers of SpaceX, but inflows were below last week’s levels, Vanda data showed. The stock was initiated with a recommendation of sector weight at KeyBanc Capital Markets, the first hold-equivalent rating according to data tracked by Bloomberg. Analysts led by Michael Leshock wrote that SpaceX is set to remain the leader in space-launch and adjacent verticals, but much of the long-term value is already captured in the stock price.

SpaceX “possesses significant disruptive growth avenues, though we believe this is reflected in current valuation and risk/reward appears balanced, in our view,” he wrote.