GST Council to Weigh ITC on Corporate Insurance | No GST Exemption Proposed

Welcome Back Investor!

RBI Governor Sanjay Malhotra clarified there’s no clash between financial stability and growth, calling them complementary goals. Speaking at FIBAC 2025, he said the RBI is examining measures to expand bank credit toward productive sectors like MSMEs and sunrise industries. With Indian corporates enjoying stronger balance sheets, Malhotra urged them to rekindle investment momentum. He also highlighted the role of AI, ML, and digital tools like the Unified Lending Interface to make credit delivery more efficient and inclusive.

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Today’s Market Menu

▪️ Impact News

▪️ Markets

▪️ Everything else you need to know today

▪️ Special

▪️ Mindset

▪️ Stock Screener to up your game

IMPACT NEWS

🔒 GST Council to Weigh ITC on Group Insurance, No Exemption Planned 

The upcoming GST Council meeting is set to spark debate over corporate group insurance policies, a hot topic for India Inc. According to a Business Standard report, the council may allow companies to claim input tax credit (ITC) on group health and life insurance offered to employees. This move could reduce costs for employers, making corporate insurance a more attractive benefit.

However, there’s a catch. The council isn’t considering any exemption from the 18% GST currently levied on such policies. That means while firms might offset some expenses through ITC, the overall tax burden on group insurance will remain intact. For employees, this translates to no immediate relief in terms of lower premiums.

The decision comes at a time when group insurance has become a critical component of corporate compensation packages, especially in the post-pandemic era where health security is paramount. Industry experts argue that while ITC availability is welcome, a GST exemption would have provided a stronger boost by directly lowering costs for both businesses and policyholders.

As the council weighs its options, the outcome could set the tone for how India balances tax revenues with corporate welfare initiatives. For now, businesses await clarity on whether ITC benefits will ease the pressure on their insurance spends.

MARKETS

The Indian stock market closed higher on August 25, 2025, with the Sensex up 329 points at 81,635 and the Nifty 50 nearing the 25,000 mark, fueled by a sharp rally in IT stocks after U.S. Fed Chair Jerome Powell hinted at a possible rate cut in September, boosting global risk appetite. Infosys, TCS, and Wipro led the tech surge, lifting overall market sentiment, while Nifty Bank slipped slightly on profit-booking. Midcaps also gained modestly, reflecting broad-based optimism. Though trade tariff concerns and intermittent selling capped upside momentum, investor confidence remained strong, positioning IT as the day’s star performer.
_{Closing figures as on 25.08.25 (3.30pm IST)}

🔎 In Focus

Stock Performance:

Top Gainers

✅ Vodafone Idea (+4.67%): Vodafone Idea extended its two-day rally after reports suggested the PMO is reviewing a relief plan for AGR dues worth over ₹83,000 crore.

✅  Jubilant Food (+4.63%): Shares climbed on improved demand outlook ahead of the festive season and optimism around easing raw material costs.

✅  PG Electroplast (+3.60%): The stock rose on strong order inflows and bullish sector momentum in consumer durables and electronics manufacturing. Investors bet on government incentives under the PLI scheme, which could support medium-term growth.

✅ Zydus Life (+3.47%): The pharma major gained as investors priced in regulatory approvals for new launches in the US generics market and a healthy Q1 earnings outlook. Defensive buying in pharma also supported the uptick.

Top Losers

🔻 Angel One (-2.85%): The brokerage stock fell after SEBI proposed longer equity derivatives tenures, a move that could reduce trading volumes and impact brokerage revenues.

🔻 L&T Finance (-2.25%): Weakness came on the back of profit booking after a recent rally and concerns over rising credit costs in the NBFC sector.

🔻  CDSL (-2.06%): The depository stock slipped in sympathy with brokerages like Angel One, as regulatory changes in F&O trading may lower market participation.

🔻  Fortis Health (-2.06%): The healthcare stock declined as investors booked profits following recent gains. Broader market rotation into IT and defensives left hospital stocks slightly under pressure despite strong fundamentals.

INDIA FRONTIER

Everything else you need to know today

🌐 Lobbying: Ahead of a looming 50% US tariff hike on exports, India has brought in Mercury Public Affairs on a $75,000/month contract. The firm will push federal lobbying, media strategy, and digital outreach.

📊 Resilient: Fitch has reaffirmed India’s BBB- sovereign rating with a stable outlook, projecting 6.5% GDP growth in FY26. Strong external finances and resilient fundamentals underpin the rating.

🤝 Fragile: Despite fresh diplomatic warmth, experts see the RIC partnership as a marriage of convenience. Divergent strategic interests and India’s tilt toward the West may limit durability.

📈 Revival: Vodafone Idea shares surged 16% in two sessions after reports that the PMO may review AGR dues relief. Investors cheered the possibility of policy support. The move fuels optimism for the telco’s long-awaited turnaround.

SPECIAL

🚀 Why Tech Stocks Are Rallying as Nifty IT Jumps 3% 

Indian tech stocks lit up the markets today, with the Nifty IT Index climbing nearly 3% and heavyweights like Infosys, TCS, and Wipro leading the charge. The rally comes on the back of three powerful triggers that have reignited investor optimism in the sector.

First, global cues played a starring role. Fed Chair Jerome Powell’s dovish remarks hinted at a possible U.S. interest rate cut in September, boosting hopes of stronger tech demand and fresh foreign inflows into Indian equities. Lower rates in the U.S. often translate into higher risk appetite for emerging market IT exporters.

Second, upbeat calls from leading brokerages have added fuel. Investec upgraded Infosys to “Buy” with a target price of ₹1,655, while JPMorgan shifted TCS to “Overweight” with a revised target of ₹3,800. Analysts cited strong Q1 earnings, robust deal pipelines, and the sector’s growing exposure to AI-driven transformation as reasons for optimism.

Finally, valuations appear attractive after months of consolidation. Investors are viewing this as a buying opportunity, especially with global clients gradually resuming discretionary tech spending.

Together, these factors created the perfect storm for IT stocks, positioning the sector as a bright spot in Indian markets. For investors, the rally underlines renewed confidence in India’s tech giants as engines of growth in a digital-first world.

THE HANOOMAAN INSTITUTE

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SUPERCHARGE YOUR INVESTING SKILLS

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Grandmaster of stocks
by - Warren

Current price / (EPS latest quarter*4) > 1 AND
Current price / (EPS latest quarter*4) < 10 AND
Price to Earning > Current price / (EPS latest quarter*4) AND
Price to Earning < Industry PE AND
QoQ Profits > 10 AND
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Thanks for reading.

Until tomorrow!

Hanoomaan India Business team

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