In this week’s wrap-up, we break down the fallout from IndusInd Bank’s derivatives mismanagement, why Pakistan is struggling to attract investment, whether the CAG’s appointment procedure needs a rethink, why Coca-Cola won’t snack like Pepsi and what happens if LIC enters the health insurance space.

And in this week’s markets edition, we explain why both Adani and the Birla Group are suddenly betting big on cables and wires — and what that could mean for existing players in the industry. Click here to read the full markets story.

But before we begin… We’re on the lookout for a Financial Writer!

If you love finance and have a knack for storytelling, this is your chance to join Finshots. We simplify business and finance for 5,00,000+ readers every day, and now, we’re looking for someone who can break down market trends, economic policies and business stories into crisp, engaging reads.

If this sounds like you, or you know someone who’d be perfect for the role, apply here or share it with them.

Now, let’s dive into what we wrote over the week…

When derivatives go wrong

In 1995, one rogue trader’s unhedged futures bets brought down the UK’s oldest bank. And recently IndusInd Bank reminded everyone why that story still matters.

The bank disclosed a gap in how it accounted for forex derivative losses — ignoring mark-to-market rules and failing to hedge its exposure. Instead of showing losses, it booked them as receivables. The result? ₹19,000 crores in market value wiped out and the RBI now investigating if other banks might be doing something similar.

Now, IndusInd isn’t accused of fraud like Barings Bank was. But the lapse is worrying. Because when banks mismanage derivatives (powerful but risky financial tools) it doesn’t just hurt profits. It chips away at public trust - and you can know why this is crucial in our Monday’s newsletter. 

Pakistan’s investment woes

Pakistan’s inflation is finally under control. The stock market looks good. And short-term foreign investors are back. So, all’s good, right? Well… not quite.

The country’s investment-to-GDP ratio has hit a 64-year low of just 13%. Its wealthy elites are still pouring money into luxury real estate and flashy cars, not long-term industry or infrastructure. Why? Because decades of debt dependence, broken tax systems, and weak industry have made real investment risky and unattractive.

Pakistan now needs $146 billion over the next 5 years just to service its debt. And without productive investments, it’s trapped in a borrow-pay-repeat cycle. 

So in our Tuesday story, we tell you what’s keeping investments away from Pakistan and if there’s a way out.

Who watches the watchdog?

The Comptroller and Auditor General (CAG) is India’s official public finance watchdog. It’s caught scams like 2G and Coalgate, exposed state-level fund misuse, and held governments to account.

But now, the Supreme Court has admitted a plea questioning how the CAG is appointed. The PIL says the CAG shouldn’t be handpicked by the ruling party — it should be chosen by an independent panel.

Why? Because recent audits show a worrying trend: some being stalled, others triggering political storms, and some turning into federal face-offs.

So if the auditor isn’t truly independent, who’s keeping the government in check? That’s the question at the heart of this petition and we break it down in our Wednesday newsletter. 

What keeps Coke out and Pepsi deep in the snacking market?

PepsiCo sells both drinks and snacks. Coca-Cola? Just drinks. That’s a bit odd, considering snacks make up 80% of Pepsi’s revenue in India and the country’s snack market is booming.

So why hasn’t Coca-Cola joined the munch fest, you ask? Because it’s still focused on dominating beverages — especially in rural India, where household penetration is still low. Jumping into snacks would mean splitting resources, building new supply chains, and possibly diluting its brand. Plus, raw materials like potatoes and corn are more volatile than bottling syrup.

And we take a closer look at both these companies in our Thursday newsletter.

Will LIC change the health insurance market in India?

India’s insurance giant LIC is reportedly eyeing a significant stake in an existing health insurance company. And if it enters the health insurance space, that could change the game.

With a massive agent and partner network, LIC could bring health insurance to every corner of India. Think life + health insurance combos, bundled products, and possibly cheaper premiums (thanks to cross-subsidizing from its life insurance profits).

But not everyone’s thrilled. Health insurers worry LIC might undercut them, spark a price war, and hurt margins. Plus, if life insurers are allowed back into full-fledged health insurance, it could shake up the market’s regulatory stability.

So is there a silver lining to this? Check out our Friday newsletter for more. 

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