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Why Power Utilities Are Feeling The El Nino Heat
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Good Morning. Mumbai is sweating at nearly 39℃, and so are India’s power distributors. El Nino has pushed peak demand up 18% to 270 GW, forcing discoms into costly spot buying. Hydro output is down, coal stocks are thin, and consumers may eventually end up paying the price for it.
Indian benchmark indices remained under pressure on Wednesday. The BSE Sensex closed at 73,709.69, declining 143.21 points or 0.19%. The NSE Nifty50 closed at 22,811.35, dropping 77.60 points or 0.34%.
In other news, India’s core sector output jumps 7.9% in September. Meanwhile, HDFC bank probe flags data leak.
El Nino Heats Up Power Demand, Discoms Turn To Spot Markets
What?
Most Mumbaikars are prepared for October heat, but this year, the temperatures are not in the 35-36℃ range as usual. They’re hitting close to 39℃ — keeping ACs running on full capacity at many homes.
“Temperature anomalies are being observed in the Pacific Ocean where subsurface temperatures between 50 to 150 meters are 8 degrees above normal. 8℃ above mean and ocean surfaces are 3℃ above mean. It will take time for these ocean waters to cool off. All these indicate a rare occurrence of an extremely strong El Niño coming up during October to December,” Air Vice Marshall GP Sharma, who is the president of meteorology & climate change at Skymet Weather Services, told The Core.
Reported temperatures are also higher in the North as well as the South. This is undoing the economics of power purchase across India – pushing power distributors to arrange more power quickly and, in most cases, expensively.
Why?
Apart from peak demand, which is the highest instant rate of consumption at a given point, overall power demand has also gone up.
Jatin Arya, director & rating head of infrastructure ratings at CareEdge told The Core, “Considering the strong demand momentum witnessed so far this year, coupled with the possibility of continued weather-related impacts from El Niño, demand growth in the current quarter is expected to remain healthy and above historical averages through the October-December quarter — in the 5-6% range YoY.”
Most distribution companies have been banking on the power exchanges to fill this gap.
As of August, Indian Energy Exchange (IEX) recorded the highest ever monthly electricity traded volume of 13,938 million units (MUs) in August 2026, an increase of 20.2% YoY, as a monthly bulletin by the exchange.
Why It Matters
State Electricity Boards or SEBs generally meet their power requirements through a combination of long-term power purchase agreements (PPAs), short-term contracts, and purchases from power exchanges. The share of long term/medium term power purchase is typically around 86%-87% and the rest of the requirement is filled by purchases from exchanges or bilateral contracts.
But the unexpected spike has left many power distributors dependent on the spot market, which also pushed up the prices.
Yet, power distributors are preparing for only the short term, while El Nino impact might be more long-term.
Moreover, even if power cuts are avoided in most cities, the higher cost of power so procured might end up on the bills of consumers, later if not sooner.
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7.9%
That is how much India’s core sector output grew year-on-year in September, accelerating from 3.1% in the same month last year, as coal, refinery products, steel and iron ore production supported growth. The growth was higher than the revised 5.9% expansion recorded in August, according to government data released on Wednesday.
By The Numbers: Iron ore output led the nine core industries with 18.4% growth, followed by electricity at 11.4%, coal at 10.7% and refinery products at 10.3%. Cement production rose 9.8%, while steel output expanded 4.9%. Fertilisers, natural gas and crude oil were the only sectors to contract during the month.
The Big Picture: “Refinery products output expanded by a record high 10.3% in September 2026, up from 5.6% in August 2026, supporting the growth in core output,” Aditi Nayar, Chief Economist at ICRA, said. Despite the strong core sector performance, ICRA expects industrial production growth to ease to 6-7% in September from 8% in August, as a higher base weighs on non-core sectors.
Fast Facts: The Index of Core Industries tracks nine infrastructure sectors and accounts for 40.27% of the weight in the Index of Industrial Production (IIP).
HDFC Bank Probe Flags Data Leak
HDFC Bank has found evidence that two senior executives disclosed confidential business strategies and potentially market-sensitive information to outsiders, according to Bloomberg. The lender is examining whether the information was misused, with disciplinary action to follow the probe’s findings.
Pivot: The development comes as Anup Bagchi prepares to take over as chief executive on October 27, following Sashidhar Jagdishan’s decision not to seek another term. Deputy Managing Director Kaizad Bharucha has also sought to leave by December-end.
Catch Up Quick: The findings add to HDFC Bank’s existing challenges, including a 28% decline in its share price this year, leadership transitions and boardroom tensions. Former chairman Atanu Chakraborty’s abrupt resignation in March, citing differences over certain practices, had also raised questions about governance, though an independent legal review found his concerns unsubstantiated.
The Fastest IPO in India's History
Jio Platforms' $3.2 billion IPO, India's largest share sale and the first from Mukesh Ambani's Reliance in two decades, was fully subscribed in under two hours on Wednesday.
Institutional investors covered their allotted tranche in just 10 minutes. By early afternoon, bids had come in for more than double the shares on offer.
"It's the fastest in the history of India," said one person close to the offering, Reuters reported.
Background: Jio Platforms is home to India's biggest telecoms company with more than 500 million subscribers, the world's second-largest telecoms operator in a single country after China Mobile.
The IPO values Jio at up to $108.3 billion, potentially making it one of India's biggest companies by market cap when trading starts on October 28.
Outcome: The IPO rush sent the rupee to a six-week high of 94.4925 on Tuesday before it settled at 94.56, up 0.4%.
HSBC analysts warned the rupee would likely resume its "modest upward drift" given India's current account deficit and higher inflation relative to peers, as reported by Reuters.
Navratri Auto Sales Resilient
Automobile retail over ten days of Navratri clocked sales of 11.23 lakh units, despite a high base set in 2025 when GST cuts and pent-up demand drove a 34% surge, provisional data from the Federation of Automobile Dealers Associations (FADA) showed.
Passenger vehicles recorded sales of 1.82 lakh units during the period, while two-wheelers at 8.34 lakh units. “Navratri 2026 tells a fundamentally healthy story,” FADA President Sai Giridhar said.
The Lead: Automobile retail sales at 11.23 lakh units is down 6.52% when compared to 12.01 lakh units during Navratri 2025, however there is a growth of 26.76% as against 8.85 lakh units recorded in navratri 2024.
“The marginal 6.52% dip versus Navratri 2025 is largely optical as last year’s festive season was exceptional when Navratri ran eleven days against ten and coincided with the GST cut roll-out, which pulled a wave of pent-up demand into one extraordinary window,” Giridhar said.
The Core earlier reported festive demand will lift the market, but global risks linger.
Future: Entering the Dhanteras-to-Diwali wave, FADA remains “cautiously optimistic as affordability is strong, aspiration is rising, and auto retail continues to mirror the enduring momentum of the India growth story.”
SBI Reports Data Leak
State Bank of India (SBI) has reported a cyberattack involving 3,897 customer records containing personal information that was leaked on the dark web.
The bank said customer balances remain safe and the incident is not expected to affect its core operations or financial performance.
Context: A preliminary review found that the leaked information included customer names, mobile numbers, dates of birth, email addresses, residential addresses, customer identifiers and loan records.
SBI has appointed an independent cybersecurity agency to assess the incident and investigate the extent of the data leak.
Flashpoint: The incident comes amid increased regulatory focus on banking cybersecurity in India, as threats targeting financial institutions continue to rise.
SBI said it is conducting a comprehensive assessment to understand the nature and impact of the leak.
How Jennifer Aniston’s LolaVie brand grew sales 40% with CTV ads
The DTC beauty category is crowded. To break through, Jennifer Aniston’s brand LolaVie, worked with Roku Ads Manager to easily set up, test, and optimize CTV ad creatives. The campaign helped drive a big lift in sales and customer growth, helping LolaVie break through in the crowded beauty category.
More Oil Flowing From Middle East Than Before War
On Episode 1012 of The Core Report, financial journalist Govindraj Ethiraj talks to Sachin Sawrikar, Managing Partner at Artha Bharat Investment Managers. We also feature an excerpt from our recent episode of our show How India’s Economy Works hosted by Journalist and Author Puja Mehra and featuring Ajay Srivastava, Founder at the Global Trade Research Initiative (GTRI).
SHOW NOTES
More Oil Flowing From Middle East Than Before War
The Perils Of Buying Venezuelan Crude And Rubio’s Diesel Purchase Pitch To India
The Rupee Is On Stronger Ground On Fresh Flows Including For Jio IPO
Power Shortages Are Leading To Cut Backs In Supplies In Gujarat
Why Some Funds Are Moving Out Of GIFT City
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