Module 12 · Macro, Cycles & Special Situations¶
What this module does. Gives a bottom-up investor the macro they need — rates and equity duration, inflation, the rupee, RBI transmission, fiscal capex, crude, the earnings cycle, and a sector × macro matrix to audit a portfolio's exposures; market cycles and sentiment measured rather than predicted (valuation bands, flows, IPO cycles, India's small-cap cycles, the pendulum); and special situations — demergers, buybacks, open offers, delisting, mergers, rights, IPOs, index changes, holdco events — where structure creates the mispricing.
Why it matters. Every valuation embeds macro inputs and every portfolio carries factor bets the investor did not consciously choose; and the 2025–26 demerger wave is the richest special-situations field India has had.
Lessons¶
| # | Lesson | One line | Time |
|---|---|---|---|
| 12.1 | Macro for equity investors | Rates and duration; inflation; INR; RBI; fiscal; crude; the earnings cycle; the sector × macro matrix | 70 min |
| 12.2 | Market cycles & sentiment | Valuation bands; flows (record DII, FPI at 15-year-low ownership); IPO cycles; small-cap cycles; the pendulum | 60 min |
| 12.3 | Special situations | Demergers (ITC Hotels, Tata Motors), buybacks and their tax, open offers, delisting, mergers, rights, IPOs, index events, holdco closures | 80 min |
Connections¶
- Back: 06.2 (rf, ERP), 07.5, 08, 11.4.
- Forward: Module 13 cases on cycles and special situations (G3, I8, I12, I15); the capstone's macro audit.
You're ready to move on when you can…¶
- Rebuild a DCF's rf from today's G-sec and state the value's duration.
- Fill the sector × macro matrix for every holding and name the portfolio's dominant exposure.
- Read the Nifty's valuation band, the flow regime and the primary-market stage, and say where the pendulum is.
- Analyse a demerger scheme, do buyback arithmetic post-tax, and run the six-step special-situation checklist.
Tested by: the final exam.