CNBC's Inside India newsletter: What's next for India's regulators?

Bureaucrats, stereotypically but perhaps unfairly, are often seen as moving too slowly. Instead, there's been a flurry of activity this month at a number of regulators across India's financial system. 

As the South Asian country's financial markets evolve and expand, the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) have been actively implementing new rules. 

They say it's to ensure the stability and integrity of the markets. 

One area that has caught their attention is the rapidly growing derivatives market, particularly futures and options trading. 

In 2023, more than three-quarters of the 108 billion options contracts traded worldwide were on Indian exchanges, according to data from the Futures Industry Association. The significant increase over the past five years has been mainly fuelled by retail investors, with the rise drawing the attention of senior politicians. 

"Any unchecked explosion in retail trading of futures and options can create future challenges, not just for the markets, but for investor sentiment and household finances," Nirmala Sitharaman, India's finance minister, told an industry conference this week. 

India 'very favorable' for IPOs. Shailendra Singh, managing director at Peak XV Partners, formerly Sequoia Capital India & Southeast Asia, told CNBC that India has created "a very favorable environment" for companies to go public. There were 220 IPOs in India last year, up 48% from 2022, making it the second-largest IPO market in the world.

India is still relying heavily on coal. According to a new report by energy think tank Ember, India generates 78% of its electricity from fossil fuels, with coal making up 75% of that mix. The country's leaders have been optimistic about its path to net zero, making bold claims that 50% of its power generation will come from non-fossil fuel forms of energy by 2030.

The fallout between Maldives and India is benefiting Sri Lanka. A social media row in January resulted in a sharp drop in Indian visitors to the Maldives this year and is "absolutely" helping Sri Lanka's travel industry, according to the country's tourism minister. Nearly 34,400 Indian travelers went to Sri Lanka in January, more than double the 13,759 that visited in January last year.

India's mid-cap stocks are in a 'bubble'. [Subscriber content] On CNBC Pro, the portfolio manager behind a $3.1 billion Asia ex-Japan fund revealed that they've nearly exited the country. The fund manager said it's impossible to justify current stock prices, even when accounting for "aggressive assumptions" about future growth.

Indian stocks have partially rebounded this week after a 2% decline last week. The Nifty 50 is up 1.5% so far this week. The index has risen 3% this year.

The 10-year Indian government bond yields have fallen in the last week to 7.08%. The Indian rupee has remained nearly flat against the U.S. dollar over the past week.

The elections will continue next week with the fifth phase starting on Monday. Voting is staggered in phases until June 1 and counting starting a few days afterward.

Next week, Go Digit Insurance, which counts former Indian cricket captain Virat Kohli as an early investor will go public on Thursday.