ECM Newsletter: High Intensity Quarter, Outlook Remains Constructive

While Indian equities faced turbulence from global shocks, FII outflows and subsequent rupee weakness, domestic liquidity has remained resilient, with DII inflows countering FII outflows and SIP inflows holding firm. 

Precedent shows that India’s markets have historically bounced back strongly from crises, underscoring the fact that the long-term growth story remains intact, with recovery expected to be gradual but constructive 

At this stage - valuation compression has opened attractive entry points and despite current volatility, the IPO pipeline remains strong, with INR 2.5 lakh crore worth of IPOs expected to go public in the next 12-18 months, record filings, and landmark REIT-InvIT fundraises. 

Highlights 

• We expect markets to rebound once key risks are fully priced in, as seen in prior periods of market drawdown
• Domestic liquidity anchors markets as DIIs absorb heavy FII selling, tripling net support
• Despite market headwinds, the quarter still saw comparable IPO activity by value
• REITs & InvITs have shown resilience amidst volatility, and set to raise over INR 50,000 Cr
• Nifty’s PE drop reinforces margin of safety - valuation comfort restored, opening a value-buying window