The markets have been on a roll in 2024 so far. The Nifty has started the year at 21700 and risen as much as 22,500 in two months. Though YTD Nifty gains are muted and the Sensex has actually slipped in the red zone, the long-term, market observers say, looks steady. Edelweiss Chief Radhika Gupta is confident about the India story continuing to shine.

See markets stable over long-term

Radhika Gupta, MD and CEO, Edelweiss MF explained that, “I think if you look at the long-term, things are in very steady shape, earnings growth continues to be resilient double-digit, I think the core India story continues to be in very strong shape. Capital flows are very good. So I think the long-term story checks all the right boxes. In the short-term because of the way markets have run up, some volatility is par for the course you have an election event, you have the recent news about disclosures and at some point markets need an excuse to cool down. So volatile short-term, which will lead into a stable long-term.”

Govt aiming to fully automate customs processes by April 2026  Asean FTA review: India to seek more tariff cuts, tighter RoR Sonata Software has 9 AI deals, expects larger ones in early FY26 India will be our top market in 5-10 years, says Glenmorangie CEO MacRae

Tackling Midcap Mania

The sell-off in the broader markets of course have been significantly more widespread in the past few days on the back of the SEBI call for more disclosures. The Nifty Small Cap Index has slipped over 3% so far in 2024 while the Nifty Midcap Index was comparatively resilient.

Though there has been chatter about froth in the market, Gupta believes prudence and disclosure will help improve quality of trade. “If you look at midcaps, the next 150 companies of India, they are not small companies anymore. That said, of course, a lot of money has come into the space in the last year or two. And unfortunately, a lot of the money comes in chasing one-year returns and five-year returns. So prudence and disclosure is a good thing. And I think SEBI mandating disclosures around liquidity is a good one. There is no reason for investors to panic. If you have a portfolio, if you’re looking to select firms, don’t just sort them by one-year return. Actually look at the portfolio’s underlying risk. Liquidity is something we have always been very careful about in our portfolio. So we’re very happy that these kinds of disclosures came out,” pointed out Gupta.

The Primary Market concerns

The primary market has also been in focus. In just 2.5 months, we have seen 23 IPOs and 20 listings and the list keeps getting longer. The SEBI Chief touched upon concerns with respect to exuberance in this space and that’s exactly why Gupta corroborates the Regulator’s decision on need for more disclosures to add value to the new offerings. According to her, “I think it is a good thing again, SEBI has always said that they operate based on a disclosures. So again, IPOs is a category where sometimes it tends to be a lot of fraud. It’s a very good category in the long-term, more disclosure in our view.”