This bull run isn't broad-based; 60% of new listings below IPO price: Equirus' Ankur Punj
Ankur Punj, MD & Business Head at Equirus Wealth, decodes the forces powering the surge, the mixed signals from market breadth, and the global macro tailwinds favouring India.
- Dec 2, 2025,
- Updated Dec 2, 2025 11:59 AM IST
As Indian equities scale fresh record highs, followed by profit booking, investors are keen to understand whether the rally rests on solid fundamentals or fleeting momentum. In a conversation, Ankur Punj, MD & Business Head at Equirus Wealth, decodes the forces powering the surge, the mixed signals from market breadth, and the global macro tailwinds favouring India.
He also weighs in on the sensitivity of FII flows, the true risk–reward behind the ongoing IPO wave, and the key indicators that will determine whether this bull run can sustain over the next 12–18 months. With India positioned as a high-growth, low-inflation economy amid a supportive global backdrop, Punj offers a grounded perspective on opportunities, risks and the roadmap for investors navigating this evolving market landscape. Read the edited excerpts:
BT: Indian benchmark indices recently scaled new highs but were weighed down by profit booking at record highs. What factors do you believe are responsible for the recent record highs in Nifty and Sensex?
Punj: Strong domestic macro data like GDP growth at 8.2%, record low inflation and supportive Global cues like expectation of rate cut by US Fed and subdued crude prices led to Nifty and Sensex scaling new highs. Latest GDP growth numbers reinforce India’s narrative as a high growth and low inflations economy; this will lead to more flows towards India compared to other EMs. Rate cut expectation from US Fed and RBI have increased appetite for Equities as preferred asset class. A meaningful fall in Brent crude towards low $60 improves current account math for an oil importer like India and equity markets are rewarding the reduced input cost pressures.
BT: With some sectors showing strong performance while others lag behind, what is your view on market breadth and whether the rally is broad-based or concentrated?
Punj: Structurally this is not yet a truly broad-based rally for Equity markets as it is quite concentrated to Index heavyweights. Although the BSE large cap has moved up, Mid and Small caps are down by about 1%. Bulk of upside is coming from Large Cap leaders in financial, energy, telecom, industrial and select IT names such as HDFC Bank, ICICI Bank, Reliance, Bharti Airtel, L&T, ITC, Infosys and SBI. A large number of NSE 500 names and several Nifty constituents are still below earlier peaks. This would explain why many individual portfolios might be lagging even after rallies in NSE and BSE.
BT: How do global macro-economic factors — like global interest rate trends, commodity prices, and geopolitical developments — influence the Indian markets currently?
Punj: Global macro factors are in favour of Indian equities currently, US Fed has shifted to early easing phase softer global yields alongside RBI holding repo steady while guiding for growth has kept domestic bond yields below 7% supporting valuations for Indian Equities. Crude remains the key macro swing factor for an oil importer like India, lower and range bound oil is positive for India’s import bill, inflation trajectory and improves margins for oil-intensive sectors like aviation, auto, cement and consumer discretionary. If Crude remains subdued it will drive fund flows towards India more compared to other EMs. Any de-escalation in ongoing conflicts like Russia-Ukraine, China-Taiwan or Middle East flash points will spark a relief rally in Indian Equities.
BT: How important is foreign institutional investment (FII) flows in driving the current bull run — and what risks arise if FII sentiment changes?
Punj: Although DIIs and retail SIP flows play a critical role in providing stability, FIIs contribute significant liquidity and momentum to Indian equities especially in large cap like financials, energy and IT sectors. In 2025 FIIs have net sold Rs 2 Lacs Crores of Equities, however we saw periods of strong inflows as well indicating sentiment is sensitive to global macro risk and valuations. We have seen FII inflows coincide with dips in the market to take advantage of valuations and positive domestic data. If FII sentiment shifts negatively towards India we might see sharp correction in Large Cap indices, downward pressure on Rupee which might lead to higher inflation and cost pressures. This will increase market volatility and risk aversion which can dampen investor confidence overall. Domestic institutions do provide support to Indian equities however for a sustained bull markets we need a combination of stable FII inflows and strong domestic support.
BT: Given the recent wave of IPOs, how do you assess the risk–reward for new listings now — are valuations sustainable? How should investors approach the current IPO wave?
Punj: While the IPO market is vibrant with record fundraising and a strong pipeline, valuations overall appear stretched and less sustainable compared to previous years. Average listing gains have moderated to around 8.4% in 2025 compared to 29% in 2024 with close to 60% of recent IPOs trading below issue price. Investors should focus on companies with visible earning traction, strong governance, sustainable business models and reasonable valuation multiples to peers. It is important to do enhanced due diligence including scrutiny of use of IPO proceeds, promoter track record and financial transparency. It is important for investors to have a research driven investment approach combined with portfolio diversification to navigate this environment.
BT: Looking ahead over the next 12–18 months: what signs or indicators would you watch to judge whether the rally is sustainable or due for a correction? What will be your advice for investors?
Punj: Earning growth is a key indicator of sustained market rally, double digit earning growth across sectors especially financials, cyclicals and IT will validate higher valuations. Consistent FII inflows alongside domestic institutional support are crucial for a sustained market rally. Robust GDP growth with benign inflation would support market momentum and attract more capital towards Indian equities. Subdued Global interest rates along with low Brent Crude prices will provide support to market momentum. However a downgrade cycle or earning misses, rally in crude prices and geo-political tensions could disrupt the market momentum and lead to market volatility. It is important for investors to maintain a diversified portfolio and rebalance portfolio regularly, maintaining an Asset Allocation strategy can help ride through market volatility.
As Indian equities scale fresh record highs, followed by profit booking, investors are keen to understand whether the rally rests on solid fundamentals or fleeting momentum. In a conversation, Ankur Punj, MD & Business Head at Equirus Wealth, decodes the forces powering the surge, the mixed signals from market breadth, and the global macro tailwinds favouring India.
He also weighs in on the sensitivity of FII flows, the true risk–reward behind the ongoing IPO wave, and the key indicators that will determine whether this bull run can sustain over the next 12–18 months. With India positioned as a high-growth, low-inflation economy amid a supportive global backdrop, Punj offers a grounded perspective on opportunities, risks and the roadmap for investors navigating this evolving market landscape. Read the edited excerpts:
BT: Indian benchmark indices recently scaled new highs but were weighed down by profit booking at record highs. What factors do you believe are responsible for the recent record highs in Nifty and Sensex?
Punj: Strong domestic macro data like GDP growth at 8.2%, record low inflation and supportive Global cues like expectation of rate cut by US Fed and subdued crude prices led to Nifty and Sensex scaling new highs. Latest GDP growth numbers reinforce India’s narrative as a high growth and low inflations economy; this will lead to more flows towards India compared to other EMs. Rate cut expectation from US Fed and RBI have increased appetite for Equities as preferred asset class. A meaningful fall in Brent crude towards low $60 improves current account math for an oil importer like India and equity markets are rewarding the reduced input cost pressures.
BT: With some sectors showing strong performance while others lag behind, what is your view on market breadth and whether the rally is broad-based or concentrated?
Punj: Structurally this is not yet a truly broad-based rally for Equity markets as it is quite concentrated to Index heavyweights. Although the BSE large cap has moved up, Mid and Small caps are down by about 1%. Bulk of upside is coming from Large Cap leaders in financial, energy, telecom, industrial and select IT names such as HDFC Bank, ICICI Bank, Reliance, Bharti Airtel, L&T, ITC, Infosys and SBI. A large number of NSE 500 names and several Nifty constituents are still below earlier peaks. This would explain why many individual portfolios might be lagging even after rallies in NSE and BSE.
BT: How do global macro-economic factors — like global interest rate trends, commodity prices, and geopolitical developments — influence the Indian markets currently?
Punj: Global macro factors are in favour of Indian equities currently, US Fed has shifted to early easing phase softer global yields alongside RBI holding repo steady while guiding for growth has kept domestic bond yields below 7% supporting valuations for Indian Equities. Crude remains the key macro swing factor for an oil importer like India, lower and range bound oil is positive for India’s import bill, inflation trajectory and improves margins for oil-intensive sectors like aviation, auto, cement and consumer discretionary. If Crude remains subdued it will drive fund flows towards India more compared to other EMs. Any de-escalation in ongoing conflicts like Russia-Ukraine, China-Taiwan or Middle East flash points will spark a relief rally in Indian Equities.
BT: How important is foreign institutional investment (FII) flows in driving the current bull run — and what risks arise if FII sentiment changes?
Punj: Although DIIs and retail SIP flows play a critical role in providing stability, FIIs contribute significant liquidity and momentum to Indian equities especially in large cap like financials, energy and IT sectors. In 2025 FIIs have net sold Rs 2 Lacs Crores of Equities, however we saw periods of strong inflows as well indicating sentiment is sensitive to global macro risk and valuations. We have seen FII inflows coincide with dips in the market to take advantage of valuations and positive domestic data. If FII sentiment shifts negatively towards India we might see sharp correction in Large Cap indices, downward pressure on Rupee which might lead to higher inflation and cost pressures. This will increase market volatility and risk aversion which can dampen investor confidence overall. Domestic institutions do provide support to Indian equities however for a sustained bull markets we need a combination of stable FII inflows and strong domestic support.
BT: Given the recent wave of IPOs, how do you assess the risk–reward for new listings now — are valuations sustainable? How should investors approach the current IPO wave?
Punj: While the IPO market is vibrant with record fundraising and a strong pipeline, valuations overall appear stretched and less sustainable compared to previous years. Average listing gains have moderated to around 8.4% in 2025 compared to 29% in 2024 with close to 60% of recent IPOs trading below issue price. Investors should focus on companies with visible earning traction, strong governance, sustainable business models and reasonable valuation multiples to peers. It is important to do enhanced due diligence including scrutiny of use of IPO proceeds, promoter track record and financial transparency. It is important for investors to have a research driven investment approach combined with portfolio diversification to navigate this environment.
BT: Looking ahead over the next 12–18 months: what signs or indicators would you watch to judge whether the rally is sustainable or due for a correction? What will be your advice for investors?
Punj: Earning growth is a key indicator of sustained market rally, double digit earning growth across sectors especially financials, cyclicals and IT will validate higher valuations. Consistent FII inflows alongside domestic institutional support are crucial for a sustained market rally. Robust GDP growth with benign inflation would support market momentum and attract more capital towards Indian equities. Subdued Global interest rates along with low Brent Crude prices will provide support to market momentum. However a downgrade cycle or earning misses, rally in crude prices and geo-political tensions could disrupt the market momentum and lead to market volatility. It is important for investors to maintain a diversified portfolio and rebalance portfolio regularly, maintaining an Asset Allocation strategy can help ride through market volatility.