Digital platforms to aviation: V K Vijayakumar picks 2026 stock market wealth creators
FIIs have been selective in their investment in the primary market. They have been selling over-valued stocks in the secondary market and putting that money in the fairly-valued IPOs, says V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
- Nov 25, 2025,
- Updated Nov 25, 2025 10:14 AM IST
Digital platform companies present a long-term structural story and offer opportunities for wealth creation for patient investors, says V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
In an interview with Ritik Raj of Business Today, Vijayakumar said that while sectors like healthcare, renewables, and aviation also have bright prospects for 2026, investors must be careful about the entry price. He cautioned that even a good growth stock may not yield good returns if bought at an unjustifiably high price.
1. The Nifty is near 26,000, but the market cap-to-GDP ratio is at a record 142%. Does this mean the Buffett Indicator no longer works for India, or are we in a valuation bubble?
The market cap-to-GDP ratio, the so-called Buffet ratio, has been on the higher side for quite some time now. This is not just the case of India; it has almost been the rule rather than the exception in many markets, during this bull phase. In the mother market US, the market cap-to-GDP ratio is at around 220 percent - far ahead of safe levels. Buffet had cautioned that “anything approaching 200 is playing with fire.” But the market is resilient. Valuations must be seen in the total context of GDP growth, earnings growth, PE multiple, interest rates and expectations surrounding them. A limitation of the Buffet ratio is that the numerator includes only the publicly traded companies while the denominator represents all economic activity including those from businesses that are not traded in the market.
2. FIIs are offloading shares in the secondary market but bidding aggressively in IPOs. Explain this contradiction as an investment strategy?
One reason for the paradox in FII strategy - sustained selling in the secondary market and consistent buying in the primary market - is the valuations. Valuations have been reasonable for many IPOs. FIIs have been selective in their investment in the primary market. They have been selling over-valued stocks in the secondary market and putting that money in the fairly-valued IPOs. It is also a fact that there is some irrational exuberance in the primary market and consequently even pricey issues have been getting oversubscribed many times. Institutional investors - both DIIs and FIIs - have been getting the opportunity to make money from the IPOs. Retail investors are jumping to the IPO bandwagon to make some quick listing gains. This is an unhealthy trend. Also, many retail investors are buying stocks on listing, ignoring the valuations.
3. The Nifty Midcap 100 is at an all-time high. Is this surge driven by fundamentals and earnings, or is something else pushing the rally?
For the broader market as a whole - both mid and small caps - valuations are pricey, more so for small caps. From the fundamental perspective, it is hard to justify the valuations. Midcaps have the support of growth, but this is not true of small caps generally. Liquidity is the major factor driving both mid and small caps. The superior returns delivered by the mid and small cap segments during 2020-24 have been encouraging retail investors to pour more money into these segments, expecting these returns to continue. This is irrational investment strategy. In the long run, valuations will revert to the mean.
4. Looking to 2026, beyond the consensus themes of Defence and Infrastructure, what is the next multi-year structural growth story?
Digital platform companies present a long-term structural story. They have a long runway of growth ahead. For patient investors this segment offers opportunities for long-term wealth creation. Health care - hospitals and pharmaceuticals - offers another long-term structural story. With increasing life expectancy and superior health care the prospects of this segment are bright. Renewable energy and automobiles, particularly in the electric segment, have potential for sustained long-term growth. Aviation is another promising segment. However, investors should be careful about the price when they invest. Even a good growth stock may not yield good returns, if bought at an unjustifiably high price.
Digital platform companies present a long-term structural story and offer opportunities for wealth creation for patient investors, says V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
In an interview with Ritik Raj of Business Today, Vijayakumar said that while sectors like healthcare, renewables, and aviation also have bright prospects for 2026, investors must be careful about the entry price. He cautioned that even a good growth stock may not yield good returns if bought at an unjustifiably high price.
1. The Nifty is near 26,000, but the market cap-to-GDP ratio is at a record 142%. Does this mean the Buffett Indicator no longer works for India, or are we in a valuation bubble?
The market cap-to-GDP ratio, the so-called Buffet ratio, has been on the higher side for quite some time now. This is not just the case of India; it has almost been the rule rather than the exception in many markets, during this bull phase. In the mother market US, the market cap-to-GDP ratio is at around 220 percent - far ahead of safe levels. Buffet had cautioned that “anything approaching 200 is playing with fire.” But the market is resilient. Valuations must be seen in the total context of GDP growth, earnings growth, PE multiple, interest rates and expectations surrounding them. A limitation of the Buffet ratio is that the numerator includes only the publicly traded companies while the denominator represents all economic activity including those from businesses that are not traded in the market.
2. FIIs are offloading shares in the secondary market but bidding aggressively in IPOs. Explain this contradiction as an investment strategy?
One reason for the paradox in FII strategy - sustained selling in the secondary market and consistent buying in the primary market - is the valuations. Valuations have been reasonable for many IPOs. FIIs have been selective in their investment in the primary market. They have been selling over-valued stocks in the secondary market and putting that money in the fairly-valued IPOs. It is also a fact that there is some irrational exuberance in the primary market and consequently even pricey issues have been getting oversubscribed many times. Institutional investors - both DIIs and FIIs - have been getting the opportunity to make money from the IPOs. Retail investors are jumping to the IPO bandwagon to make some quick listing gains. This is an unhealthy trend. Also, many retail investors are buying stocks on listing, ignoring the valuations.
3. The Nifty Midcap 100 is at an all-time high. Is this surge driven by fundamentals and earnings, or is something else pushing the rally?
For the broader market as a whole - both mid and small caps - valuations are pricey, more so for small caps. From the fundamental perspective, it is hard to justify the valuations. Midcaps have the support of growth, but this is not true of small caps generally. Liquidity is the major factor driving both mid and small caps. The superior returns delivered by the mid and small cap segments during 2020-24 have been encouraging retail investors to pour more money into these segments, expecting these returns to continue. This is irrational investment strategy. In the long run, valuations will revert to the mean.
4. Looking to 2026, beyond the consensus themes of Defence and Infrastructure, what is the next multi-year structural growth story?
Digital platform companies present a long-term structural story. They have a long runway of growth ahead. For patient investors this segment offers opportunities for long-term wealth creation. Health care - hospitals and pharmaceuticals - offers another long-term structural story. With increasing life expectancy and superior health care the prospects of this segment are bright. Renewable energy and automobiles, particularly in the electric segment, have potential for sustained long-term growth. Aviation is another promising segment. However, investors should be careful about the price when they invest. Even a good growth stock may not yield good returns, if bought at an unjustifiably high price.