Nifty 50 has slipped 13% year‑to‑date, falling to 19,400 from a 10‑year high of 24,000. The drop comes as the index’s constituent companies are expected to post 20% profit growth in September, the fastest pace in three years.
Thyagesh Baba, non‑executive director at Spark Capital, told Reuters that the 13% slide may not yet lure back investors, citing slowing growth, elevated oil prices and stretched valuations. He added that sustaining earnings growth remains the key to unlocking future returns.
The Nifty’s worst annual performance in over a decade follows a period of near‑triple growth over the past decade. While banks have tightened regulation and reduced leverage, companies have become more disciplined in allocating capital, easing concerns over capital structure.
Spark Capital’s Midas fund focuses on firms one to three years before listing, avoiding late‑stage pre‑IPO premiums. Baba also highlighted private credit as a growing source of risk‑adjusted returns, suggesting cash‑flow‑backed debt could become more prominent.
The market’s reaction is cautious; the index has not yet breached the 20,000 threshold, and analysts expect continued volatility as oil prices remain high and foreign inflows are uncertain.