Bhan: Indian market correction is a prime buying window
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- Sailesh Raj Bhan, CIO (equities) at Nippon Life AMC, says the market correction dating to September 2024 highs has normalized valuations across multiple segments and created an attractive entry window for long-term equity participation.
- Bhan attributes the correction to prolonged consolidation plus aggressive foreign portfolio investor selling, while noting corporate earnings showed recovery signs in the most recent quarter after two muted years and should improve further over the next two quarters if crude stabilizes.
- Private banking and IT services saw sharp valuation drops because FPI selling — largely to fund the global AI trade elsewhere — hit these FPI-heavy sectors hardest, creating what Bhan calls a favorable risk-reward entry profile.
- Bhan describes India's macroeconomic balance sheet as its strongest in years, with the domestic banking system's bad debt issues largely resolved, though he flags crude oil spikes to $100-110/barrel as the primary remaining systemic vulnerability.
- Bhan's multi-cap fund allocates roughly 45% to large-caps and 55% to mid- and small-caps with some holdings held 15-20 years; his large-cap fund keeps 80-85% in the top 100 benchmark companies, and his pharma fund carries a minimum five-year investment horizon.
- For a moderate-risk investor with a 5+ year horizon, Bhan recommends 60-65% equities, 10% gold, and 25-30% fixed income or debt, positioning gold for its historically low correlation to equities rather than speculative return.
Why it matters: Bhan hands long-term investors a concrete allocation template (60-65% equities, 10% gold, 25-30% debt) at a moment he views as unusually aligned: post-correction valuations, recovering corporate earnings, and a strengthened macro backdrop. His specific call-out of private banks and IT services as sectors where FPI outflows to the global AI trade created accidental bargains gives allocators a clear entry thesis rather than a vague 'buy the dip'.
