With such heavy supply, you can’t expect a runway market, says Axis Mutual Fund’s Ashish Gupta

Subscribe to enjoy similar stories. India is in a better position, and 2026 appears to be an improvement over last year, according to Ashish Gupta, chief information officer (CIO), Axis Mutual Fund. “But with such heavy supply, you can’t expect a runaway market," he said.

Lower initial public offering (IPO) valuations should lead to better listing outcomes, but they also pull down valuations of listed companies, Gupta highlighted. However, he also believes that valuations aren’t the main concern now, as broadly speaking, valuations matter less today than they did a year ago, although some pockets still have high expectations. Edited excerpts: What’s the mood in the market right now? About a year ago, expectations were high that the market would continue delivering very strong returns.

We could sense this in the market, for example, in the heavy oversubscription in the retail category in IPOs. There was also a lot of chasing returns, and investors were moving down the market-cap curve. That has now moderated.

People are investing more thoughtfully and with more circumspection. Flows are coming across the market-cap cohort, and interest in multi-asset products has grown as investors have seen the benefits of diversification across asset classes this year. Overall, investor inclination towards equity has sustained, and it continues to draw much more interest than debt.

That said, many of the excesses we were seeing a year ago have now eased. What’s your take on valuations? Valuations have also moderated. The large-cap index and broader market have not moved significantly, and the small-cap index is actually down over the last 12 months.