The recent “bump-up” in capital-market stocks should be read in the context of a structurally expanding investor base rather than a single trade that has run its course, according to Pankaj Murarka, chief investment officer at Renaissance Investment Managers.
At a panel discussion on NDTV Profit following the Union Budget 2026-27, Murarka argued that India’s capital markets have broadened meaningfully since the pandemic, helped by a sharp rise in first-time participation. While he cautioned that a portion of new entrants has gravitated towards short-term trading, an outcome he said the industry should not encourage, he maintained that the larger market ecosystem is deeper and more resilient than before.
Whether the story that “hot stocks” narrative around platform businesses, such as Groww and Angel One, is not “deflated” so much as normalising in certain segments. “I don’t think so because we are an economy which accumulates 38% savings. Capital markets play a very important role through various business segments through intermediation or disintermediation of channelising those savings. Growth in different segments of capital markets will still remain robust. It might impact F&O trading volume but that’s one part of the market..”
“The other part of the market in terms of asset management, wealth management, advisory, investment banking, IPO. We are the third-largest IPO in the world. It can’t get better than that,” said Murarka.
He also pointed to strong deal momentum in the broader financial ecosystem, saying bankers have seen exceptionally busy pipelines in recent years. Murarka noted, “Bankers have made their biggest part of money, in their lifetime, in India in the last three years. Every banker has 4-50 deals lying on his table. I think other parts of the capital market are doing exceedingly fine and they would continue to do well.”
On fiscal federalism and infrastructure, Murarka welcomed the government’s acceptance of the 16th Finance Commission’s recommendation to retain the vertical devolution share at 41%, calling it a pragmatic decision. He spoke about the additional funding support outlined for states, saying the measures should help accelerate infrastructure execution and strengthen credit and bond markets. The budget, he concluded is “short on rhetoric and long on details.”
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