The report expressed caution, stating, “Nifty EPS is likely to grow 2 per cent (versus 4 per cent in H1FY25), posing downgrade risks to H2FY25 consensus estimate of mid-teens growth.”

This subdued growth in earnings is attributed largely to weaker demand dynamics rather than external factors or liquidity issues. The report emphasized that such demand-driven slowdowns are more challenging to reverse, as they often necessitate significant policy measures, which currently do not appear to be on the horizon.

Adding to the concerns, the report noted, “The more worrying aspect is that a slowdown in earnings is now being led by demand rather than external/liquidity shock.”

Projections for Nifty Earnings

Looking ahead, consensus estimates for Nifty earnings remain optimistic, with projections of ₹957 for FY24, ₹1,040 for FY25, and ₹1,240 for FY26. However, the report warned that the slower-than-expected growth in the second half of FY25 could pose a downside risk to these forecasts, particularly given the challenges of record-high market valuations and tightening liquidity conditions.

It elaborated, “Reversing the same shall need a significant policy response, which at present is not on the anvil. Consensus forecast of Nifty earnings for FY24/25/26 is INR957/1,040/1,240.”

Market Volatility Ahead

With these earnings challenges in mind, the report urged investors to brace themselves for heightened market volatility in 2025. The current environment underscores the importance of adopting defensive investment strategies to navigate the uncertain terrain.

Portfolio Strategy: Defensive Tilt

Nuvama Research revealed a defensive positioning in its portfolio, favoring resilient sectors such as private banks, insurance, telecom, pharmaceuticals, consumer goods, cement, and chemicals. Meanwhile, it has adopted an underweight stance in industrials, metals, power, public sector banks, and non-banking financial companies (NBFCs).

This sectoral strategy reflects a cautious approach amid slowing earnings and macroeconomic challenges. The report highlighted the need for careful planning to mitigate risks and safeguard investments during this period of uncertainty.

Conclusion

As the third quarter of FY25 unfolds, the slowdown in Nifty earnings growth is a clear signal for investors to reassess their strategies. The demand-driven deceleration, coupled with high valuations and liquidity pressures, paints a complex picture for the market in the year ahead. Adopting a balanced and defensive investment approach will likely be critical in navigating the volatility that looms on the horizon.

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The Nifty 50 index opened at 23,746.65 points, registering a slight gain of 38.75 points or 0.16 percent. Similarly, the BSE Sensex started the day on a positive note at 78,319.56 points, climbing by 120.45 points or 0.15 percent. However, these early gains quickly faded as the markets faced consistent selling by Foreign Portfolio Investors (FPIs).

Experts have noted that the near-term outlook remains challenging for the Indian markets, with corporate earnings and the upcoming Union Budget expected to play a crucial role in shaping market sentiment.

Ajay Bagga, a noted Banking and Market Expert, highlighted the challenges plaguing the markets. “Indian markets are grappling with lowered GDP growth estimates of 6.4 percent for FY2025, compared to 8.2 percent in FY2024. Additionally, major financial institutions have provided moderate operating updates for the October-December quarter, contributing to ongoing FPI selling in key sectors like financials. The overall mood remains cautious, and a turnaround will largely depend on individual corporate earnings and the Union Budget,” Bagga explained.

Sector-wise, selling pressure dominated, with only Nifty Pharma and Nifty Oil and Gas showing gains during the opening session.

Among the Nifty 50 stocks, 13 opened with gains, while 37 saw declines, and one stock remained unchanged at the time of this report. Top gainers included Dr. Reddy, ONGC, Reliance, Cipla, and Maruti. Conversely, the biggest losers were Trent, Shri Ram Finance, Adani Ports, BEL, and Tech Mahindra.

Commenting on the market trends, Akshay Chinchalkar, Head of Research at Axis Securities, noted the technical patterns observed in the previous session. “The Nifty’s rally yesterday traced a bullish harami pattern, but the long upper shadow indicates ongoing nervousness. Bulls need to push the market above the previous high of 23,795 to validate this formation. Moreover, the resistance area created by the falling 100-day and rising 200-day averages, between 23,915 and 24,100, poses a challenge. This resistance coincides with the high concentration of the 24,000-call strike for this week’s expiration,” Chinchalkar explained.

On the global front, Asian markets exhibited a mixed trend during Wednesday’s opening. South Korea’s KOSPI index surged by more than 1.2 percent, and Singapore’s Straits Times rose by 0.5 percent. However, other markets remained under pressure, with Hong Kong’s Hang Seng index down 1.3 percent, China’s Shanghai Composite dropping by over 1 percent, and Japan’s Nikkei 225 falling 0.35 percent.

While the domestic markets struggle with selling pressure and cautious sentiment, all eyes remain on the upcoming corporate earnings season and the Union Budget to provide a much-needed boost.

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As part of its outlook, Morgan Stanley has assigned an “overweight” rating to 10 companies in what it calls its “focus list.” The selected companies include industry leaders such as Reliance Industries, Hindustan Aeronautics (HAL), ICICI Bank, Maruti Suzuki, SBI Life Insurance, and Infosys, among others. The sectors highlighted for potential growth are financials, consumer discretionary, industrials, and technology.

In financial jargon, an “overweight” rating suggests that an analyst or advisory firm expects a company’s stock price to outperform in the near future. Morgan Stanley’s focus on India’s economic stability and growth potential comes at a time when the country is seeing robust financial performance and earnings growth. The report projects earnings growth of approximately 18-20% annually over the next 4-5 years, buoyed by rising discretionary consumption and a strengthening macroeconomic environment.

Morgan Stanley identified several key drivers of India’s economic expansion. Notably, the Maharashtra elections have helped alleviate concerns about the central government’s ability to push through reforms. Other growth catalysts include increased infrastructure spending, restructuring of GST rates, tax reforms, expanded free trade agreements, and a stronger focus on energy transition.

Looking ahead to 2025, Morgan Stanley forecasts an 18% upside for the BSE Sensex in its base case scenario. The report underscores India’s continued macro stability, fiscal consolidation, rising private investment, and favorable global conditions, including stable oil prices and positive U.S. economic growth.

In conclusion, Morgan Stanley’s optimistic outlook positions India as an attractive market for investors, supported by a favorable economic environment and a strong list of companies poised for growth.

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In an unprecedented feat, NSE successfully hosted 268 IPOs, including 90 on the mainboard and 178 on the SME platform, raising a total of ₹1.67 lakh crore. This marks a significant milestone as the highest number of IPOs facilitated in a single calendar year, reflecting the growing confidence of global and domestic investors in India’s capital markets.

On the global stage, 2024 saw a total of 1,145 IPOs, slightly lower than the 1,271 recorded in 2023. Yet, India emerged as a leader, with NSE facilitating 268 IPOs, including Hyundai Motor India Ltd.’s landmark IPO worth USD 3.3 billion—the largest IPO in India’s history and the second-largest globally for the year.

For the SME segment, companies collectively raised ₹7,349 crore (USD 0.86 billion), showcasing the platform’s robust support for small and medium enterprises aiming to scale their operations.

Sriram Krishnan, Chief Business Development Officer (CBDO) of NSE, highlighted the significance of this achievement, stating, “The record number of IPOs during this calendar year highlights the resilience and potential of the Indian economy. Companies across various sectors are recognizing the value of public markets to support their growth strategies.”

In a comparison with other leading Asian stock exchanges, such as Japan Exchange Group, Hong Kong Stock Exchange, and Shanghai Stock Exchange, Krishnan noted that NSE facilitated more IPOs than all of them combined, underlining India’s dominant position in the region.

Looking ahead to 2025, NSE has reaffirmed its commitment to strengthening its platform to enable higher capital raising and support for businesses. India’s thriving stock market is attracting an increasing number of companies eager to list their shares, many of which have already reaped significant returns post-listing.

For the uninitiated, an Initial Public Offering (IPO) is a process through which companies sell their shares to the public to raise equity capital from investors, often marking a pivotal step in their growth journey.

With such impressive achievements in 2024, NSE has cemented its role as a cornerstone of India’s economic growth and a key driver of global capital market activity.

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Despite this rough start, December 2024 had shown a more positive trend, with FPIs making net investments of Rs 15,446 crore in Indian equities. However, the year-end numbers also hinted at a slowdown in momentum, as the annual net buying value plummeted to just Rs 427 crore, reflecting a stark 99% decline compared to 2023.

Key Drivers Behind FPI Pullout

The sharp fall in FPI inflows is attributed to several global and domestic factors. On the global front, the robust performance of the US economy continued to dominate investment trends. Strong stock market gains, higher interest rates, and the appeal of US bonds and money markets diverted investor attention away from emerging economies, including India.

Domestically, the Indian equity markets faced challenges such as elevated valuations, a high market cap-to-GDP ratio, and slowing GDP growth. Weaker industrial output and reduced corporate earnings further dampened investor sentiment.

Volatility Ahead for 2025

The significant early sell-off by FPIs highlights their cautious approach as they navigate global economic uncertainties alongside domestic concerns. This trend suggests that Indian equity markets could face increased volatility in the coming months, with FPIs likely to reassess their strategies based on evolving market conditions.

The Road Ahead for India

The decline in FPI inflows serves as a wake-up call for policymakers and market stakeholders. To sustain foreign investment and drive economic growth, India must address both global and domestic challenges. Efforts to enhance industrial output, strengthen corporate earnings, and make the market more appealing to international investors will be critical to reversing this trend.

While the new year may have started on a turbulent note, the Indian equity markets have a proven track record of resilience. How they navigate this period of uncertainty will define their trajectory for the rest of 2025.

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Sectoral indices showed mixed trends, with banking, IT, pharma, healthcare, and financial services emerging as the day’s top losers, according to data from the NSE.

Ajit Mishra, SVP of Research at Religare Broking Ltd, commented, “The markets paused after a three-day rally, shedding over half a percent. Sectoral trends were mixed, with energy and FMCG sectors ending in the green, while IT and pharma sectors closed in the red. Broader indices reflected the benchmark’s movement, registering a nearly half a percent decline.”

He further explained that the current pullback is a natural pause following recent gains, which may continue until the Nifty surpasses the next resistance level at 24,250 points.

Religare Broking advises investors to focus on stock-specific opportunities aligned with sectoral trends. “In the near term, FMCG, auto, and energy sectors are likely to outperform, and positions should be adjusted accordingly,” the firm suggested.

The Indian stock market started 2025 on a strong note, with the Sensex and Nifty posting solid gains on January 1 and 2. Notably, the benchmarks recorded their best session in six weeks on Thursday.

Krishna Appala, Senior Research Analyst at Capitalmind Research, highlighted the optimism, saying, “The year has begun positively, with the Nifty gaining 1.25% and the Nifty 500 advancing 1.4% in the first week. This broad-based rally sets a stable foundation for 2025. While market valuations appear stretched, especially in mid- and small-cap segments, history suggests such conditions can persist longer than expected. Investors should prioritize businesses with steady earnings growth and adaptability to changing trends.”

Looking ahead, the upcoming Q3 results season is expected to play a crucial role in determining market direction. Following this, attention will likely shift toward the Union Budget and policy decisions under the Trump 2.0 administration.

Currently, the Sensex is nearly 6,000 points shy of its all-time high of 85,978.

In terms of annual performance, the Sensex and Nifty delivered gains of 9-10% in 2024, following a stellar 16-17% rise in 2023. However, 2022 saw only modest gains of 3% amid challenges like weak GDP growth, foreign fund outflows, rising food prices, and sluggish consumption, which continued to weigh on investor sentiment through 2024.

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Market experts have indicated that the upcoming Q3 earnings season will play a crucial role in determining the future direction of the markets. Attention is expected to shift to expectations surrounding the Union Budget and the policy decisions of the Trump 2.0 administration in the coming months. Ajay Bagga, a veteran banking and market expert, highlighted that the inauguration of “Trump 2.0” will be the most significant global event of January and possibly of the year.

In a boost to market sentiment, Gaurang Shah, Head Investment Strategist at financial services firm Geojit, pointed to strong advance tax collections, a stable GST collection performance, and a positive outlook for some sectors in Q3. However, he also anticipated some profit-taking as the rally progresses.

India’s Goods and Services Tax (GST) collections in December reached Rs 1.76 lakh crore, reflecting a year-on-year growth of 7.3%. This pushed the total GST collection for the fiscal year 2024-25 to Rs 16.33 lakh crore, marking a 9.1% increase from the same period last year, when the figure stood at Rs 14.97 lakh crore.

The Indian stock market is experiencing its highest gains in two weeks, with significant contributions from the auto, tech, and financial services sectors, as noted by Kedia Advisory. Despite this, investor caution remains, especially with potential new tariff policies that may arise under Donald Trump’s presidency.

However, the Sensex still remains nearly 6,000 points below its all-time high of 85,978 points, and while 2024 saw both the Sensex and Nifty gaining 9-10%, it was a more modest year in comparison to the 16-17% rise in 2023. The market’s performance in 2022 was comparatively weaker, with only a 3% gain in both indices.

Challenges such as weak GDP growth, foreign fund outflows, rising food prices, and sluggish consumption dampened investor sentiment in 2024. Additionally, the Indian rupee is hovering near its all-time low, impacted by expectations of fewer rate cuts from the U.S. Federal Reserve, a widening trade deficit, and subdued economic growth seen in the first half of 2024-25.

As the market continues to ride this positive wave, all eyes are on the forthcoming corporate earnings and the unfolding global political landscape, which will likely influence the Indian stock market’s next moves.

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The report highlights a significant rise in retail participation, with the total number of unique investors surpassing notable milestones in 2024. The nine-crore mark was crossed in February, followed by the 10-crore mark in August, eventually reaching 10.85 crore in November. Notably, the number of investor accounts used for trading (UCCs) stands at nearly 21 crore.

Last month, NSE announced that the total registered investors had exceeded the 10-crore mark in August, reaching 10.5 crore by October. According to the exchange, “Total registered investors stood at 10.5 crore in October 2024 after surpassing the 10-crore milestone in August.”

Maharashtra Leads, Followed by Uttar Pradesh and Gujarat

Maharashtra remains at the forefront with the highest number of registered investors, totaling approximately 1.8 crore. However, its share of the total investor base has decreased from around 20 per cent in FY15 to 16.5 per cent in November 2024. Uttar Pradesh retains its position as the second-largest contributor, witnessing a sharp rise in its investor base. The state surpassed the one-crore mark in April and reached 1.2 crore investors by November, accounting for 11.3 per cent of the total, a substantial increase from 6.9 per cent in FY15.

Gujarat follows closely with 94.9 lakh investors. West Bengal and Rajasthan round out the top five with 62.5 lakh and 61.4 lakh investors, respectively. Collectively, these five states contribute 48.3 per cent to the total registered investor base.

Growing Participation Beyond Top States

An interesting trend identified in the report is the growing contribution from states beyond the top 10. These states now constitute 27 per cent of the total investor base, a notable increase from 23 per cent in FY20. States like Bihar and Assam have shown remarkable growth, reflecting an increasing interest in stock market participation from smaller regions.

Rising Awareness Across India

The consistent increase in investor participation, even amid market volatility, reflects a growing awareness and interest in the stock market across India, extending beyond the traditionally dominant states. This trend underscores a broader democratization of stock market investments, as smaller and less prominent regions actively engage in wealth creation opportunities.

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Monday’s session had already seen a modest recovery, which analysts attributed to typical market behavior following oversold positions in key index stocks. Ajit Mishra, SVP of Research at Religare Broking, emphasized the importance of adopting a cautious approach, saying, “Participants are advised to maintain a cautious stance with a negative bias on the index until clear signs of a rebound emerge. However, individual stocks continue to present opportunities on both sides. We reiterate our preference for the pharma and healthcare sectors for long positions, while other sectors are likely to see mixed trading trends.”

Key Market Levels

Market experts have highlighted resistance levels at 23,850-23,870, with a bearish gap noted between 24,000 and 24,150. On the downside, support is observed at 23,600-23,500, with a potential further drop to 23,350 if these levels are breached.

Global Influences and Sectoral Focus

Global markets also provided a sense of optimism, with major US indices closing higher on Monday. Both the Dow Jones Industrial Average and Nasdaq Composite extended their winning streak to three sessions, bolstered by strong performances from top-tier technology companies, referred to as the “Magnificent Seven.” These gains came amid reduced trading volumes due to the holiday season.

Asian markets mirrored this subdued activity, trading within narrow ranges as the region followed the upward momentum set by Wall Street.

Other Market Indicators

Gold prices remained steady as the holiday season approached, while the dollar strengthened on expectations of prolonged high-interest rates in the US. In domestic trading, Foreign Portfolio Investors (FPIs) recorded net sales of ₹168 crore, whereas Domestic Institutional Investors (DIIs) made net purchases amounting to ₹2,228 crore. Meanwhile, Foreign Institutional Investors (FII) increased their net short position to ₹1.56 lakh crore.

As the market navigates through global and domestic cues, cautious optimism continues to dominate trading sentiments. Sectoral opportunities, particularly in pharma and healthcare, are likely to be the focus for long-term investors, even as broader market indices face resistance.

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Ventive Hospitality IPO Subscription Status

As of the first day of bidding, the IPO had already received a 71% subscription, which is considered a good response, especially given the recent market volatility. By 10:15 AM on day 2 of the bidding, the public issue was subscribed 0.75 times overall. Breaking it down by categories:

• The retail portion of the issue was subscribed 0.76 times.
• The Non-Institutional Investors (NII) segment had been subscribed 0.14 times.
• The Qualified Institutional Buyers (QIB) portion was subscribed 1.05 times.

Grey Market Premium (GMP) of Ventive Hospitality IPO

One of the most talked-about aspects of this IPO is its Grey Market Premium (GMP). Despite the market downturn, the IPO shares are trading at a ₹28 premium in the grey market. This suggests that investors in the grey market are expecting a listing gain of approximately 4% on their investment. The bullish trend in the grey market despite the broader market slump is seen as a positive indicator of investor sentiment towards the IPO.

Ventive Hospitality IPO GMP Today

As per the latest updates, the Ventive Hospitality IPO GMP stands at ₹28, which is an encouraging sign for those looking at listing gains. This premium indicates that the grey market anticipates the stock to list at a price higher than the issue price, thus providing early investors with a potential profit. The optimism in the grey market reflects confidence in the company’s prospects, particularly its growth strategy and industry outlook.

Company Overview and Financials

Ventive Hospitality Limited has a market capitalization of approximately ₹15,000 crore. The company reported an 8% year-on-year revenue increase for FY24, though its Profit After Tax (PAT) saw a significant decline of over 525%. While the financial performance shows mixed results, the company is focusing on expansion and debt reduction to improve its outlook.

IPO Review and Analyst Opinions

According to INDSEC Securities, the company’s strategy for growth and debt reduction has made it an attractive option for investors. Ventive Hospitality aims to expand its room inventory from 2,036 keys in the first half of FY25 to 2,403 keys by FY28. This expansion will diversify the company’s revenue streams, reducing its reliance on its current assets. Proceeds from this expansion are earmarked for debt reduction, which currently constitutes 27% of its sales in H1FY25. Reducing debt could improve the company’s financial position, and it is expected to support the company’s path toward profitability.

INDSEC recommends a “Subscribe” tag due to the strong growth prospects in the hospitality industry and the company’s focus on debt reduction, which could aid in turning around its financial performance. The company is also benefiting from favorable industry dynamics, including increasing urbanization, higher consumer spending, and the growing preference for chain-affiliated hotels among travelers.

However, Swastika Investmart has assigned an “Avoid” rating to the IPO, citing concerns over the company’s financial risk due to its increasing debt burden. The company’s occupancy rate of 59.5% (on a proforma basis) is also lower than the industry average of 62%, posing a potential risk to its financial performance. Swastika recommends that investors consider other options in the primary market and avoid investing in the Ventive Hospitality IPO.

Conclusion

The Ventive Hospitality IPO has sparked interest due to its growth plans, including expansion and debt reduction strategies. The grey market premium, which suggests potential listing gains, adds to its appeal. However, investors need to carefully weigh the risks, including the company’s financial health and occupancy rate, before making an investment decision.

As always, investors should consult certified experts and perform due diligence before making any decisions. Each investor’s risk tolerance, financial goals, and portfolio diversification strategy should guide their choice in this IPO.

Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Folkstimes. We advise investors to consult certified experts before making any investment decisions.

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