“First of all, let me tell you that this is not the first time we are facing a crisis. Crises were always different — 1998, 2000, 2008, 2020 — every time this was a different thing, and this is not different,” said DP Singh, Joint CEO, SBI MF, reflecting on the current environment in an interview with ET Now.
He acknowledged that the ongoing geopolitical situation is beyond investors’ control, but highlighted the relative strength shown by Indian markets despite significant foreign institutional investor (FII) outflows.
“We are facing a geopolitical situation where we do not have much control, and the only thing we can say is the market has corrected. The Indian market has shown much more resilience than before, given the kind of FII outflows which have happened in India. Had it been normal circumstances, things would have been much worse than what they are today,” he noted.
V-Shaped Recovery Expected, But Timing Uncertain
Drawing parallels with past crises, Singh expressed optimism about the eventual recovery, even though the timeline remains unclear.
“But we have always shown this also — that after every crisis the recovery is much, much faster, and it is a V-shaped recovery, and we are expecting the same today. Now, it is very uncertain whether this war will continue for one more week or one more month, but the hope is that sooner rather than later it will end,” he said.
He added that improving valuations are beginning to attract investors back into the market, supported by strong domestic inflows.
“We are seeing in the market that there is a value bias, and people are looking at great values after this correction. Our local inflows are very robust. The SIP book size of the industry continues to remain around ₹29,000–30,000 crore, which is good enough to get money,” Singh explained.
Retail Investors Stay Calm, SIP Flows Remain Strong
Despite heightened uncertainty, retail investors have largely remained steady in their approach. Systematic Investment Plans (SIPs), often considered a barometer of retail confidence, have held firm.
“There is hardly any decline in SIPs. Whatever number of SIPs are getting closed, an equivalent or higher number is getting registered. So overall, if we talk about retail participation through the SIP route, there is hardly any impact,” Singh said.
However, he pointed out a moderation in lump sum investments.
“Yes, the lump sum money which we used to get from investors in the ₹5 lakh, ₹10 lakh, ₹20 lakh, ₹50 lakh category — the size has come down. So thereby overall volumes have come down a bit,” he added.
Importantly, there has been no widespread panic selling.
“One thing is very clear in the minds of people — at this point of time, it is not the right time to convert notional losses into actual losses,” Singh emphasised.
Shift Towards Hybrid Funds Gains Momentum
A notable trend emerging in recent months is the shift from pure equity funds to hybrid strategies, which offer a blend of equity, debt, and sometimes gold.
“Yes, we are seeing a shift from equity funds to hybrid funds. Hybrid funds like multi-asset allocation funds and balanced advantage funds are seeing good traction,” Singh observed.
While equity inflows have moderated slightly, hybrid categories are witnessing net positive flows, indicating a cautious yet constructive investor stance.
Opportunities Across Sectors, But Strategy Matters
On the question of sectoral opportunities, Singh avoided pinpointing specific industries, instead stressing the importance of fund management quality and flexibility.
“There are good value stocks at this point of time across sectors. I agree that IT is no longer seen as a defensive sector, but fund managers are taking very proactive calls. They are dynamically managing portfolios and shifting to where they can make relatively better money,” he said.
He underscored that investors should focus on the pedigree of fund houses and the conviction of fund managers rather than chasing sectors.
Small & Midcaps Hold Ground Despite Volatility
Interestingly, even the more volatile small- and mid-cap segments have not seen a meaningful exodus of retail money.
“Not really. The SIP book for smallcap and midcap is very strong, and we are not seeing any reductions. Whatever redemptions are there are being taken care of by SIP inflows,” Singh said.
He added that fresh SIP registrations in these categories suggest optimism about a sharper recovery in smaller companies.
Economic Impact Visible, But India Story Intact
On the macroeconomic front, Singh acknowledged early signs of stress, particularly in manufacturing, while highlighting the resilience of the services sector.
“There is going to be an impact, and we are already seeing it in our numbers — foreign exchange reserves, manufacturing sector growth. March data, especially, has shown a decline,” he said.
However, he pointed out that services continue to provide a cushion.
“One super-duper performance is coming from the services sector. At this point of time, it is making up for the manufacturing sector,” he added.
Looking ahead, the extent of economic impact will depend largely on how long the geopolitical tensions persist.
“If it continues for a longer period, it will definitely have a larger impact. But our internal growth story and India’s growth story in general are very, very strong,” Singh maintained.
Markets Likely to Remain Range-Bound
While long-term optimism remains intact, Singh cautioned against expecting a sharp rally in the near term.
“Markets are going to behave sideways. We are not seeing any major bull run kind of situation immediately. We will have to wait and watch. Nobody can see the future. As of now, things are so blurred that nobody can predict anything at this point of time,” he concluded.
The Bottom Line
In an environment dominated by uncertainty, the message for investors is not to time the market, but to stay invested with discipline. With strong domestic flows, improving valuations, and a resilient economic backbone, India’s market story may be on pause—but it is far from broken.