Pankaj Tibrewal, founder and CIO of IKIGAI Asset Manager, said Indian equities have split into two separate markets trading under one index — and warns that investors chasing growth stocks at any price may have to pay for it later. Tibrewal believes the market has moved into a phase where valuation discipline, not momentum, should guide portfolio decisions over the next few years."It's time for some kind of introspection now...
people are ignoring the basic hygiene again, which is sound balance sheet and cash flow conversions. People are chasing growth at any cost, which to me always is a risky path," Tibrewal said. Tibrewal expects a rerating in beaten-down stocks if earnings growth returns, pointing to sectors such as textiles and chemicals that stand to benefit from currency depreciation and export competitiveness over the coming years.
He also flagged rising risk in the IPO market, where he said the quality of new listings has declined even as demand stays high. IKIGAI Asset Manager managed funds worth ₹102.64 crore as of August 31, 2026. Two markets, one indexTibrewal said growth stocks with visible momentum are being bid up, while companies with slower growth but comfortable valuations are being ignored.
He said this split is showing up across market capitalisations and sectors, and that many strong businesses have delivered close to zero returns over the past four to five years despite intact franchises. He said predictable growth returning to these names could trigger a sharp bounce back.
Portfolio positioningIKIGAI has organised its portfolio into four themes. The first is domestic demand, covering healthcare, financials and premium consumption, where the fund has increased exposure to private sector financials. The second is order-book-driven sectors like defence, power and capital goods, where Tibrewal said valuations have run ahead of fundamentals, prompting the fund to book some profits.
The third is export-linked businesses gaining from rupee depreciation against the yuan, including textiles, garmenting, chemicals and pharma contract manufacturing. The fourth is financialisation, covering wealth managers, asset managers and exchanges.
IPO cautionTibrewal said many recent IPO candidates show strong revenue growth but weaker cash conversion, and pointed to governance gaps such as independent directors who have no experience on other boards. "The quality of the names over the last few months is coming down," he said.
He compared the current mood in markets to a scene from the film Deewaar, where the growth camp claims valuation, narrative and growth on its side, and the value camp claims wealth creation. "Mere paas valuation hai, mere paas narrative hai, mere paas growth hai...
mere paas wealth creation hai," Tibrewal said, arguing that long-term wealth creation comes from avoiding mistakes rather than chasing short-term returns. Tibrewal said his approach has held through multiple market cycles over the past two and a half decades, and that companies without strong cash flow and governance records deserve caution regardless of near-term price moves.
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