Without strong SIP inflows, markets could have fallen 40-50%: Vikas Satija

Vikas Satija, MD & CEO, Shriram Wealth, said that this kind of FII selling in previous cycles of market downturn could have resulted in a 40-50 per cent drawdown.

The strong participation by the retail investors has provided resilience to the Indian stock market and capped downside in the face of massive selloff by foreign portfolio investors (FIIs), said Vikas Satija, MD & CEO, Shriram Wealth, in a conversation with Business Standard's Pravin Palande at the Business Standard BFSI Insight Summit 2026 in Mumbai on Monday. 

 

He added that this kind of FII selling in previous cycles of market downturn could have resulted in a 40-50 per cent drawdown.  

 

"This time, there has been enough resilience in the Indian markets, thanks to the substantial SIP inflows and the continued support from domestic institutional investors, even though FIIs have been pulling out. The amount of money we have lost through FIIs in previous cycles would have pushed the market down by 40 per cent to 50 per cent by now if we had experienced the same level of outflows under earlier conditions," said Satija.

 

 

So far this year, the FII selling has hit a record ₹3.08 trillion, pressuring the benchmark indices. SIP inflows, on the other hand, stand at ₹2.51 trillion in the first nine months of 2026, according to data available on AMFI, highlighting the retail investors' faith in Indian equities.

 

According to Shriram Wealth's CEO, investors are not panicking and are looking for opportunities. "What gives us confidence is that even though Indian markets might not have delivered on the equity side over the last two years, you still have decent investors sitting on the fence and wanting to invest. There is no panic. I don’t meet any investors, whether in the HNI or ultra-HNI segments, who are panicked about what will happen tomorrow. Everybody is looking at various opportunities and trying to rebalance portfolios based on how the markets are behaving," he said.

 

Furthermore, he remains confident in India's long-term growth story. "With GDP growth at 6.5 per cent to 7 per cent and inflation at 3.5 per cent to 4 per cent, India still offers the potential for double-digit returns. India’s long-term story remains very much intact. There is no need to worry about it," he added.

 

Indian benchmark index, Sensex, is down 14 per cent so far this year. However, Satija said, "This movie has played out in the 1990s and the 2000s, and is nothing new; only the cycles have become shorter and much quicker".

 

Long-term asset allocation key

The real driver of portfolio returns is long-term asset allocation, according to Satija.

 

"It is a scientifically proven fact that 95 per cent of a portfolio is driven by asset allocation. The underlying choice between Fund A and Fund B would really not matter as much. I think it is about getting the asset allocation right," he said in response to an audience member's question. He added that if you look at how markets have behaved over a long period, equities will always deliver returns. But the proportion and the timing of asset allocation are very important. 

 

He also advised investors to avoid getting jittery about short-term headlines as they don't have a bearing on the returns in a longer scheme.

 

I keep telling clients not to get so jittery if they see some movements here and there, he said, adding that if there is a structural movement, one needs to look at it, but if it’s a momentary movement because of news that came out last night, don’t get so worried about it. "I think long-term investors will still have a better bet by staying in the markets," he noted.

 

"Look at the 1990s: you had the Asian market crisis. In 2000, you had Y2K. In 2008, you had the Lehman crisis. In 2020, you had COVID in between. And in the last two years, Indian markets have not done so well. The US might have done better. You had situations where Korea did better because the AI play was there. I think these are cycles in various markets at various points in time. Long-term investment still remains intact," he said.

 

Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.